Prepare Your Business For The Digital Future - New Forrester Study
In February 2016 we commissioned a study with Forrester, Prepare Your Business for the Digital Future which set out to explore the key learnings and best practice from the companies considered to be digital experts. So what did we find?
It revealed that digital is a priority for businesses - 81% of organisations have a digital strategy in place and almost three-quarters (74%) believe they have defined processes, the right structure and skills to deliver digital projects. However more than a third (36%) admit they cannot measure the business impact and benefits of digital investment and only 11% are digital experts - the majority (57%) are classified as laggards hindered by weak strategies and lacking the ability to execute.
So are businesses wasting investment in this area by not having a way to measure the impact of digital?
Neil Stewart, CEO of Salmon, comments: “Digital transformation can open up new revenue streams, improve operational efficiency and help organisations deliver new services. Digital is not a new phenomenon. However, embarking on digital projects can bring challenges – from unified decision-making to ensuring the right in-house skills are in place. This study shows that the problem is two-fold – most businesses not only invest without the right strategy but their ability to execute is poor. This is a huge problem and it must be addressed. Businesses need help to digitally transform and all in the industry, from vendors to governments, must act now.”
Looking at the top challenges organisations faced, those identified were:
- A lack of funds allocated to digital strategy (49%),
- Conflicting KPIs from across the business (38%),
- Poor integration with legacy systems (33%)
- Poor execution on past projects impacting the digital team’s credibility (27%).
In response to the study, here are the three actions we believe all businesses should undertake to kick-start their digital transformation – taking them from laggard to expert:
1. Focus digital transformation on the customer: the study revealed that the experts approached digital with customer impact in mind, focused on generating new revenue, attracting new customers and launching into new markets. By contrast, laggards focus on internal processes and cost reduction. All businesses should take an outward-looking approach - first decide what their digital customer experience will be and build their strategy from there.
2. Unite the business to drive digital: digital transformation cannot sit with one team. Instead, organisations should assess digital requirements from across the business and set objectives accordingly. They should bring together cross-functional digital talent and break away from legacy ways of operating. A digital Centre of Excellence combining business, customer experience, and technology expertise is a great start.
3. Find the right funding model: the study revealed that digital experts set clearly defined and articulated KPIs not only targeted at revenue. Across the business, metrics such as customer lifetime value and employee satisfaction are just as important as increases in revenue. Digital experts also developed their digital strategies with the involvement of finance department to establish a clear funding model early on.
The study was carried out by Forrester Consulting, an independent technology and market research company. It surveyed 150 IT and business decision-makers from the retail, consumer packaged good (CPG), and business-to-business (B2B) industries. The study was carried out across the UK, US, Germany and Benelux.