60 Stats you have to know before embarking on your next business transformation initiative.

The term Business Transformation is one of the most hot button topics at the board room tables today.  Whether it's fear of competition, lack of differentiation, or business volatility, companies are turning to business transformation as a form of survival in an ever technologically-changing and digitalized landscape. 

The once-clearly forged boundaries of industries are merging faster than ever before, with digital advances much at the heart of these blurred boundaries.  Companies are eager to learn the lessons from former business or industry giants who have succumbed to smaller, more forward-thinking and nimble companies. 

Whether your organization is launching or thinking about launching a business transformation effort, take some heed. While there are lessons are to be learned from companies who didn't recognize the need to transform their business and didn't react until it was too late, there are even more important lessons to learn from companies who have taken on this challenged and what they did and didn't do. 

I've compiled 60 Stats every company should know before embarking on this extremely important initiative.  You'll see that one of the key focal areas that are most cited among these stats is the state of DIGITAL business transformation. 

These stats have been carefully organized into five key sections from a variety of studies conducted in the past 2-5 years.  

  1. Current state of business transformation
  2. Why the need for business transformation now
  3. Business transformation's impact on business
  4. Why business Transformation can fail 
  5. What companies need to do to make it work

THE CURRENT STATE OF TRANSFORMATION

This first set of stats talks specifically about the state of companies today.  Are companies prepared to embark on this challenge, how many have started, do they feel they have succeeded, etc?  

While THE FEW ARE PREPARED TO EXECUTE

SOME HAVEN’T EVEN STARTED

A MAJORITY OF THOSE WHO HAVE TRIED, FAILED

  • Research indicates that the failure rate of change programs is at nearly 70-80%. 

ONLY THE FEW ARE FULLY DIGITAL

  • Only 1 out of 10 companies (10%) say they describe themselves currently as fully digital. - The Economist Intelligence Unit Digital Evolution Report, 2016

WHY IS BUSINESS TRANSFORMATION IMPORTANT NOW

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We've talked about the current state of where companies are in the business transformation phase of their business.  This second set of stats looks specifically at why business transformation is important right now.  

RESHAPES CORPORATE STRATEGY

  • By the end of 2017, two-thirds of the CEOs of Global 2000 companies say they will have digital transformation at the center of their corporate strategy. - IDC FutureScape: Worldwide Digital Transformation 2016 Predictions, 2015

PROVIDE COMPETITIVE OPPORTUNITY

  • The majority (87%) of companies believe that digital transformation provides their company with a competitive opportunity.  Source: CapGemini

Business SURVIVAL

  • Only a quarter (27%) of executives perceive digital transformation as a "matter of survival." Source: CapGemini

THERE IS A SENSE OF URGENCY

  • 55% of companies without an existing digital transformation program say the timeframe to adopt one is a year or less. – Are Businesses Really Digitally Transforming or Living in Digital Denial, Progress, 2016
  • 85% of enterprise decision makers feel they have a timeframe of two years to make significant inroads on their digital transformation before suffering financially and/or falling behind their competitors. – Are Businesses Really Digitally Transforming or Living in Digital Denial, Progress, 2016
  • Fundamental change that generates a strong impact on results in less than two years, such as mergers and acquisitions (57%), outsourcing and off-shoring (53%), restructuring (46%) or strategic changes (46%). These programs involve external players and generate major transformation within the organization.
  • Programs that generate comparative improvement, such as value-chain optimization (33%), cross-functional performance improvement (44%), information systems redesigning (54%)
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IMPACT ON BUSINESS

The top three digital transformation drivers are improved customers experience, increased speed of innovation and improved-time-to market - (Source: Leading Digital Business Transformation, Forrester / Squiz / SugarCRM, 2016)

ENABLING REAL TIME TRANSACTIONS

IMPROVE EFFICIENCY OF OPERATIONS

ACQUIRE NEW CUSTOMERS

NEW PRODUCT DEVELOPMENT

INCREASED MARKET SHARE

BETTER CUSTOMER EXPERIENCE / CUSTOMER ENGAGEMENT

MORE POSITIVE EMPLOYEE MORALE

GREATER COMPANY ENGAGEMENT

INCREASE CUSTOMER REVENUE, REVENUE GROWTH

CHANGING THE WAY WE WORK

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WHY BUSINESS TRANSFORMATION COULD FAIL

COMMUNICATION ISSUES

  • 70% of executive expressed dissatisfaction with the communication of objectives to employees (Source: “Trends in business Transformation” is a white paper produced by Capgemini Consulting and written in co-operation with the Economist Intelligence Unit.)

