DIGITAL TRANSFORMATION IS DIVERSE, BUT THE SUCCESS FACTORS ARE REMARKABLY UNIFORM
by Claus Helbing, Platinion Managing Director, Boston Consulting Group
Digital transformation remains a critical priority for enterprises of all sizes in the modern business landscape. Major multinational corporations down to the smallest food and beverage retailers are seeking to leverage the potential of digital platforms and technologies to unlock greater value for their businesses.
At BCG Platinion, we work with organisations across Asia Pacific and around the world to support businesses on their digitalisation journeys. The importance of such efforts is clear—helping boost efficiency and improve competitiveness while unlocking new markets and business opportunities.
The COVID-19 pandemic has triggered an even greater impetus for transformation, with more than 80% of companies indicating a heightened urgency in response to the global shifts triggered by the pandemic. Companies recognise the vital importance of shifting to digital solutions to connect with customers and service clients in a more dynamic and responsive manner.
Despite the importance of this imperative, BCG’s research shows just 30% of businesses report their digital transformations are successful. In our Global Digital Transformation 2020 Survey, we explored what success looks like for digital transformation and identified six critical factors that unlock transformative potential for businesses regardless of size, location, or sector of operation.
The path to digital transformation
Digital transformation is a journey, and one which begins from varied starting points and can take differing paths forward. It’s important to understand what ‘success’ truly means in this multifaceted landscape.
In our Global Digital Transformation study, we define success by identifying the targeted outcomes outlined at the beginning of a transformation journey, against those ultimately achieved. Digital transformation goes beyond a static point in time however, so we also explore the sustainability of these outcomes—and the people involved in the transformation—in order to build a holistic picture of what a successful digital transformation looks like.
Our latest research provides a truly global view, looking at small, medium, and major enterprises around the world working in private, public, and state-owned operating models. Almost one-third (32%) of respondents were in Asia Pacific (APAC), demonstrating a heightened focus on digital transformation that echoes my own experience of business priorities in the region.
Unifying factors of success
There’s perhaps a sentiment in business circles that digital transformation is such a diverse concept that capturing true success factors is impossible. How can a major oil and gas operator in Thailand truly compare to a bespoke financial services organisation in Singapore? Our findings offer a fascinating rebuttal to that theory.
In order to understand the key factors of successful digital transformations, BCG’s research established 80 different elements which could contribute to success. Through our analysis, we identified six target success factors that, if undertaken correctly, delivered success to ~80% of businesses. These success factors were consistent across geographies, industries, business size and scope:
- Integrated strategy. Create a holistic strategy that integrates both a business and technology perspective, incorporating vision, prioritisation of key outcomes, technology and data, people and culture, and the roadmap to implementation. This should include an agile strategic approach that can adapt to a changing business landscape. Transformations based on integrated strategies >80% more successful than those which are not.
- Leadership and management. Leadership must champion and promote digital transformation, with a particular focus around the commitment by top leaders to encourage and promote middle-management support to drive success.
- High-calibre talent. Convincing existing high-calibre talent of the benefit of being part of transformation stories can improve success rates by almost half (47%). Your teams need to understand the important role they can play and how that can help their future positioning in the organisation.
- Agile mindset. Embrace an agile mindset in terms of being flexible enough to adapt your strategy to market shifts, changing priorities, and issues that emerge during transformation.
- Effective monitoring. Without a way to measure success, it’s impossible to evidence and inform your transformation achievements and to allow for stringent decision making. Clear KPIs and consistent monitoring can improve the chances of success by 74%.
- Business-led technology and data platforms. Transformation should be framed by business goals. It’s vital to define what you wish to achieve, and then identify the right technology to deliver. Technology gains in importance with every year, and using tech well is a key enabler that must not be employed as an afterthought.
Digital transformation is undoubtedly complex. What this study reveals, however, is strategic focus on success factors may be simpler than many of us believe. The key measures outlined above offer a powerful platform to drive digital transformation, regardless of size, location, or industry of operation.