For over a decade, Digital Transformation has been a buzzword for enterprise upgrade; it’s time to assess the results that were promised
Data suggests that 34% of companies have undergone some type of digital transformation (DT) and an additional 34% of companies will fully adopt digital transformation coming 12 months. While adoption rates are high, not all organizations are succeeding in their transformation efforts. According to an IDC report, 85% of enterprise decision-makers have a time frame of only two years to make a significant incursion into digital transformation to avoid falling behind their competitors or suffer financially. Measuring the efforts put in digital transformation has become crucial to compare them to the results.
Assessment and evaluation have both, cultural and technological components, but business objectives should drive all these. Since technology alone cannot affect a successful digital transformation; hence, only technology-related metrics are not enough.
Digital transformation can be measured as per its impact on three tangible segments:
IT modernization: This is the most prominent form of change to observe as every firm aims to build a more efficient and agile digital foundation or even the core.
Business transformation (BT): This is the less commonly considered segment as it can happen only when the company successfully shifts its business model, strategy, organization, or even culture.
Industry disruption: While this term is typically thought of as being led by start-ups and new business models, it is also an outcome of various political and economic disruptions.
These different approaches to measurement use of disparate success metrics. While a company can focus on parameters related to cloud migration (IT), others may measure success based on business objectives.
Experts suggest that assessment of digital transformation should be continuous. To keep pace, businesses must upgrade assessments from periodic to continuous processes. The strategies have to be according to the results that enterprises are looking to achieve. A correction that experts suggest to take on is aligning business strategies with digital transformation strategies. The metrics that a company decides for digital transformation should be traceable back to business goals. For example, quantifying the level of cloud migration.
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The organizational transformation includes leadership readiness and also the redesign of work. Enterprises have to measure their capabilities and practices against a digital-first organization. The companies on a digital transformation journey cannot lay out a rigid ten or even a five-year plan to be executed blindly. Experts suggest that Digital experiments must be conducted all the time with new technology and ideas, but the expectation that one piece of digital technology can be used to reimagine the business can be unrealistic.
Experts instead suggest viewing the operating foundation as a strategic advantage that includes data, access to data, the security, the governance, and the technology.
According to Gartner, 56% of CEOs believe that digital improvements did lead to revenue growth in their companies. Entire leadership teams, including CEOs, must be able to look ahead to and connect to digital trends.