PEOPLE MANAGEMENT ISSUES

  • 75% of executives expressed dissatisfaction with training, commitment and people management. (Source: “Trends in business Transformation” is a white paper produced by Capgemini Consulting and written in co-operation with the Economist Intelligence Unit.)

INABILITY TO EXECUTE

  • 73% of executives consider themselves to be unsuccessful in avoiding slippage in execution time. (Source: “Trends in business Transformation” is a white paper produced by Capgemini Consulting and written in co-operation with the Economist Intelligence Unit.)

UNMEASURABLE 

  • 70% of executives say they are not in a position to properly assess the success of their program. (Source: “Trends in business Transformation” is a white paper produced by Capgemini Consulting and written in co-operation with the Economist Intelligence Unit.)

LACK OF TECH AND TECH KNOWLEDGE

  • 52% of executives site "a lack of familiarity with technology" as a barrier to digital transformation. (Source: Santoku)
  • Survey respondents rated "current IT systems" as the third biggest obstacle to achieving digital transformation. (Source: SloanReview)
  • Many executives see  security concerns and insufficient technical skills (25%), and a lack of organizational agility (25%) as the top five barriers keeping their organization from taking advantage of digital trends. (Source: Digital Business Global Executive Study, MIT Sloan Management Review, 2015)

LACK OF DIGITAL DIFFERENTIATION

  • Only 5% of organizations feel that they have mastered digitally to a point of differentiation from their competitors - Digital Transformation In The Age Of The Customer, Forrester / Accenture, 2015

LACK OF NEW BUSINESS MODELS AND STRATEGIES

  • A third of executives (33%) see the lack of an overall strategy as a challenge to digital transformation.  (Source: Digital Business Global Executive Study, MIT Sloan Management Review, 2015)
  • Other big challenges of digital transformation include developing new business models and strategies to increase connectivity and engagement (43%), implementing a digital strategy across the organization (39%) and recruiting employees with the right digital skills (32%). (Source BT CIO Report, 2016)

COMPETING PRIORITIES

SOLE OWNERSHIP TO ONE PERSON OR GROUP

VOLLEYING FOR OWNERSHIP OF DIGITAL

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WHAT COMPANY NEEDS TO MAKE IT WORK

LEADERSHIP OVERSIGHT

  • By 2017, 60% of companies with a digital transformation strategy will deem it too critical for any single one functional area and create an independent corporate executive position to oversee the implementation. (Source: IDC FutureScape: Worldwide Digital Transformation 2016 Predictions, 2015)

METRICS

  • 29% of organizations currently see ‘metrics and measurements’ as critical to their digital success. (Source:  Digital Transformation In The Age Of The Customer, Forrester / Accenture, 2015)

PEOPLE Management

  • Digital leaders consistently rate usability, customer experience, and creative skills as some of the hardest skills to recruit for staffing and hiring. (Source: For Digital Business, Forrester, 2016)

TECHNOLOGY

  • 57% of organizations say that implementing key digital technologies is critical to enabling their digital business - Digital Transformation In The Age Of The Customer, Forrester / Accenture, 2015

3RD PARTY PROVIDERS

  • 88% of firms are using third-party providers for at least one component of their digital transformation -  Digital Transformation In The Age Of The Customer, Forrester / Accenture, 2015

IMPROVED CUSTOMER EXPERIENCE

  • By 2018, 80% of B2C companies will have created immersive, authentic  omni-experiences for customers, partners, and employees; 60% of B2B-centric companies will have done the same - IDC Future Scape: Worldwide Digital Transformation 2016 Predictions, IDC, 2015

DIGITAL GOVERNANCE 

  • In the next twelve months, 52% of businesses plan to establish new digital governance and transformation management - Digital Transformation In The Age Of The Customer, Forrester / Accenture, 2015 (Source: Jake Hird, Strategy Consultant; 101 Digital Transformation Statistics (2016)