Digital transformation: Key goals and leaders
According to Innosight research, the average company tenure on the S&P 500 Index in 1977 was 37 years. By 2027, it’s forecasted to be just 12. At the current churn rate, about half of the companies now on the S&P 500 will be replaced over the next ten years. Digital Darwinism is steadily accelerating.
'52% of the Fortune 500 have been merged, acquired, have gone bankrupt, or fallen off the list since 2000', notes Constellation Research Founder and Disrupting Digital Business author Ray Wang in a recent webcast. 'That is an amazing stat when you think about the level of disruption that’s happening inside lots of organizations'.
Wang notes that digital leaders are now creating not just a digital divide, but a winner-take-all market. Overall, digital leaders now take up to 69.8% of market share, versus 30% for everyone else. And in percentage of profits, they lead with 77.1% versus 22.9% for everyone else. 'Using data-driven business models, they are able to create an unfair advantage, and it’s happening in every single marketing and every single industry', says the analyst and author.
In Constellation Research’s latest digital transformation study, 68% of businesses with digital transformation projects are now seeing a positive ROI. Goals widely shared by these businesses include:
- Reaching and engaging with customers more effectively
- Building a competitive advantage in their current market
- Implementing new, data-driven business models
- Increasing revenue
- Modernizing legacy IT and reducing costs
- Improving agility
- Faster innovation cycles
- Improving the employee experience
- Greater transparency
Who's leading the digital transformation charge?
In 33% of organizations, notes Constellation’s survey, it’s the CIO who’s leading digital transformation initiatives. In 23% of organizations, it’s the CEO. In 20% of organizations, it’s the CDO (being chief digital or chief data officers). And depending upon who’s leading, the digital transformation priorities for the business may be different.
When a CIO leads, their top three priorities tend to be:
- Building a competitive advantage (38%)
- Modernizing legacy IT and reducing costs (38%)
- Implementing data-driven business models (33%)
When a CEO leads, their top three priorities are:
- Engaging with customers more effectively (57%)
- Building a competitive advantage (50%)
- Increasing revenue (43%)
For CDOs (chief digital or chief data officers), the top priorities are also different, with:
- Implementing data-driven business models and engaging in faster innovation cycles tied for first place (50%)
- Engaging with customers more effectively, modernizing legacy IT, and reducing costs tied for second (43%)
No matter who leads your organization's digital transformation, it is obvious that businesses trnsforming digitally and data-driven are having a competitive edge in the present and future. When taking on the process of digital transformation for your business, make sure to align your data strategy with company goals and primary processes. Choosing the right person to lead this process is key to a successful transformation.
Author: Tricia Morris