Too many cooks – a recipe for digital transformation inaction?
A 2020 study by Boston Consulting Group arrived at an alarming conclusion: 70% of digital transformations fail, falling short of their objectives and often resulting in profound consequences.
These disappointing results come despite the significant amounts of time, effort, and money that companies are investing. According to the EY-Parthenon 2022 Digital Investment Index (DII), investments in digital transformation this year are up 65% from 2020.
Speed and success are critical as businesses look to radically transform their operations to compete effectively in their industry. Certainly, where customer communication strategy is concerned, there is a clear understanding of the benefits that digital transformation can bring to outdated, inflexible and expensive legacy systems. Such systems are often heavily reliant on manual processes and on-site processing – a way of operating that makes less and less sense in today’s highly agile, hybrid world of work.
Owning the challenge
So, who owns the digital transformation challenge as it relates to customer communications? We asked this question in a recent survey to senior decision-makers across retail, utilities and financial services, and the results may partly explain why business are falling short in their digital transformation ambitions.
WHO IN YOUR ORGANISATION IS RESPONSIBLE FOR CUSTOMER COMMUNICATIONS STRATEGY AND BUDGET RELATING TO THE DIGITAL TRANSFORMATION OF CUSTOMER COMMUNICATIONS?
|
CEO/board |
47% |
|
Transformation or Customer Experience Director – enterprise level |
45% |
|
Transformation or Customer Experience Director – divisional focus |
36% |
|
Marketing – enterprise level |
30% |
|
IT – enterprise level |
28% |
|
Procurement and operations – enterprise level |
22% |
|
IT – divisional focus |
21% |
|
Marketing – divisional focus |
20% |
|
Procurement and operations – divisional focus |
13% |
Respondents were asked to tick all that apply
The importance placed on digital transformation, and the record levels of investment being channelled into solutions might lead one to expect that decision-making is happening at the very top. However, although the CEO/board was nominated most frequently (47%), ownership of the digital transformation challenge (as it relates to customer communication management) ranges from the CEO down to departmental divisional focus.
Customer communication touches every part of the business and has a huge influence on the business bottom line. If it isn’t already a board-level concern, should it be? These statistics paint a clear picture of a challenge that is bouncing between departments and owners rather than one that is being clearly defined and strategically owned.
In fact, 72% of respondents selected multiple owners for digital transformation within their business rather than one clearly defined decision-maker.
|
Respondents selecting just one owner |
28% |
|
Respondents selecting multiple owners |
72% |
Are projects stalling because they are falling between departments? The evidence points that way. In the same survey, when asked to identify major barriers to digital progress, 20% of respondents nominated ‘No single business owner for digital transformation decision making’.
Not simply a technology challenge
This focus on people and leadership is pertinent. Typically, when businesses think about digital transformation, they pay too much attention to the word digital and not enough to transformation. As much as this is a technology challenge, it is also a leadership one.
Simply introducing additional ‘digital’ positions is not the answer. As our survey shows, organisations already have many functional roles with digital responsibilities, a structure that can lend itself to confusion. Clearly defining each digital role is critical, as is having one person in the driving seat overseeing digital transformation projects.
Without this steer, there is a danger that departments will act in siloes, pressing ahead with their own projects to solve immediate and obvious departmental and functional challenges. These can lead to expensive problems down the line as businesses attempt to connect and unify operations but are unable to do so because of disparate departmental technologies.
There is also the danger that existing departmental technology then dictates what happens throughout the business as a whole. The argument may be that the existing technology is working fine and that replacing it is an unnecessary hassle. However, this is back-to-front thinking, allowing existing technology to dictate forward strategy and direction, rather than the other way around.
You don’t have to eat the elephant
A transformation always suggests sweeping change. In fact, businesses are now recognising that digital transformation can happen in small steps – or bite by bite to use the eat the elephant analogy. Of course, businesses should ensure that each step falls in line with a broader strategic vision, rather than happening in previously mentioned siloes. But there is real merit in starting small, testing transformation on specific projects, and expanding from there.
Today’s tools are agile and flexible, enabling business to easily scale up and down without a complete re-think. The other factor that many businesses find surprising is the speed with which transformation can happen. Collaborative sprints of development – where expert suppliers work hand-in-hand with businesses to scope out projects and test solutions – mean that projects can be up and running in as little as eight weeks.
Ultimately, businesses know the worth of digital transformation, particularly as it releases to customer communication management. The challenge right now is to identify and adopt a leadership structure that drives transformation forward without leaving any department or employee behind. Getting this leadership aspect right is critical to immediate, and continuous, success.