Altimeter's State of Digital Transformation 2019
Now in its fifth year, our annual "State of Digital Transformation" research continues to document the constantly evolving enterprise. As disruptive technologies and their impact on organizations and markets continue to progress, our research aims to capture the shifts and trends that are shaping modern digital transformation.
Digital is an enterprise-wide strategic priority — but there’s work to be done
In 2019, strategic digital transformation is only becoming more pervasive moving beyond IT to impact competitiveness throughout the organization. Budgets are soaring. The list of disruptive technologies on the radar of stakeholders is expanding. Ownership is moving to the C-Suite and managed by cross-functional, collaborative groups. Customer experience (CX) continues to lead digital transformation investments, but as we observed in 2017, employee experience and organizational culture are also rising in importance to empower and accelerate change, growth, and innovation.
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The Next Chapter of Digital Transformation in China
Our study revealed that there are significant differences between how companies in China and the rest of the world approach digital transformation.
Over the past decade, China's growth and technology transformation has been led and fueled by BAT (Baidu, Alibaba, Tencent). We are now entering the next chapter of digital transformation where businesses and brands must adapt and lead their own digital transformation to survive, compete and thrive.
In China's unique digital ecosystem, almost all companies are undergoing digital transformations. Compared to other countries in the world, Chinese enterprises embrace digital transformation in a more proactive way—with CEOs playing a bigger role in leadingthe efforts. Additionally, companies in China prioritize consumer-facing touchpoints, such as customer experience and e-commerce, to a significantly higher degree in their digital transformation.
It is worth noting that having a strong organizational culture is instrumental to sustainable growth. However, companies in China are overwhelmingly more concerned with ROI than internal initiatives like organizational structure and employee engagement. Little do they know that this might have a negative impact on their digital transformation efforts in the long term.
Stay tuned for an in-depth analysis of how companies approach digital transformation in China.
Digital Transformation as an Enterprise-Wide Movement
This year, it's clear that digital transformation is maturing into an enterprise-wide movement. Digital transformation is modernizing how companies work and compete and helping them effectively adapt and grow in an evolving digital economy.
What's also evident is that there is still much work to do as companies are, by and large, prioritizing technology over grasping the disruptive trends that are influencing markets and, more specifically, customer and employee behaviors and expectations.
The State of Digital Transformation:
5 Key Takeaways
1. A successful digital transformation is an enterprise-wide effort that is best served by a leader with broad organizational purview. For the second year in a row, CIOs are reported as most often owning or sponsoring digital transformation initiatives (28%), with CEOs increasingly playing a leadership role (23%).
2. Market pressures are the leading drivers of digital transformation as most efforts are spurred by growth opportunities (51%) and increased competitive pressure (41%). With high-profile data breach scandals making daily headlines, new regulatory standards like GDPR are also providing impetus for organizations to transform (38%).
3. While there is a growing acknowledgment of the importance of human factors in digital transformation – like employee experience and organizational culture – most transformation efforts continue to focus on modernizing customer touchpoints (54%) and enabling infrastructure (45%). But many organizations are not doing their due diligence when it comes to understanding their customers, with 41% of companies making investments in digital transformation without the guidance of thorough customer research.
4. Organizational buy-in remains a top challenge for those leading digital transformation. The companies we studied report digital transformation is still often perceived as a cost center (28%), and data to prove ROI is hard to come by (29%). Cultural issues also pose notable difficulty, with entrenched viewpoints, resistance to change (26%), and legal and compliance concerns (26%) stymieing progress.
5. Innovation is staking its claim within the organization. Nearly half of respondents report that they are building a culture of innovation, with in-house innovation teams becoming the norm.
What are the key digital transformation trends across the globe? And how can your company lead the game?
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About Altimeter
Altimeter, a Prophet company, provides independent research and strategy consulting on disruptive technology trends. Altimeter helps leaders thrive with disruptive technologies through our research and advisory work. Contact us to learn more about how Altimeter can help your organization thrive in the face of change.