CEOs Need a Clear Vision for Digital Business Transformation
Digital transformation is dominating the attention of today’s chief executives — but their vision is a little hazy. Despite their hopes for profit and growth, nearly half of CEOs lack clearly defined goals for this bold transition.
A recent Gartner survey of 388 chief executives found that 42 percent of respondents plan to transform their organization into a digital business, which may include integrating technologies such as cloud, mobile, social and analytics. However, growth remains the No. 1 business priority for 58 percent of CEOs surveyed, Gartner reports.
Rising Investment in Digital Business
The Gartner findings mirror a recent IDC study, which shows that half of the top 2,000 companies worldwide will rely on digital services as a core aspect of business by 2020. Digital transformation will stimulate an awe-inspiring $2.2 trillion in investments by 2019, IDC forecasts.
This transformation is leading CEOs to focus more sharply on product improvement and technology. According to the Gartner study, nearly twice as many chief executives intend to build up in-house technology and digital capabilities compared with those who plan to outsource it — 57 percent versus 29 percent, respectively.
Gartner calls this trend the “reinternalization of IT,” a strategy that brings information technology back to the core of the enterprise to deliver new tech skills that provide a competitive advantage.
Goals Remain Hazy
But while a growing number of CEOs have digital business aspirations, nearly half have no success criteria for digital transformation, the Gartner survey found, and they’ll likely need help from their CIOs to determine these goals.
So, where to begin?
“It starts by remembering that you cannot scale what you do not quantify, and you cannot quantify what you do not define,” said Mark Raskino, vice president and Gartner Fellow, in the Gartner press release. “You should also ask yourself: What is ‘digital’ for us? What kind of growth do we seek?”
Raskino adds that CEOs must also realize that being adaptable, collaborative and open-minded is essential for digital transformation, and CIOs can help their C-suite colleagues engage in “more abstract thinking about the nature of digital business change and how to lead it.”
Transformative Leaders Are Needed
Business transformation isn’t a new concept: Companies have been adapting to technological innovations for more than a century. Some have evolved more successfully than others — Forbes points to the contrast between Blockbuster and Netflix, for example.
For digital transformation to succeed, management must embrace it fully, not proceed halfheartedly.
“Digital transformation is helpful and important, but in my opinion, it’s not the process itself but the mindset of the leadership heading the charge that shapes your organization’s long-term success with incorporating new technologies,” Newman writes.