Top three digital transformation myths debunked

Top three digital transformation myths debunked
While digitization and digital transformation have been the strategic focus of all organizations for a few years now, the challenges wrought by the pandemic crunched the adoption timeline for many organizations.

Globally, the digital transformation market is slated to grow from $470 billion in 2020 to $1,009 billion by 2025, says a report by Research & Markets. In this period, by 2024, the global spending on digital transformation would touch $2.4 trillion. In 2019, enterprises globally were already spending $2 trillion on digital transformations.

According to a Statista report, about 97 of all respondents to the research acknowledged that the pandemic has sped up their transformation initiatives. The reasons were wide and varied, the primary one being the need for the remote working of teams, and of course, the inability to function in offline markets. All business processes need to be transformed online, to ensure business continuity.

Interestingly, many organizations still harbour myths about what digital transformation is. In the process of buying leadership commitment to digitally transforming their organizations, here are the three facts that CIOs need to take note of.

Digital transformation goes a long way beyond technology

While digital transformation is all about the utilization of some emerging technologies, transformation goes a long way beyond just adopting a certain number of technology tools in the business processes.

It is more about people, teams, processes, change management, and transformation of organizational culture. The biggest challenge of this activity is the adoption of digital technologies by human resources (especially the most experienced ones), and that is where change management is the most critical aspect of a transformation journey.

The whole activity is geared towards using technologies to make the business process more adaptable and agile. In reality, a smooth digital transformation is focused on better intra-organization collaboration, a companywide buy-in for the change that follows, a more efficient workflow, better data security, higher market-focused agility, and of course- complete transparency and scalability of all business projects. Ideally, it is more about ironing out kinks of solving market challenges in the business than the mere adoption of exciting new technology tools. It does not mean better technology applications at all, it’s all about more and better alignment between technology enablers and business goals.

So, the idea that the owner of a digital transformation initiative is only the CDO or the CIO, is a huge myth. The entire journey belongs to all business team leaders- for it to succeed.

Myth 2: There is still time to plan for digital transformation

An organization that decided to put off initiating a digital transformation would probably not be functional right now - that’s how critical this is to stay alive, afloat, and profitable in today’s business environment.

We are not even referring to the rapidly changing price of keeping a business on legacy processes. It is a drain on finances to not adopt certain technologies to streamline most of the business processes, in this day and age. Storage on-premise is simply a too big price to pay when one can opt for the cloud. Human skills are simply too expensive when AI and ML can be used to do the same job at a third or less of the cost.

All technologies that encompass the beginning of a digital journey are focused on massive cost reductions. Not adopting them will make any organization a white elephant, unable to survive in today’s walking-the-cutting-edge business environment. So, leaders that feel they can put it off a few more years or months, are not thinking in the best interests of their organization.

Even more importantly, digital transformation imparts the ability to meet clients halfway - for much better marketing connections and efficient service. In the B2B marketing world, the inability to present a seamlessly omnichannel front means hara-kiri of sorts.

Empowering the workforce that is market-facing is the only way to grow and expand markets today. Only digital technologies that can steer business processes towards this connection, can do that.

Since this is not an instant fix, being more of a medium long-term plan, the right time to start the process of digital transformation was yesterday or the day before. So the myth that there is still time, and transformation can wait - is a myth.

Myth #3: The value that digital transformation offers cannot be measured

The value that an organization earns when its technology tools, processes, people and business vision is in complete alignment, certainly can be measured. Reduction in costs, both operational and capital, is a glaring data point for any company to be able to justify its efficacy.

In financial terms too, it is easy to get data on how costs have been saved by streamlining processes, how investments have been measured in terms of higher and rising RoI, and how revenue has been increased by market expansion generated by better and more agile outreach.

A McKinsey report says that in 2016, B2B technology companies have reported a 10% to 20% cost reduction by digital transformation. They also showed revenue growth of 10% to 15% from transforming their customer experience processes. B2B companies that transformed their processes using digital technologies showed five times the revenue growth of their peers.

A Deloitte report said that organizations with higher digital maturity reported 45% revenue growth compared to 15% for lower digital maturity companies in 2020. They are clear and strong justifications to believe that digital transformation is a necessity.

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