The digital transformation conversations had most CXOs, especially technology and data experts, on the edge of the seat until about three years ago. Last year the novelty had run its course, and while digital transformation was not making head news anymore, there is a new set of news associated with it.
As we begin a New Year and new decade even, with retrospection of what didn’t work, it appears that the biggest challenge that CXOs will face this year is not of new technology but breakdowns due to the mistakes that were made during the exuberant adoption of digital transformation initiatives.
Gartner Inc.’s latest Emerging Risks Monitor Report forecasts a very worrisome 2020 that carries over mistakes that occurred because of unmindful digital transformation plans in 2019, to 2020 and beyond.
In this report, Gartner highlights the opinions of 144 senior executives across industries and geographies that they surveyed. The results beg a long and hard look at planning concepts and their business results. In the survey, “digitalization misconceptions” has been identified as the top emerging risks in the third quarter of 2019, pointed out by more than half executives. Unsatisfactory results or the inability to achieve desired efficiencies, named “Lagging digitalization” occupied the second position. Strategies based on assumptions that didn’t quite play out have occupied the third biggest challenges for CXOs in the last quarter of 2019. The interesting thing is that US china trade breakdown is featuring on the top 5 challenges that CXOs faced in this quarter. However, the fact that the top three risks are speaking of erroneous assumptions during a hectic rush to launch digital transformation strategies and adopt transformative technologies to support this journey, is a big concern for the next year as well. With less than, or no RoI, it may take enterprises some time to recover from the losses this challenge brought up.
Going a step further, there are even more worrisome situations that could come up, driven by last quarter’s fears. Gartner collated more related data form some top strategists and the shortfall of successful deployments seems to be coming up as a big concern. Among the issues identified are slow strategy execution and insufficient digital capabilities -top concern issues identified by 60% of respondents. In most of these cases, the journey impacted four business areas – business capabilities, profit models, value propositions and customer behavior.
As per the survey, only about a third of all strategists and executives are confident that there will be any improvement or ready solutions for the challenges that have been raised due to incomplete and wrongly executed, or even unsuccessful digital transformation. And even more, interestingly, a third of all strategists could say with certainty that these initiatives would help drive their business to be future-ready while a whopping 80% strategists had no clarity on how those changes would positively impact their organizations.
Clearly, the exercise of digital transformation has had its challenges, and now the questions that arise are going to dictate the way CXOs strategize in the coming year and beyond. While many of these challenges could be due to the enterprise’s own shortcomings, there may be some truth in the opinions that not all may be as rosy about digital transformation as first appeared. A long, hard relook is needed at the advantages it delivers, and a fair weighing should be done to see if the challenges and shortcomings offset these advantages.
Clearly, 2020 will be an exciting year for digital transformation strategists, even if not in a very progressive way. Introspection may lead to better strategies, or maybe a repair mode, which will surprise us yet!