It may have already been said many times by the most qualified experts, but all insistence becomes too little when it comes to something so crucial in the times we live in: Digital Transformation is NOT about technology, but about people and processes. In case you are not sufficiently warned, a new study confirms that the keys to Digital Transformation (DT) are in the day-to-day running of the organization, not in the achievement of objectives related to technological change. It is the path, not the destination.
The study comes from one of the world's top players in market intelligence and IT consulting: International Data Group, better known by its initials IDC. Sponsored by Infor and reported by specialized media such as Diginómica, the study is based on a survey of 1,048 executives in three geographic areas (Americas, Asia/Pacific and Europe), and five vertical markets: healthcare, retail manufacturing, process manufacturing, retail and public sector. It aims to reveal the main drivers of TxD and identify the main barriers to it, but also aims to uncover the main key performance indicators (KPIs) of TxD project success.
The main barriers are, according to this in-depth study, existing business models, organizational culture and organizational structure. In other words, not technology, but people and processes. Therefore, whoever seeks to implement the trendy binomial of Digital Transformation is mistaken from end to end if it does so through an approach that prioritizes technology.
The list of KPIs highlighted in the macro survey conducted by IDC reveals that the top performance indicator is enhanced predictive analytics, to anticipate market changes and customer demands. In other words: having a strong ability to process volumes of structured and unstructured data. It may be argued that we are talking about technology, but more important than the solutions that are applied (specific programs that provide an understanding of the data analyzed), is the existence of specialized profiles, business analysts capable of understanding the digital environment of the market that generated the initial data. Without the latter, no report can be exploited.
The next two KPIs are very close to the first one. We are talking about:
- Productivity improvement, both at the workforce and decision-making levels, and
- The growth in an organization's total revenue that occurs as a direct result of engaging customers with new digital tools.
Be careful with these KPIs, because they must be put in relation to what the leading consulting firms in this area maintain. It is not just about EBITDA, or the percentage of digital vs. total revenue. It is about analyzing elements such as SEO conversion, digital traffic and the proper attribution of responsibilities in business successes.
Whenever we talk about Digital Transformation, it is worth keeping in mind a few words from Sprint CEO Rob Roy in an interview with McKinsey:
Digital transformation is not about digitizing a channel or simply doing more things digitally. It's a much broader scope than that. We're really looking to improve and simplify customers' "moments of truth," and all the support processes that build a truly world-class omnichannel experience. We're now working with every area in the business to help everyone think and act digitally for the things they control. And we're starting to see real gains in productivity, simplification, cost reduction and leveraging previous sales-centric gains.
Photo by Jamie Street on Unsplash
