What’s Driving Digital Transformation Across Organizations?

Building on his 2014 research of digital transformation, principal analyst Brian Solis studied how companies are changing, and the challenges and opportunities they face while undergoing a digital transformation. Based on insights and data from more than 500 digital strategists and executives, the report found that companies are still facing significant challenges to operating in a digital economy.

The report, “The 2016 State of Digital Transformation,” shares the latest facts and figures on the top drivers, challenges and best practices of companies that are undergoing a digital transformation.

Key Findings

In our research, we identified key insights and trends impacting companies going through a digital transformation.

• Customer Experience (CX) remains the top driver of digital transformation but IT and marketing still influence technology investments
• 55% of those responsible for digital transformation cite “evolving customer behaviors and preferences” as the primary catalyst for change. Yet, the number one challenge facing executives (71%) is understanding behavior or impact of the new customer
• Only half (54%) of survey respondents have completely mapped out the customer journey. This means that many companies are changing without true customer-centricity
  41% of leaders surveyed said they’ve witnessed an increase in market share due to digital transformation efforts, and 37% cite a positive impact on employee morale
• The CMO vs. CIO: Digital transformation is largely led by the CMO (34%) not the CIO/CTO (19%)
• Innovation tops digital transformation initiatives at companies today. 81% said it was at the top of their agenda, 46% stated their company has launched a formal “innovation center.” Right behind innovation was modernizing IT infrastructure (80%) and improving operational agility (79%)

Undergoing a digital transformation? Contact us for a digital maturity assessment.

To help companies navigate the digital transformation journey, Altimeter and Prophet have developed a diagnostic that assesses a company’s digital maturity. The tool provides an objective look at the current digital state vs. ideal future state while identifying major perceived gaps and opportunities that can be pursued as part of the digital transformation journey. Contact us today to learn more.

Download the full report below.

How Companies Are Investing in the Digital Customer Experience

Digital transformation isn’t a trend owned by a particular role, nor a discipline that belongs to one department alone. It is, however, a significant movement where daring business leaders venture into tomorrow’s markets, today.

In 2013, Altimeter researched how businesses explore digital transformation. One finding revealed that while the word “digital” is part of “digital transformation,” the essence of digital transformation comes down to people and how their digital behaviors differ from that of the traditional customers before them. It’s also more than that.

In our initial report on the topic, Digital Transformation: Why and How Companies Are Investing in New Business Models to Lead Digital Customer Experiences, we set out to determine how digital transformation unified disparate digital efforts under a common vision. In the process, we uncovered a more human story. We followed up our initial research with a 2014 survey, aimed at digital strategists, to further understand the state of digital transformation.

This report shares its results and is designed to complement Altimeter’s annual State of Social Business report. Combined, this research helps strategists drive social business evolution and digital transformation based on insight from peers and market leaders.

Download the full report below.

The Race Against Digital Darwinism

In our research, we learned that digital transformation is a movement progressing without a universal map to guide businesses through proven and productive passages. This leaves organizations pursuing change from a known, safe approach that correlates with “business as usual” practices. Operating within the confines of traditional paradigms without purpose or vision eventually challenges the direction, capacity, and agility for thriving in a digital economy.

After several years of interviewing those helping to drive digital transformation, we have identified a series of patterns, components and processes that form a strong foundation for change. We have organized these elements into six distinct stages:

• Business as Usual
• Present and Active
• Formalized
• Strategic
• Converged
• Innovative and Adaptive

Collectively, these phases serve as a digital maturity blueprint to guide purposeful and advantageous digital transformation. Our research of digital transformation is centered on the digital customer experience (DCX) and thus reflects one of many paths toward change. We found that DCX was an important catalyst in driving the evolution of business, in addition to technology and other market factors.

Now in its fifth year, Altimeter‘s annual “State of Digital Transformation” research continues to document the constantly evolving enterprise. As disruptive technologies and their impact on organizations and markets continue to progress, our research aims to capture the shifts and trends that are shaping modern digital transformation.

