Blog_12192018

Digital Transformation: What to Expect in 2019

As predicted, digital transformation was a top concern for organizations in 2018. According to Deloitte’s 2018 Global CIO survey, 96 percent of executives said digital is a strategic business priority. It appears that digital transformation found its way out of the “fleeting distraction” bucket and into the “long-term investment” one.

But investments and intentions do not guarantee innovation—for example, in the Deloitte survey, just 26 percent of respondents said their organization has an enterprise-wide digital strategy in place. And, among organizations that do have a digital strategy plan in place, success became even more difficult to achieve this year.

In an October McKinsey study of digital transformations, only 16 percent of respondents said their digital transformations have improved performance and equipped them to sustain changes in the long term, while an additional 7 percent reported that performance improved but was not sustained. In previous McKinsey studies, the success rate was nearly 30 percent.1

It appears that digital transformation found its way out of the “fleeting distraction” bucket and into the “long-term investment” one

The challenge for organizations in 2019 will be to successfully repeat and sustain their digital transformation efforts. To do so, business leaders need to concentrate on a few key areas:

1. Focus on change management–Digital transformation success depends on organizational and individual ability to change. McKinsey notes a set of factors that increase the chances of a transformation succeeding, and groups them into five categories—all five encourage and enable change in one way or another:

–Having the right digital-savvy leaders in place: Encourages change by example.

–Building capabilities for the workforce of the future: Ensures employees are prepared for the changes to come and are not left behind.

–Empowering people to work in new ways:  Integrated, intuitive, mobile-friendly systems give employees the freedom to do things differently. Choices, not mandates, make change easier.

–Giving day-to-day tools a digital upgrade: When technology works as intended, employees are happier, more productive, and more receptive to change.

–Communicating frequently via traditional and digital methods: Employees need to know how the changes will affect them (“What’s in it for me?). Regular communication makes them part of the process.

2. Make technology adoption and continuous learning higher priority–The McKinsey digital transformation report notes that developing talent and skills throughout an organization is not only a “fundamental action for traditional transformations,” but also “one of the most important factors for success in a digital change effort.” And employees agree, according to a June Deloitte report—90 percent of employees surveyed said they need to update their skills yearly to work effectively in a digital world. Almost half said they need to update their skills continuously to be effective. Considering that only a third of respondents said they are satisfied with how their organization is helping them prepare for working in digital business, 2019 is clearly the year to focus on tech adoption.

3. Put agility and tech skills to work–Agility and tech adoption are more than just buzzwords—they are essential ingredients for survival and success in digital business. In 2019, companies will look for new ways to use technology to improve employee experience, increase organizational and individual productivity, and to drive overall growth.

The World Economic Forum has estimated that digital transformation could deliver a combined value of $100 trillion to society and across industries by 2025. The key for organizations in 2019 and beyond will be to take their digital transformations to the next level and ensure they can sustain and repeat digital successes.

1. The McKinsey report does not delve into why digital transformation success rates have dipped, but it does highlight common factors among companies whose transformations have been successful. See point 1 above—“Focus on Change Management”—and Unlocking Success in Digital Transformations, McKinsey & Company, October 2018

Image: Designed by Creativeart / Freepik

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