In 2019 enterprises invested $1.3 trillion in digital transformation initiatives to improve efficiencies, increase customer value, and create new monetisation opportunities.
But here’s the thing – of that investment, a whopping $0.9 trillion delivered little or no value!
Nevertheless, enterprise executives quite rightly still see business transformation as one of their biggest challenges to solve – as both risks from digital disruption and an opportunity for business growth.
McKinsey highlight five factors that significantly improve the chances of a transformation succeeding:
- having the right, digital-savvy leaders in place
- building capabilities for the workforce of the future
- empowering people to work in new ways
- giving day-to-day tools a digital upgrade
- communicating frequently via traditional and digital methods
I want to emphasise just how critical it is to incubate your own talent and build transformation as a competency in your business.
This requires strong executive sponsorship reinforcing the new ways of working and expected behaviour.
You have to break the journey down into a series of fast sprints where empowered teams are supported by partners’ trusted ecosystem.
Annual digital transformation investment of $1.3 trillion is expected to continue to grow every year.
Despite those poor initial returns, there is a significant opportunity to deliver tangible business outcomes from that investment. Executives want (and need) guidance and support on digital transformation from their CFO’s.
This is at a time when the focus of many CFO’s is already shifting.
Accenture’s most recent CFO survey identifies that over 80% of CFO’s are already driving business-wide change, leading efficiency efforts and preparing for volatility. Interestingly they are also exploring disruptive technologies and looking to identify new sources of business value.
CFO’s have a massive opportunity to sponsor and lead a transformation to increase an organisation’s business agility and differentiate it.
By transformation, I don’t just mean how you modernise your legacy infrastructure and applications to drive cost improvement, although that is part of the picture. Nor do I mean using technology to enable new ways of developing digital capabilities working in an agile DevOps way.
I’m really talking about the combination of culture, people, technology, and ways of working across the entire enterprise.
It needs to be seen as a continuous activity that never ends because it’s a new competency, not a destination.
I want to share my insights and experience of leading digital transformation in a series of articles:
- I will start with the case for change, for transformation, touching on some of the business challenges we’re all seeing globally, driving massive change and the appetite for transformation.
- Next, I’d like to share some insights about Amazon’s journey to give a perspective of how Amazon culture drives innovation and agility.
- Then I’ll share observations about the key trends I see emerging in the new 21st century enterprises.
- Finally, I will talk about how to lead transformation, increase business agility, and build a modern digital business.
In the same way that a journey of a thousand miles starts with a single step, it’s the first sprint in a series of high-frequency sprints that starts your digital transformation journey. It’s just a question of getting going and developing transformation as a competency whilst maintaining a strong vision of where you want to go.
What else would you like to learn about leading and championing digital change?
Reach out to me in the comments, or contact me via LinkedIn to continue the conversation.