Our global study revealed insightful differences between businesses operating in China, and those in the rest of the world, on how they think of and approach digital transformations.

In China’s distinct and fast evolving landscape, digital transformation is even more important.

In the past few years, the tech giants BAT (Baidu, Alibaba, Tencent), JD and some of our most recent tech unicorns including Didi Chuxing, ByteDance (TikTok and Toutiao), RED and Meituan Dianping among others, have led the first wave of digital transformation. Now, we are entering the ‘second half’ of the digital revolution, where more traditional businesses are transforming themselves to become more digitally-led to compete and thrive.

• Over the past decade, China’s growth and technology transformation has been led and fueled by BAT (Baidu, Alibaba, Tencent). We are now entering the next chapter of digital transformation where businesses and brands must adapt and lead their own digital transformation to compete and thrive.
• In China’s unique digital ecosystem, almost all companies are undergoing digital transformations. Compared to other countries in the world, Chinese enterprises embrace digital transformation in a more proactive way—with CEOs playing a bigger role in leading the effort. Additionally, companies in China prioritize consumer-facing touchpoints, such as customer experience and e-commerce, to a significantly higher degree in their digital transformation.
• It is worth noting that having a strong organizational culture is instrumental to sustainable growth. However, companies in China are overwhelmingly more concerned with ROI than internal initiatives like organizational structure and employee engagement. While driving a customer-centric growth is a competitive advantage for companies operating in China, internal organization, way of working and company culture are also essential enablers for tapping into the Body, the Mind, and the Soul of the organization.

Download the full report below.

Digital is an enterprise-wide strategic priority — but there’s work to be done

Now in its fifth year, our annual “State of Digital Transformation” research continues to document the constantly evolving enterprise. As disruptive technologies and their impact on organizations and markets continue to progress, our research aims to capture the shifts and trends that are shaping modern digital transformation.

In 2019, strategic digital transformation is only becoming more pervasive moving beyond IT to impact competitiveness throughout the organization. Budgets are soaring. The list of disruptive technologies on the radar of stakeholders is expanding. Ownership is moving to the C-Suite and managed by cross-functional, collaborative groups. Customer experience (CX) continues to lead digital transformation investments, but as we observed in 2017, employee experience and organizational culture are also rising in importance to empower and accelerate change, growth, and innovation.

Digital Transformation as an Enterprise-Wide Movement

This year, it’s clear that digital transformation is maturing into an enterprise-wide movement. Digital transformation is modernizing how companies work and compete and helping them effectively adapt and grow in an evolving digital economy.

What’s also evident is that there is still much work to do as companies are, by and large, prioritizing technology over grasping the disruptive trends that are influencing markets and, more specifically, customer and employee behaviors and expectations.

The State of Digital Transformation: 5 Key Takeaways

• A successful digital transformation is an enterprise-wide effort that is best served by a leader with broad organizational purview. For the second year in a row, CIOs are reported as most often owning or sponsoring digital transformation initiatives (28%), with CEOs increasingly playing a leadership role (23%).
• Market pressures are the leading drivers of digital transformation as most efforts are spurred by growth opportunities (51%) and increased competitive pressure (41%). With high-profile data breach scandals making daily headlines, new regulatory standards like GDPR are also providing impetus for organizations to transform (38%).
• While there is a growing acknowledgment of the importance of human factors in digital transformation – like employee experience and organizational culture – most transformation efforts continue to focus on modernizing customer touchpoints (54%) and enabling infrastructure (45%). But many organizations are not doing their due diligence when it comes to understanding their customers, with 41% of companies making investments in digital transformation without the guidance of thorough customer research.
• Organizational buy-in remains a top challenge for those leading digital transformation. The companies we studied report digital transformation is still often perceived as a cost center (28%), and data to prove ROI is hard to come by (29%). Cultural issues also pose notable difficulty, with entrenched viewpoints, resistance to change (26%), and legal and compliance concerns (26%) stymieing progress.
• Innovation is staking its claim within the organization. Nearly half of respondents report that they are building a culture of innovation, with in-house innovation teams becoming the norm.

Download the full report below.