strategy, not technology, drives digital transformation
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Strategy, Not Technology, Drives Digital TransformationBecoming a Digitally Mature Enterprise
Excerpted from the MIT Sloan Management Review and Deloitte Digital Business Study
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This year’s MIT Sloan Management Review and Deloitte global study of digital business found that digital transformation isn’t really about the technologies.
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The strength of digital technologies—social, mobile, analytics, and cloud—doesn’t lie in the technologies individually.
Instead, it stems from how companies integrate them to transform their businesses and how they work.
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“How close is your organization to that ideal?”
Digital Maturity Levels% Respondents
Maturing(7-10)
Developing(4-6)
Early(1-3)
26%
45%
29%
Early Developing Maturing
“Imagine an ideal organization transformed by digital technologies and capabilities that improve processes, engage talent across the organization, and drive new and value‐generating business models.”
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Leaders need to adapt digital programs in responseChallenges change as companies mature
Respondents were asked “What barriers are impeding your organization from taking advantage of digital trends? (select up to three)” Ten possible barriers listed.
Lack of strategy Too Many Priorities Too Many Priorities
Too Many Priorities Lack of Strategy Security Concerns
Lack of Management Understanding Insufficient Tech Skills Insufficient Tech Skills
EARLY DEVELOPING MATURING
1
2
3
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Digitally maturing organizations are much more likely to have risk-embracing and collaborative cultures
Leadership is essential in conceptualizing how digital technologies can transform the business
Digitally maturing companies are much more likely to have a clear digital strategy
Strategy Culture Leadership
What separates digital leaders from the rest is a clear digital strategy combined with a culture and leadership poised to drive transformation.
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Only 15% of early stage respondents have a clear and coherent digital strategy. That number climbs to 80% among the digitally mature.
Digital strategy drives digital maturity
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Scope and objectives drive digital strategy
Earlier stage companies need more transformative objectives
To what extent do you agree that the following are objectives of your organization’s digital strategy?
Respondents who answered “Strongly agree” or “Agree”
Early Developing Maturing
% Respondents
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Does your organization have a digital strategy that goes beyond implementing technologies?
“I would rather start by rethinking business and commerce and then work backwards. New capabilities make new solutions possible and needed solutions stimulate demand for new capabilities.”
- Benn Konsynskiprofessor of information systems and operations management, Emory University
10 Deloitte University Press | Becoming a Digitally Mature Enterprise | @DU_Press @DeloitteDigital #DigitalEvolution Copyright © 2015 Deloitte Development LLC. All rights reserved.
Maturing digital organizations focus on building skills
Many companies at the early stages lack the ability to conceptualize how digital technologies can impact the business.
Digitally maturing organizations are 4X more likely to provide employees with needed skills than less digitally mature.
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Digitally maturing organizations are more comfortable taking risks. Business leaders may need to embrace failure as a prerequisite of success.
Taking risks becomes a cultural norm
How do respondents characterize the culture of their organization?Respondents who answered “Strongly agree” or “Agree”
Early Developing Maturing
% Respondents
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“I have never seen a technology drive change on its own. Culture leads the adoption of technology. Our ability to innovate depends on the impatience of our culture.”
- Dr. John Halamka,chief information officer, Beth Israel Deaconess Medical Center in Massachusetts
Does your company culture foster digital initiatives?
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Among the digitally maturing, 75% say leadership has sufficient skills to lead digital strategy. 90% are confident in leadership’s digital savviness.
The digital agenda is led from the top
Confidence in Leadership Capabilitiesby Maturity Level1
1 Percentage of respondents who answered agree or strongly agree.
Early Developing Maturing
% Respondents
Respondents from earlier stage companies are not confident in their leaders’ digital capabilities
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Is your organization confident in its leadership’s digital fluency?
“You have to be an influential leader in the physical, virtual and augmented worlds. We have to engage people through Twitter and other social platforms. But then also stand in front of 100 people and be authentic. We toggle back and forth between virtual and physical platforms all day long.”
- Steve Milovich, SVP of global human resources and talent diversity Disney/ABC Television Group, and SVP of employee digital media at The Walt Disney Company
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Businesses will need to up their digital gameEmployees want to work for digital leaders
83% 85%
80% 81%79%
76%72%
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
21 oryounger
22 to 27 28 to 35 36 to 44 45 to 52 53 to 59 60 orOlder
% Respondents How important to you is it to work for an organization that is digitally enabled or is a digital leader?Respondents who answered “Strongly agree” or “Agree”
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What are companies doing?
Barriers Lack of strategy Managing distractions Security focus
Strategy Customer and productivity driven Growing vision Transformative vision
Culture Siloed Integrating Integrated and Innovative
Talent Development Tepid interest Investing Committed
Leadership Lacking skills Learning Sophisticated
EARLY DEVELOPING MATURING
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Moving from strategy to business value
Most businesses today know they need some level of digital transformation.
But where do you begin?
And how do you know you’re going about it the right way?
ALIGN YOUR DIGITAL LEADERS1
CREATE STRATEGY FOR DIGITAL TRANSFORMATION2
TURN DIGITAL STRATEGY TO BUSINESS VALUE3
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Create an effective strategy for digital transformation via ideation and enablement
The “What” and the “Why”
Digital Ideation
Enablement
• Visionary and discovery• Customer/employee engagement• Business case development• Platform and tool analysis• Digital transformation road mapping• Design led strategy
• Digital architecture• Bring your own device• Centers of excellence• Application strategy engagements• Security and risk activities• Agile adoption• Mobile app management
The “How” and the “When”
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Share your thoughts with the hashtag #DigitalEvolutionFollow @DU_Press and @DeloitteDigital on Twitter
Explore more findings from the 2015 digital business global executive study and research project
Download your copy of the Digital Business Study
Download
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Undertaken by Deloitte in collaboration with MIT Sloan Management Review
About the research
20122013
2014• Survey of nearly 5,000 business executives,
managers and analysts from organizations globally to understand how the digital enterprise is evolving
- 39% of respondents were within the U.S., 61% outside U.S.
- 129 countries, 27 industries- Organizations of various sizes
• Interviewed more than 20 executives and subject matter specialists from a number of industries and disciplines to understand the practical issues facing organizations today
• Article published in MIT SMR Summer edition; feature report to be published July 14th
2015 study follows three years of research focused on social business
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Meet the authors
DOUG PALMERprincipal in the Digital Business and Strategy practice of Deloitte Digital
DAVID KIRON executive editor of the Big Ideas Initiatives at MIT Sloan Management Review, which brings ideas from the world of thinkers to the executives and managers who use them
ANH NGUYEN PHILLIPS senior manager within Deloitte Services LP; leads strategic thought leadership initiatives
NATASHA BUCKLEY senior manager within Deloitte Services LP; researches emerging topics in the business technology market
GERALD C. KANE MIT Sloan Management Review guest editor for the Digital Transformation Strategy Initiative
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About Deloitte University PressDeloitte University Press publishes original articles, reports and periodicals that provide insights for businesses, the public sector and NGOs. Our goal is to draw upon research and experience from throughout our professional services organization, and that of coauthors in academia and business, to advance the conversation on a broad spectrum of topics of interest to executives and government leaders.
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