This article is the third (and last) 3-part series about Digital Transformation Models and Frameworks. In Part-3, I illuminate the importance and benefits of adopting a Unified Digital Transformation Framework. Also, I elucidated how to choose the proper digital transformation framework. Part-3 also highlights more than 80 facts and statistics about different aspects of Digital Transformation worldwide. Should you need more reading sources, I listed the majority of the references I unfolded in all three articles at the end of this article.
In Part-2, I shed light and examined 20 Digital Transformation Models and Frameworks published by top IT services providers, DX consulting companies, and a few noteworthy digital transformation research, executive education, advisory experts, and organizations. Part-2 also accentuated the consulting services fatigue phenomenon that consulting firms and digital services providers face and contribute to the low percentage of digital transformation success.
Part-1 focused on the importance of Change Management as an essential business sub-domain for any enterprise’s Digital Transformation initiative.
The Benefits of a Unified Digital Transformation Framework
Why we need a unified framework for Digital Transformation? A Unified Digital Transformation Framework (UDX Framework) gives decision-makers principal and righthand starting points like any framework or model. Regardless of the industry, the size of the organization, and the current/existing capabilities, the UDX framework should provide structured guidelines, logs of the available capabilities, required capabilities to be acquired, requirements to be implemented, and the sequence in which what needs to be accomplished and should be done.
In a broader spectrum, the UDX framework should challenge the inside-out business capabilities (not only people capabilities), which is becoming necessary to achieve a successful transformation journey.
Nevertheless, UDX framework shouldn’t be prescriptive. Instead, the UDX-framework’s author(s) should invite the user to hack and mod the framework, to suit the enterprise’s circumstances.
The UDX framework shows different levels of people at the organization how to collaborate to make digital change possible. UDX framework key benefits are:
- A credible starting point,
- It helps imagine the big picture, ideal for executives and implementers,
- Illuminate the weaknesses of the internal overall business capabilities,
- Deep-dive to a set of actions, tasks, and logical sequences,
- Transform the organization’s front, mid, and back-of-office,
- Tailor to suit the enterprise’s circumstances.
Characteristics of a Unified Digital Transformation Framework
- provides a platform to guide an organization through not only the industry 4.0 wave but also through a disruptive business, hence innovative and sustainable transformation,
- supports organizations’ transformation in cross-industry and not concentrating on a specific industry,
- ensures that no areas of the business are misheard or left behind in the transformation process,
- provides a structured methodology to create tangible benchmarks, meaningful measuring metrics and, evident signs of success, progress, and areas where more attention is obligatory,
- supports organizations avoid the pitfalls mentioned above,
- helps organizations in demonstrating a structured roadmap to success – thus, it should work as a transformational central point of success,
- supports organizations in providing an agreed business-wide approach so that employees, operational managers, and executives don’t wander away from goals during agile evolving business environments,
- And the most important thing is its adaptability.
Choosing the Proper Digital Transformation Framework for your Organization
The right digital framework is not what a consulting firm or a digital transformation technology provider, or a digital transformation services provider will dictate on your organization. It is the one that is adaptable to your organization yet can be phased into logical, cohesive phases that will show tangible values and progress.
The initial phases ensure the organization knows what it is doing and why it needs to do it. The following phases are about execution and ongoing operational setting:
1. Transformation Realization Phase:
Vision: The need to have a clear vision of the future for the organization, its employees, its customers and, the overall marketplace in which it operates.
Why: The organization needs to define why it needs to transform that all employees can embrace; also, a belief that means something to customers.
How: The organization needs to leverage internal insights and knowledge to determine the anticipated transformational future state.
2. Transformation Strategy Phase
Leadership: The importance and scale of a digital transformation are so pressing that a single executive (CDO vs. CIO) is usually appointed to lead the digital transformation, with the full support of the Board, CEO, and the rest of the leadership team.
Strategy: Should include complete market, legislative, regulatory, and competitor insights. Should provide a detailed capabilities assessment of the current state, anticipated future state, need to acquire external capabilities. Should detail metrics that determine when success has been recognized and achieved at each step, what will be done differently, and how (mindset) it will happen. How it will happen is more important than what will happen. These are two of the most vital factors in a digital transformation strategy.
Roadmap: Should define the steps to progress through the digital transformation is established, with the familiarity that it will alter and adjust as required.
3. Transformation Commencement Phase
Communication. The single most effective component of any digital transformation framework is that it should provide the organization with one unifying corporate digital language.
Work Streams. Distinct workstreams for each of the business core domains of the organization should be affirmed for: customers, processes, people, services, products, and technology.
Culture-centric. A devoted, predominant corporate program that ensures the organizational culture evolves and adapts to the transformational changes. It is essential to dedicate corporate communication, awareness sessions, workshops, and other initiatives to put the change processes, outcomes, and progress in perspective for all stakeholders at all organizational levels.
4. Transformation Sanitizing Phase
Appraise. Constant assessment of the metrics to determine advancement towards the future state should be undertaken. This informs the Board and Leadership teams and forms the foundation of the transformational culture and communications program.
Benchmarks. Establishing new benchmarks begins at the start of the transformation program. New business habits of performing things cannot be measured effectively against the old (outdated) methods.
Axles. When a change from the initial transformation plan and framework is required, pivots occur. These are informed by the assessment and benchmarking processes. The transformation aims to progress toward the future state, and changes in direction without changing the end goal might be obligatory.
