strategy, not technology, drives digital transformation

Strategy, Not Technology, Drives Digital TransformationBecoming a Digitally Mature Enterprise

Excerpted from the MIT Sloan Management Review and Deloitte Digital Business Study

2 Deloitte University Press | Becoming a Digitally Mature Enterprise | @DU_Press @DeloitteDigital #DigitalEvolution Copyright © 2015 Deloitte Development LLC. All rights reserved.

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.




“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.”




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




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.




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




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”


% Respondents




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




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.




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”


% Respondents




“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?




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.


% Respondents

Respondents from earlier stage companies are not confident in their leaders’ digital capabilities




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




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”




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




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




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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http://dupress.com/articles/digital-transformation-strategy-digitally-mature/?id=us:2sm:3ss:dup1213:eng:dup:071415





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



http://dupress.com/articles/social-business-study-mit-smr/?id=us:2sm:3ss:dup713:eng:cons:100114

http://dupress.com/articles/social-business-study-mit-smr/?id=us:2sm:3ss:dup713:eng:cons:100114


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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