Three years after businesses responded to the pandemic by accelerating their digital transformation timetables, most are far from realizing the full benefits of these initiatives, according to the results of CTG’s third annual digital transformation decision-maker report.
The findings highlight a new challenge that comes with the acceleration of digital transformation—the need to align organizations’ digital maturity with their digital strategy. Digital maturity is all about ensuring employees and work processes are set up to take full advantage of new digital tools.
Too many organizations continue to adopt new digital technologies hoping for immediate impact but come up short. With more than half of digital transformations failing to meet their goals, our research pinpoints the lack of digital maturity as one of the most critical—and growing—factors.
Enterprises undertaking digital transformation too often underestimate what it takes to train employees and get them to use the new technology, which can then become more burdensome and expensive to maintain and support than the value it delivers.
For digital transformation to truly deliver the benefits these enterprises need, it must be aligned with the knowledge, skills, operations, and culture that can exploit new technology and more digitalized ways of working.
Our survey examines both sides of this digital transformation conundrum—the continued need to accelerate transformation, and the new consequences that acceleration is creating.
On the one hand, digital acceleration remains a priority with nearly two-thirds (64%) of respondents reporting their organizations have sped up digital transformation initiatives over the last three years.
When it comes to accelerating digital adoption, the results are clear. Digital leaders are moving fast, taking risks, and striving to leverage data in new ways, with extremely high response rates for these priorities:
- Early technology adopters compared to their competitors (90%)
- Culture of innovation and risk-taking (77%)
- Using data to inform decision making (80%)
On the other hand, while many respondents believe they are ahead of the curve in driving digital transformation, our findings also reveal a growing gap between digital adoption and the digital maturity that is needed to generate key business results.
In fact, the research found a staggering 85% of respondents experienced at least one challenge related to digital transformation that led to compromised or poor performance, including lost revenue
- Among those affected by compromised or poor performance, 60% reported revenue losses of $250K or more in the last year as a direct result
- Some reported more dire financial consequences, with 1 in 7 respondents suffering losses of $1 million or more
It wasn’t all bad news. The report did reveal encouraging signs for the future with more organizational awareness of these critical, non-technical imperatives for digital success—leadership, skills, talent development, and the need for improving communication between tech and non-tech workers.
But that shift needs to be translated into a commitment to act sooner, rather than later. When it comes to addressing these imperatives, much will depend on improving digital culture, which was viewed as an increasingly important component of elevating digital maturity and ultimately achieving digital transformation success.
Our next blog post in this series will highlight key findings related to digital culture and what aspects digital leaders are prioritizing this year.
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