MITEDU R E S E A R C H R E P O R T E M B R A C I N G D I G I TA L T E C H N O L

Mitedu r e s e a r c h r e p o r t e m b r a c i n g

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R E S E A R C H R E P O R T E M B R A C I N G D I G I TA L T E C H N O L O G Yning the technology landscape and explaining it to the rest of the management team to say, gang, this is the cloud; it’s actually a big deal. Inertia and compla-cency are deadly in the world that we live in today.”It’s hard not to get complacent, said Stevenson, Intel’s CIO. “They’ve gone through ERP, they’ve gone through BYO, and they’ve gone through cloud, and they think they’ve done it all. But the reality is, we’re only at the very, very beginning of this next generation of computing, and I think that every in-dustry leader will be the ones that transform first. I don’t care what industry you’re talking about.”Similar attitudes came up in the survey, where barriers like “information overload,” “the human capacity for implementation” and the need to “bal-ance between conveniences, speed and superficiality of digital tools and human-brain thinking pro-cesses” were cited. Andrew McAfee, principal researcher at the Cen-ter for Digital Business, told us in an interview that “[the] vexing thing about innovation and disrup-tion is, they don’t stop once you do it.” Neither will competitors. Companies have to develop a continu-ous process for digital innovation. Politics Internal power centers, controlled by de-partments or individuals, can inhibit changes that dictate less power or different ways of working. More than 20% of respondents said that internal politics, including fear of losing power in the orga-nization, impeded adoption of digital technology (see Figure 7).Many companies work to limit the power of a single individual or department — 60% of compa-nies, in fact, report using one of several governance mechanisms to manage and foster their digital in-vestments. Cross-functional steering committees are the most popular, the choice at 19% of respon-dents’ organizations. Other approaches include specific digital leadership in individual business units (15%) and cross-functional innovation groups (14%). Only 13% have adopted the much-hyped position of chief digital officer (CDO).This diverse set of approaches shows that com-panies can follow many paths to structuring their digital transformation efforts. But it also creates problems for companies. There is enough resistance from organizational and cultural factors that not having clear structures makes it risky for workers to push for digital transformation. EXECUTING THE CHANGEAmong the obvious obstacles to digital trans-formation is lack of clarity about the pay-off. Companies want to know that they are getting something beneficial from investment in new tech-nologies. Corporate leaders need to leverage metrics to help make digital transformation happen.
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  • Fall '12
  • MIT Sloan School of Management, Massachusetts Institute of Technology, Sloan Management Review, mit sloan management, digital transformation

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