The 2016 State of Digital Transformation

Digital Darwinism continues to impact businesses as technology and societies evolve. As a result, organizations are moving away from “business as usual” as they pursue digital transformation to compete. Today, companies are undergoing varying extents of modernization through "the six stages of digital transformation," with systems, models, processes, and architectures advancing along the way.

In the second edition of our “State of Digital transformation” research, we set out to learn how companies are changing and the challenges and opportunities they face while doing so. The data and insights in this report are based on the input of more than 500 digital transformation strategists and executives who are leading change within their organizations. This year, we are seeing companies evolve, with some changing faster and deeper than others. But, what’s most clear is, two years after our previous industry overview in 2014, companies are still facing signi cant challenges to operate in a digital economy. 

This time around, we learned that efforts in customer experience often serve as the heart and soul of digital transformation, as we also saw in 2014. At the same time, many organizations continue to wrestle with the balance of technology and organizational priorities to de ne a collaborative and productive path toward change. In many ways, IT remains in uential in driving digital transformation. As a result, companies are still prioritizing technology ahead of customer-centricity and investing in front- and back-of ce solutions without a clear understanding of customer expectations, preferences, or values. 

But, focusing on customer experience (CX) through the lens of technology has its limitations. For example, in 2014 we found that 88% of companies were undergoing digital transformation as a means to improve CX, but only 25% had mapped their customer journeys.

In 2016, companies are making progress, but customer-centricity still appears to be more about words than actions. Although CX remains a top driver of digital transformation, only half of the companies we studied have mapped or are mapping the customer journey. While CX mapping is becoming more prominent, it still must gain greater traction to counterbalance (and give purpose to) investments in technology roadmaps. 

We also found that innovation has also become a key priority in digital transformation efforts. This trend is rapidly gaining momentum as companies look to the startup ecosystem as a means to innovate and tap into the new expertise and talent often missing from more traditional organizations. 

TL;DR

Here are some of the highlights...also, you can download the entire report here:

The top three digital transformation initiatives at organizations today are, 1) accelerating innovation (81%); 2) modernized IT infrastructure with increased agility, flexibility, management, and security (80%); and 3) improving operational agility to more rapidly adapt to change (79%).

CMOs vs. CIOs: Digital transformation is largely led by the CMO (34%) not the CIO/CTO (19%).   

Customer-centricity? 55% of those responsible for digital transformation cite “evolving customer behaviors and preferences” as the primary catalyst for change. At the same time, the number one challenge facing executives (71%) is understanding behavior or impact of the new customer.  Yet, only half (54%) of survey respondents have completely mapped out the customer journey. This means that many companies are changing without true customer-centricity. What's more, mobile is still not getting enough respect. A mere 20% of leaders surveyed are studying the mobile customer journey/behavior. 

Innovation tops digital transformation initiatives at companies today. 81% said it was at the top of their agenda, 46% stated their company has launched a formal “innovation center.” Right behind innovation was modernizing IT infrastructure (80%) and improving operational agility (79%). 

This is just the beginning of the insights we surfaced. The report goes to greater depths that I hope will help you. What we learn time and time again, is that digital transformation is complex, bigger than any one stakeholder group, and more important than any one area of focus. Even though it's becoming an increasing priority, digital transformation has to have a vision and purpose that goes beyond digital. This is really about business transformation and changing how and why we work to compete in an era when customers and employees are evolving faster than the philosophies, operations and digital literacy governing business today.

Please download the report and share your thoughts.

Brian Solis is the author of X: Where Business Meets Design. Follow him on Twitter and LinkedIn. Invite him to speak at your next event or meeting.