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The digital transformation (DX) wave has been growing for years now, and as technology—and your competition—continue to advance, there are no signs of it ebbing. A recent report by MarketsandMarkets predicts that the spending on DX will more than double between now and 2022 to just under $500 billion, reflecting an annual growth of close to 20 percent.
But much of today’s quarter-trillion dollars in DX spending is wasted on initiatives that don’t succeed. In fact, studies peg the DX failure rate as high as 70 to 84 percent. To avoid this, companies need to stay alert to the warning signs of pending DX defeat. The alternative is not just wasted resources, it could be the difference between success and failure—both for you and your company.
Here are three points to consider as you think about your company’s approach to DX.
1. Digital Transformation is Never Done
Imagine if, in the 60s when the IBM Selectric typewriter was introduced, companies around the globe installed these new electronic marvels and declared their office’s digital transformation to be complete. Yeah, that’s laughable. But it illustrates the point that technology’s forward progress is never-ending. Electronic typewriters led to word processors, which led to office productivity suites, web-and cloud-based office tools and the live integration of CRM data into dynamic documents. In a few years, new advancements will pop up and companies will clamor to take advantage of those newer, faster, easier productivity-enhancing benefits.
On the one hand, we’re seeing many companies today double down on their DX investment, which is why the aforementioned growth rate is so high. The reason is because they recognize the need to constantly improve processes, advance workstyles and increase productivity. On the other hand, a recent Forrester study found that 21 percent of firms say their DX is done, while another 22 percent say they’re just investigating starting or not transforming at all. The bright side: you don’t need to worry about the threat from 43 percent of your competitors. They are truly done.
True digital transformation is never done, however. It’s a continuous process, not only because new technologies and approaches will constantly appear, but also because your business, market and competitors will continuously change as well. You need to constantly reevaluate, adjust and take advantage of new opportunities.
2. Change Never Stops
Technology is constantly advancing. Just like the IBM typewriter, that must-have digital solution you installed a decade ago is probably light years behind what’s considered common today. It’s been replaced by cloud computing, Artificial Intelligence, Internet of Things, augmented reality, quantum computing, 3D printing and so much more. You don’t need to be on the bleeding-edge (or even cutting-edge) of technology to stay relevant and competitive, but you should constantly be evaluating new DX technologies and looking for potential opportunities.
Business strategies and techniques are constantly advancing as well.Think of how email transformed marketing, then online advertising, then social media, then influencer marketing and then predictive lead scoring. In the early 2000s, solution selling was all the rage, and it probably sucked up billions of dollars in resources as companies changed their sales techniques. Today, the death of the B2B salesman has been predicted for years. So has the must-have advent of social selling, account-based selling and challenger selling.
In other words, the only constant in business is change. Part of this change is realizing that DX isn’t a single project with a start and an end date. Smart companies realize this, which is why 40 percent have a “fully staffed digital leadership team.” They’re not treating DX as a side project for IT; it’s a dedicated function. And, they’re not just installing one system and calling it a day. Leaders know that DX benefits have a multiplying effect, where the real value comes from sharing data across solutions, enabling automation across functions and making sure a customer has a great experience as they’re handed-off from marketing to sales to services to support. That value can only be seen from a strategic, cross-functional perspective.
Your business is undoubtedly different than it was a decade ago. You might be targeting the same sectors and have the same products and differentiation, but how you collect data and the tools you use to operate your business have changed. Your DX strategy has to change as well, and much of that comes from leveraging the value of sharing data across your company’s various systems and solutions.
3. Competitors are Doing More
If you’re the undisputed leader in your market, then you can stop reading here. But if you have competitors ahead or close behind, you know that it’s easy to have those roles reversed. One misstep can make or break any deal, or quarter. When companies transform digitally, they’re able to better understand their own business and which levers to pull to make improvements or avoid disasters.
Those who view DX as a competitive advantage know the value in collecting, analyzing and sharing the data involved in all aspects of business. Tracking something as simple as the time to review a sales contract can unearth process hurdles or outright roadblocks that could result in customers finding you difficult to work with or even lost deals. DX provides the tools to find and address a problem like this and to accelerate all aspects of business, while also eliminating errors and streamlining processes.
Need proof? Harvard Business School research shows that “digital leaders” have higher gross margins, higher earnings and higher net incomes than the laggards. The leaders also spend more on IT than their counterparts, but only slightly. That means they are spending smarter and more strategically on DX by focusing on more bang for the buck and doing so in areas that will make a bigger impact. Researchers found that “leaders are two-and-a-half times more likely to harness real-time data and analytics to deliver tailored customer experiences and are also two-and-a-half times more likely to use analytics to prescribe business actions that limit customer turnover.”
The study also found that DX leaders are emphasizing data, CRM, the customer experience and time-to-market, among other things. This focus on “front of house” and customers is accelerating sales and revenue attainment, which translates into more deals won, more customers retained and more customers stolen from the competition.
Nothing hits all of these areas more than the sales process, which underscores the need to make sales easier for your reps and your customers. Think digital signatures, faster contract negotiations, an easier sales process and more personalized and targeted sales efforts.
Continue Your Momentum
DX is a process that has to be built around people, teams and solutions. Most of all, it must be built around your customers.
Many companies are looking towards the future with DX, but in the process, they’re assuming that the DX initiatives they deployed yesterday allow them to check a box. In reality, no DX box is ever checked.
You shouldn’t ignore the proven advances that have taken place in the past decade and how your current systems, processes and solutions could benefit from them. We think the documents that are at the heart of your business are a great, and often ignored, place to continue your digital transformation.
What are you doing to digitally transform how you create, share, and leverage the data within your own documents?