What Makes Digital Transformation So Challenging?

by Press Release    Oct 26, 2015

challenge

A new study by The Economist Intelligence Unit reveals that while a majority of organizations have yet to implement their digital transformation initiatives. This is indeed worrisome because most expect their operations to be 80 percent digital or more in the next five years. The study also reveals that evolving customer expectations are the biggest drivers to digital transformation, while company culture and finding the right organizational model are the biggest challenges.

The study, sponsored by Accenture and Pegasystems,is based on a global survey of 444 executives from the healthcare, finance and telecommunications industries. The findings suggest that digital transformation aspirations are high, yet making progress can be complex. 

Only 18 percent of organizations today have fully integrated customer facing processes with their back office systems and only 10 percent report their businesses are fully digital. Establishing the right operational governance model and evolving company culture are tied as the top challenges to digital transformation, while evolving customer expectations rank as the top driver.

Analysis by The EIU reveals two statistically significant groups within the survey sample: those who are ahead of the curve and those who are behind it. Those who are ahead of the curve are more likely to be driven by achieving market leadership and disrupting their core business as motivation for digital transformation. By contrast, behind-the-curve companies are more inward-facing in their focus and are more likely to cite cost pressure and regulatory compliance as drivers leading them to undertake digital initiatives.

The report also reveals the organization practices that have helped some companies get ahead of the digital transformation curve. For example, they are more likely than behind-the-curve companies to have set up a separate unit with responsibility for digital business and have a chief digital officer leading their transformation initiatives.

However, these are transitional measures, the report concludes. “The ultimate aim of any digital transformation initiative should be the ability for the whole organization to transform constantly in response to digital innovation,” says Pete Swabey, senior editor at The Economist Intelligence Unit.