Back in 1958, the average lifespan for a company stood at 61 years. But today, things couldn’t be more different. In the current landscape of rapid technological innovation, the average lifespan has shrunk to fewer than 18 years. The managing director of McKinsey & Co., Dominic Barton, attributes this shift to the power of digital transformation. In the second article linked above, he ascertains that “technology has led to fundamental business change for everyone,” going on to cite urbanization, big data and significant improvements in computing power as contributing factors.
Enterprises globally have entered into a race to transform how they operate through the digitalization of every business unit in the hopes of remaining competitive, but there are four common mistakes that are tripping up many digital transformation programs:
1. Not Knowing Where To Start
My company recently commissioned research of over 1,000 C-suite executives and over 1,000 business analysts. We found that businesses lack a clear understanding when it comes to their transformation efforts, with 45% of people in C-suite positions concluding that, when it comes to developing a digital transformation strategy, they are unclear on where to start.
2. Not Setting Clear Goals To Measure Success
Perhaps more concerning is the lack of clear results and return-on-investment from implementing strategies. Our research uncovered that 44% of executives found their business transformation initiatives to be a waste of time. Even still, over the last 12 months, 34% of organizations have spent more than $500,000 on these strategies. Organizations put themselves in a position of potentially running high costs with limited return, resulting in projects that are likely to be dismissed before they have ever taken off.
3. Not Understanding The Present Before Leaping To What Can Be
In order to have a proper digital transformation strategy, organizations need to first understand what to change so they can optimize their initiatives. Enterprises need to set goals for business outcomes instead of simply prioritizing technical results. C-suite executives should first understand business drivers and internal processes before delving into a transformation program. In fact, 82% of the executives we surveyed don’t review internal processes within their organization, which would ultimately help them with goal setting and understanding appropriate key performance indicators (KPIs). This might stem from the fact that they don’t know how to gain better visibility, since 65% of leadership stated that, if they had a better understanding of internal processes, they would be more confident in their strategy.