Are You Truly Transforming Digitally…or Just Digitizing?
Earlier this year, IDC—a company that focuses on digital transformation—predicted that “global spending on the digital transformation (DX) of business practices, products, and organizations is forecast to reach $1.8 trillion in 2022, an increase of 17.6% over 2021.” The company also forecasted that between 2021 and 2025, spending will grow at a compounded annual rate of 16.6%. That’s a heck of a lot of money being spent to create digital businesses.
Yet McKinsey reports that 70% of transformations fail—so that’s a heck of a lot of money potentially being wasted. Of course, there are multiple reasons why these large-scale initiatives fail, but I can’t help thinking that with digital transformation in particular, there is a challenge in focusing on the right things.
Let’s consider whether organizations are spending enough time thinking about how they can leverage technology to disrupt their industry, or whether they are simply focused on streamlining and digitizing.
Let’s start by exploring the idea of transformation—forget the “digital” bit for a minute. To me, if an organization talks about transforming itself, then the end result should be something fundamentally different than before. I don’t view a drive to be more efficient as transformative. I don’t see
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