HBR Analytic Services survey sheds light on the state of digital transformation

Plenty of companies are either in the midst of, or preparing for, big changes in the way they operate so they can succeed in the digital economy. The changes aren’t for the faint-hearted. They require modernized IT infrastructures and advanced technologies, stalwart leadership, new organisational structures and a flexible approach. So, how do organisations get there? A new report by Harvard Business Review Analytic Services, sponsored by DXC Technology, has answers.

The report, “Winning Through Change in the Digital Economy,” based on a survey of 376 business leaders from a variety of industries around the world, takes a close look at their digital readiness and offers guidance for organisations as they develop and enact strategies to capitalize on the digital economy. Respondents were drawn from the HBR audience of readers and represented companies that have revenues of $500 million or more.

Digital wake-up call

A little less than a third (29%) of those surveyed are from organisations that are very digital, meaning that more than half of the products, operations and business models in that organisation depend on the ability to exploit digital information and technologies. Slightly more (32%) are not very digital, with less than a quarter of their products, operations and business models exploiting digital. The remaining (39%) are moderately digital.

These numbers are a wake-up call. So are the respondents’ views on whether their IT organisation is capable of executing a digital agenda. Only 18% said their IT organisation is extremely capable, while 46% reported moderately capable. An alarming 36% said their internal IT organisation is not at all capable of executing a digital agenda.

For many organisations this has meant a rethink of how they are structured to deliver new services. In some cases a Chief Digital Officer is appointed outside of the IT function, and in other cases there has been a fundamental rethink of how their IT organisation is structured under the CIO. Increased process ownership, consumption-based pricing models, and increased engineering, devops and microservice capabilities are prevalent, especially within business units. All told, we are witnessing a renaissance in the organisation.

Digital opportunity

The opportunity for the IT services world is to help these customers land these new services by partnering with them in a new and more relevant way. Minimum viable product and proofs of concept that can rapidly scale are being built in conjunction with the business, leveraging the rich set of capabilities that the public infrastructure has to offer. All of this is being done at price points significantly reduced from the previous generation of IT services.

Of course, business success is best measured by positive financial impact. The very digital are apparently already reaping rewards. More than half (55%) of the very digital companies in the survey say they have experienced a significantly positive impact on financial performance. Conversely, 39 percent of the not very digital organisations say they’ve experienced no, or somewhat negative, impact from their digital efforts.

Winning in the digital economy takes hard work and a commitment to change in IT systems, strategy, organisational structure, business operations and culture.


Richard Davies is vice president of strategic advisory services at DXC Technology and managing director of DXC’s Leading Edge Forum. At LEF, Richard leads and manages a global cross-industry think tank dedicated to helping large organisations reimagine their organisations and leadership for a technology-driven future.  He is also responsible in DXC for helping major global clients transform to take advantage of future-state business platforms. @DaviesDickie 

RELATED LINKS

Winning Through Change in the Digital Economy

The Renaissance of the IT Organization

6 technology trends for 2018: Guideposts for digital transformation

 

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