Is IT Killing Digital Transformation?
On the one hand, digital transformation has moved technology front-and-center within every business function.
On the other hand, 84% of these digital transformations fail, and when business leaders look for someone to blame for these failures, they often make IT the scapegoat.
Why the Business Blames IT
The general argument for “IT is the cause for digital transformation failure” seems to sound plausible. IT is the face of all things technological, so it feels natural to blame IT if anything related to technology fails.
But the business doesn’t stop there. They get specific. They also argue:
- IT is too slow to manage a fast-moving digital transformation.
- IT has a hard time managing the complexity of digital technology. (48% of business stakeholders state their digital transformations are held back by IT’s inability to handle increasingly complex technology environments.)
- IT doesn’t know how to operate digital infrastructure. (75% of business stakeholders have low confidence in IT’s ability to resolve digital performance problems.)
Unfortunately, there is some truth to each of these arguments. IT does need to learn how to move quicker, manage increasingly complex environments, and operate the new digital infrastructure their stakeholders now demand. But when you look deeper at these stated problems, and the data on digital transformation failure, you see that it might be inappropriate to pin the blame solely on IT.
The Truth About Digital Transformation Failure
The fact is, most of the business’ problems with IT and digital transformation are implementation and operations problems. But when you look at the data on digital transformation failure, you see most of these failures spring from problems with digital technology strategy:
- 56% of executives believe “that a lack of clear and concise strategy is one of the key barriers” to digital transformation.
- 93% of organizations with strategically coordinated digital initiatives are “more effective”, gain a competitive edge, and engage better with their audiences, compared to 63% of organizations that do not have a cross-departmental digital strategy.
- And Forbes states, “”Our research shows that what really makes a difference in a company’s performance and value is a digital business model, not just a few digital projects”.
The point is clear. Digital transformations are more likely to succeed when there is a clearly articulated, enterprise-wide strategy behind it… and more likely to fail when there is no strategic approach driving it. The lack of organization-wide leadership—not an incompetent IT function—appears to be the real cause of digital transformation failures.
Bad Digital Strategy has Not Been IT’s Fault
Now, if IT was the function setting bad digital strategy, then you could still blame IT for digital transformation failure. But in most organizations, IT doesn’t have a strategic role in digital transformations.
Only 7% of business executives say IT is leading their organization’s digital ideas and innovations. On the ground level, only 22% of digital initiatives are being led by IT (compared to 29% being led by individual business units, and 24% being led by dedicated digital units). And at the top level, only 19% of digital transformations are being owned by the CIO (compared to 34% being owned by the CMO, and 27% being owned by the CEO).
In short: It’s hard to blame IT for the strategic failure of most digital transformations because IT isn’t setting the strategy for those digital transformations in the first place.
Who’s Crashing the Digital Bus?
Of course, this begs the question: If IT isn’t at fault for setting bad digital strategy, then who is? Who is leading digital transformation in most organizations?
In most organizations, you can’t blame anyone specific for strategic digital transformation failure because it appears no one is actually setting the strategy for, and leading, their organization’s digital transformation. Only 21% of organizations have devised and implemented strategically coordinated, cross-functional digital initiatives.
And the creation of dedicated digital offices doesn’t appear to help. Organizations now face a crisis of having appointed digital figureheads, committees, and action groups that look decisive, but don’t produce real change in their organizations. Some businesses seem to have learned this already. Despite early enthusiasm for dedicated Chief Digital Officers—including rapid hiring and predictions CDOs would replace 60% of CIOs by 2020—hiring for this position has already terminally slowed.
No one from the business appears to be stepping up—or appears to believe they are capable of stepping up, to lead their digital transformations.
Fewer than 40% of companies feel their business leaders are capable of leading their digital transformation or deriving value from the new technologies. If anyone in the business appears to be stepping up, it’s the CMO. But, as explained in Computerworld, the CMO lacks the cross-functional view of the business to deliver effective, strategic digital transformation, as “the scope of digital will inevitably extend well beyond their remit and into functions such as research and development and supply chain.”
The only function within the organization that has this cross-functional view required to stitch together a full, comprehensive digital strategy is, ironically enough, the primary scapegoat for digital transformation failure—IT. When pressed, 59% of non-IT executives agree that the greatest chance for success in digital initiatives comes when IT and non-IT functions collaborate on their digital transformation.
But we would take this thought one step further. IT is not just a necessary collaborator on digital transformation strategy. IT is the only function that has the technological expertise and cross-functional perspective required to develop an effective digital strategy.
And until IT is given the chance to do so, the business can’t credibly blame their organization’s digital transformation failures on the function charged with implementing and operating a strategy that they did not write, and that never had a chance at success.
Learn more about how to take charge of your organization’s digital strategy by clicking here.