ABOUT THE RESEARCH Introduction Digital Transformation Isnt Really About

About the research introduction digital

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ABOUT THE RESEARCH Introduction: Digital Transformation Isn’t Really About Technology
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STRATEGY, NOT TECHNOLOGY, DRIVES DIGITAL TRANSFORMATION MIT SLOAN MANAGEMENT REVIEW 5 cloud — doesn’t lie in the technologies individually. Instead, it stems from how companies integrate them to transform their businesses and how they work. Another key finding: What separates digital lea ders from the rest is a clear digital strategy combined with a culture and leadership poised to drive the transforma- tion. The history of technological advance in business is littered with examples of companies focusing on tech- nologies without investing in organizational capabilities that ensure their impact. In many companies, the failed imple mentation of enterprise resource planning and previous generations of knowledge management sys- tems are classic examples of expectations falling short because organizations didn’t change mindsets and pro- cesses or build cultures that fostered change. Our report last year on social business found similar shortcomings standing in the way of technology reaching its potential. 2 Our findings this year are based on an assessment of digital business maturity and how maturing organi- zations differ from others. To assess maturity, we asked respondents to “imagine an ideal organization trans- formed by digital technologies and capabilities that improve processes, engage talent across the organiza- tion and drive new value-generating business models.” (See “About the Research,” page 4.) We then asked them to rate their company against that ideal on a scale of 1 to 10. Three groups emerged: “early” (26%), “de- veloping” (45%) and “maturing” (29%). (See Figure 1.) Although we found some differences in technology use between different levels of maturity, we found that as organizations mature, they develop the four tech- nologies (social, mobile, analytics and cloud) in near equal measure. The greatest differences between levels of maturity lie in the business aspects of the organiza- tion. Digitally maturing companies, for example, are more than five times more likely to have a clear digital strategy than are companies in early stages. Digitally maturing organizations are also much more likely to have collaborative cultures that encourage risk taking. Several obstacles stand in the way of digital maturity; lack of strategy and competing priorities lead the list of speed bumps. Lack of a digital strategy is the big- gest barrier to digital maturity for companies in the early stages, according to more than 50% of respon- dents from early-stage organizations. As companies move up the maturity curve, competing priorities and concerns over digital security become the pri- mary obstacles. (See Figure 2.) Across the board, respondents agree that the digital age is upon us: Fully 76% of respondents say that digital technologies are important to their organi- zations today, and 92% say they will be important three years from now. In this year’s report, which is
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  • Fall '14
  • Goulding,Richard
  • The Land, Sloan Management Review, MIT Sloan Management Review, mit sloan management

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