Digital transformation is changing the shape of every industry sector, but many companies struggle when it comes to implementation.
Recent research found that 90% of digital transformation projects have either fallen below planning expectations, delivered only minor improvements or altogether failed.
Couchbase surveyed 450 CIOs, CTOs and digital leaders at companies with more than 1,000 employees in the US, UK, France and Germany.
It found that problems usually occur due to a lack of business agility to cope with the scope, scale and requirements of digital projects shifting during their implementation.
Even when projects are successfully completed, they can be limited by existing processes elsewhere within the business that don't possess the same flexibility.
So, what makes the difference between companies that have successfully embraced the challenge, so-called ‘evolved enterprises’ and those that are lost and don’t really know where to begin?
According to global brand and marketing consultancy Prophet, successful companies are those that think about digital differently.
Chan Suh, chief digital officer, Prophet, said: “Regardless of what others have said, digital transformation isn’t about implementing digital platforms and cutting-edge technology – it’s about achieving growth by being committed to three key areas.”
These areas cover developing transformational marketing strategies, creating seamless customer experiences and building smarter, faster, more flexible organisations.
Details of the strategies are covered in Prophet’s whitepaper, called The Evolved Enterprise: Three Paths to Unlocking Growth Through Digital Transformation.
It says: “To fully understand why [companies] are winning requires looking past the obvious distinctions of technology. Yes, these leaders are digital natives. But they are also evolved enterprises; they achieve uncommon growth not just through cutting-edge technology, but because they are committed to three fundamentals of our digital age that any company can master.
“Evolved companies aren’t customer-centric - they’re customer experience-centric. No matter who their customers are, these companies understand they are in the business of experience and they design their business models explicitly to compete on experience innovation. Amazon may have set the pace, but in every industry – from Lemonade in insurance, to Coupa in procurement software, to Veeva in pharmaceutical salesforce automation – customers are responding.
“They’re building brands. Because digital businesses are interactive by definition, customers must know and have positive associations with your brand, which requires a radically reimagined marketing machine. Whether through Yelp reviews, Instagram followers or the simplest searches, if customers can’t remember your name, you don’t exist in the digital world.
“They untether the talent of their people. Empowered, autonomous teams at the edges of the organisation help the organisation operate at the speed of digital. They are fast, flexible and responsive. When grounded in a shared purpose, this freedom unleashes innovation, engages employees and attracts critical talent.”
A key factor in success when developing digital projects is “purposeful iteration”, the company says.
Companies should create a vision and map out how digital transformation can deliver real business value, then tackle each challenge one at a time.
The whitepaper adds: “Of course, we’re not suggesting you ignore the others, but focus on just one of these three areas – customer experience, marketing or organisational agility - to maximise impact and build momentum.
“Visible successes help win more support from customers and employees. Once a company establishes a clear vision, it usually becomes obvious which of the three areas – customer experience, marketing or organisational agility – present the biggest obstacles to growth. And that’s where to begin.”
Companies need to ensure they evolve based on a constant focus on bottom-line outcomes and a consistent customer experience across a wide variety of touchpoints.
The whitepaper says: “Consumers have high expectations of consistency across the board, no matter how hard it is to do. That requires teams of experts from across the organisation, working together.
“Even modern tools, like omnichannel strategies, are causing experience stumbles. Everyone recognises its importance yet connecting the dots between channels - and even defining what a channel is - remains a challenge.
“Digital experiences often ignore that customers live in the real world, while offline experiences often forget most customers have a mobile device in their pocket.”
To provide consistent, engaging experiences will also change company structures, Prophet claims, with product managers moving to the centre of experience, technology and business strategy.
It adds: “Evolved enterprises are empowering product managers with the autonomy and accountability to marshal multidisciplinary skills in service of a common objective. It’s a major departure from the traditional model, where product management sits in its distinct organisational unit.”
It adds that companies have a lot of work to do if they want to break into the “Business of Experience”, although success is within reach according to Brian Solis, principal analyst at Altimeter, Prophet’s digital research group, who said: “The biggest challenge is simply seeing and doing things differently.”
The report says: “While companies aren’t wrong to believe technology will make them more competitive, the real need is for organisational transformation. Many are still built on the ‘inside out’ model of the Industrial Age, organising around processes and functions that might be important to the company’s operations, but don’t really mean anything to customers.
“Delivering on the promise of the digital revolution requires thinking more ‘outside in’. Companies need to be built on what customers need, want and care about. Inside-out companies were built in the era of smokestacks, when information was a scarce resource and there was plenty of time to make decisions. Information flowed up the chain to someone who made a decision, and those decisions then flowed back down for implementation.”
By contrast, today, time is scarce, and information is widely available, yet core business processes in many organisations are still trapped in the past, it argues.
Annual strategic planning processes are too infrequent. Marketing needs to run in real-time and technology departments need to deliver cutting-edge solutions immediately, not in the next release cycle.
Prophet adds: “Running a business in the digital age is different in two important ways: the pace of change in the market requires faster decisions, and there’s a vast amount of information available to make them. But the tsunami of information to make complex decisions can be as crippling as it is helpful. Not only does it overwhelm human brains, it can paralyse old-school organisations.
“Companies built for the digital age are designed for speed and agility; they can sense the market, make swift decisions and get solutions to market quickly and iteratively.”