The Nine Obstacles to Digital Transformation
Digital transformation doesn’t have to be a nightmare for companies.
Companies invest billions in technology because they envision a better bottom line. They see technology as a way to transform operations, customer relationships, or build new business models.
In practice, though, digital transformation vexes companies. It’s hard to get it right the first time — and just when you have it working, everything changes again. The skills needed for automating processes aren’t the same as those needed for putting businesses on the Web, which likewise differ from those needed to make mobile business effective. It takes real investment of will to wear all these different hats simultaneously.
No wonder naysayers like Robert J. Gordon have mocked the Internet industry for the weakness of its revolution, as measured by productivity [a good, reasonably quick discussion of Gordon’s view and the counter-arguments was offered in The New Yorker last spring].
Gordon is not the first contrarian economist to bash technology; Robert Solow, the Nobel Prize-winning MIT economist, famously quipped that he could “see the computer age everywhere except in the productivity statistics.” Solow eventually came around, helped by companies actually making big productivity leaps thanks to their technology in the 15 years after the publication of this remark in his 1987 New York Times book review. Gordon may change his mind someday, too.
But there’s a lot of work to do. A recent survey by MIT Sloan Management Review and Capgemini Consulting offers an emphatic reminder that technology is complicated to manage. The survey, Embracing Digital Technology: A New Strategic Imperative,
draws on almost 1,600 responses to an online survey. The survey shows that companies often struggle to make technology investment a priority. Employees from top management down to staff recognize that new technologies matter when deployed effectively — 81% of those surveyed believed that if digital transformation were a management priority, their companies would be more competitive two years from now.
More competitive companies will presumably also be more productive. If that’s the dream, here’s what the survey says is the nightmare — the nine-headed hydra of digital transformation:
Nightmare #1 Lack of urgency.
The failure of top management to emphasize new technologies was the number one problem cited in the survey.