Sergey Nivens - Fotolia
In 2016, we talked at length about the importance of digital transformation. Specifically, what areas need to change within different parts of an organization, what problems we aim to solve with these changes, and the breadth and depth of the change that needs to occur. A digital transformation roadmap is not just about changing technologies, but executing changes across teams, roles, systems business processes and, indeed, across the entire company culture.
Like most companies, your organization likely touts some level of digital strategy, but it still may not be a key objective for your department heads and C-level executives. As your company plans for 2017 and beyond, it's your job as a stakeholder in your company's future to help reinforce the importance of a new digital transformation roadmap. To help you make the argument, here are four research-supported reasons to prioritize digital transformation in 2017.
Digital transformation has been proven to turn a profit
Your top argument to C-suite executives should be the impact to their bottom line. Compared with those who do not, research from Capgemini Consulting suggests that companies that execute holistic digital transformation can see 26% higher profit margins and 12% higher total valuations. Product companies should specifically take note of the cost-saving benefits of lean delivery processes, such as Agile, DevOps and BizDevOps. Such lean approaches produce 200 times faster deployments and 30 times more frequent deployments, compared with more traditional methods, according to a presentation at the DevOps Enterprise Forum in 2015. Also, companies embracing more modern BizDevOps approaches are 200% more likely to push beyond their market share and profitability goals and see 50% improvement in long-term market cap growth.
Your competitors are already doing it (or planning to)
It's likely that a digital initiative of some sort is already a high priority for one or more of your competitors. Consider that two years ago, 67% of chief marketing officers (CMOs) already said tech disruptions caused them to drastically change strategy, according to a study done by IBM.
Also, in a 2016 study from Deloitte, "complete organizational redesign" was cited as a top objective by 92% of corporate leaders. To that end, 83% of large companies are planning or beginning to plan a digital transformation roadmap in 2016. While digital-centric business operations currently represent 18% of revenue, that number is predicted to grow to 43% in less than a decade, according to Gartner.
Companies must change or die
It goes without saying that today's digital-first startups will be tomorrow's giants. Gartner predicts that 75% of the companies currently listed on the S&P 500 will be replaced by 2027. In fact, between 2000 and 2014, 52% of Fortune 500 companies went bankrupt, were acquired or otherwise folded, according to Forbes, and Gartner said one in four businesses will lose competitive ranking due to "digital incompetence."
Your digital advantage is big data
Knowledge is power in the digital age. Last year, Gartner reported the advanced analytics market grew 14% to $1.5 billion. Still, far too few truly take advantage of the potential insights provided by big data. In 2014, a staggering 50% of CMOs did not use business intelligence or big data analytics to guide strategic decisions. Thus, it should be no surprise that 72% surveyed by the American Institute of CPAs last year said that not getting information and insights to the right people was the downfall of "at least one" major project.
While many have not yet implemented strong analytics solutions, most executives rate big data as critical for their organization, according to Accenture. This is because big data has been proven to dramatically reduce computing, storage and bandwidth costs year over year -- a cost savings of 25% to 50% alone from cloud computing solutions, according to a recent paper from the World Economic Forum. In 2017, the ability to harness big data for strategic planning, decision-making and cost savings remains a key advantage over your competitors.
Increasing profitability, identifying marketplace competition and building competitive advantages are keys to the success of any organization. Research strongly suggests initiatives toward a digital transformation roadmap are more than just hype; they have the potential to pivot a company's processes, technology and culture toward a more successful future.
Why digital transformation has to be a step-by-step process
Where security and digital transformation meet
How the UK government is trying to stretch the boundaries of digital transformation