Three Things to Avoid when Transforming
The three most common vital faults that organizations commission a digital transformation are enough to disrupt the program. While any of these three mistakes can occur at any time, they are all interconnected:
- Focusing only on digital technology.The most common mistake is that organizations focus on a transformation disruptive digital technology component of a framework. This is often done because it is the most widely common and understood trigger for commencing the digital program of work. While digital technology is a vital component, overlooking the other workstreams in the Initiate phase will derail the transformation rapidly.
- Creating silos.Working in silos is the enemy of digital transformation. If all work streams are not collaborating, the digital program will fail. Working in silos is a vital sign of failure. Working in silos means digital understandings are not shared, duplication will occur, and progress will diminish. Silos commonly emerge due to people or teams trying to control and manage their assignments through a period of dramatic change. It is a common and natural human response to being overwhelmed and fearing a new and uncertain future; the unknown. The resolution is to ensure that there are regular and clear communication awareness/workshops at all levels of the organization. Yet ultimately, working in a collaborative environment is one of the desired outcomes of any unified digital transformation framework.
- Invest-less in culture change. Even if every digital program’s workstream is working collaboratively toward a common corporate goal and digital technology is not the only focus, an organization’s digital transformation can fade if there isn’t an adequate investment in the corporate cultural change stream of the digital transformation framework. An organization is made up of its people; if they are not kept informed throughout the transformation – of all the good, the bad, and the ugly – the digital program will not succeed. Investing in the culture and hence in the internal corporate communication stream is vital to the organization riding the ups and downs of the digital turbulence.
80+ Vital Digital Transformation Facts and Stats – 2020/2021
Statistics speak louder than words. To help illustrate how several consultancy and numerous researchers reports reveal the importance of digital transformation.
The need for digital technologies and the customers’ demands are constantly changing. There is plenty of global research to find out the statistics of digital transformation.
The best way to appreciate digital transformation (DX) is to realize the facts & stats about it to be understood. Facts & stats prompt themselves as key performance indicators and explain how essential DX is to every organization.
The comprehensive, collected list of digital transformation facts & stats below comes from authoritative sources such as Forrester, Gartner, McKinsey, etc. These can help organizations better understand the rationale for DX investment, the DX benefits, the vital challenges expected during the DX journey, assess the digitalization needs, start taking action and stay ahead of the competition.
(A) Digital Transformation Business Adoption (Strategy & Roadmap)
- Fact/Stat-1: 27% of companies say digital transformation is a matter of survival – Digital Marketing Institute.
- Fact/Stat-2: 70% of large-scale transformation programs fail – McKinsey.
- Fact/Stat-3: A survey of employees found the most common obstacle for digital transformation was the CEO at 35% – Futurum.
- Fact/Stat-4: 28% of companies report digital transformation is still often perceived as a cost center (28%) – Prophet.
- Fact/Stat-5: More than 50% of digital transformation efforts fizzled completely in 2018 – Forrester.
- Fact/Stat-6: Employees at companies with less than 100 employees are nearly three times more likely to say their digital transformation was a success than employees at companies with more than 50,000 employees – McKinsey.
- Fact/Stat-7: Only 15% of companies prioritized digital transformation – Forrester.
- Fact/Stat-8: Just 16% of executives say their company’s digital transformation efforts are succeeding – McKinsey.
- Fact/Stat-9: Organizations deploying a step-by-step approach to digital transformation, i.e., having one foot in the existing business model while trying a new one, have reported only a 16% progress toward business change objectives, despite having worked toward business model transformation for 12 months – Gartner.
- Fact/Stat-10: 52% of companies plan to cut or defer investments because of COVID-19; just 9% will make those cuts in digital transformation – PwC.
- Fact/Stat-11: Only 22% of industrial companies achieved a return on their digital investments that exceeded expectations – Accenture.
- Fact/Stat-12: 72% of strategists say their company’s digital efforts are missing revenue expectations – Gartner.
- Fact/Stat-13: 21% of companies believe they’ve completed their digital transformation – Forrester.
(B) Digital Transformation Value
- Fact/Stat-14: Only 40% of organizations have brought digital initiatives to scale – Gartner.
- Fact/Stat-15: 87% of companies think digital will disrupt their industry, but only 44% are prepared for potential digital disruption – Deloitte.
- Fact/Stat-16: Among technological changes implemented by businesses during the pandemic, 93% of companies surveyed said they had to shift to remote work, 62% said they had to deal with increasing customer demand for online purchase and services, and 34% said there was an increase in migration of their company’s assets to the cloud – McKinsey.
(C) Digital Transformation Customer Centricity
- Fact/Stat-17: 32% of customers would stop interacting with a brand they loved after one bad experience – PwC.
- Fact/Stat-18: 57% of customers are uncomfortable with how companies use their personal or business information – Salesforce.
- Fact/Stat-19: 89% of customers get frustrated when they have to repeat their questions to multiple customer service agents – Accenture.
- Fact/Stat-20: Only 37% of IT initiatives by companies worldwide are focused on improving customer experience – Flexera.
- Fact/Stat-21: Just 19% of companies have a customer experience team that helps bridge gaps in the business – Genesys.
(D) Digital Transformation Business Optimization & Collaboration
- Fact/Stat-22: 70% of digital transformations fail, most often due to resistance from employees – McKinsey.
- Fact/Stat-23: lack of Change Management capability (common pitfalls are: resistance to changing culture, lack of leadership, poor cross-functional collaboration) – McKinsey.
- Fact/Stat-24: Among the skills needed to support digital transformation, technology integration, and implementation to the list at 49% – CIO.
- Fact/Stat-25: 37% of CEO or board of directors and 32% of the senior executive team (C-suite other than CEO), while 18% of middle managers and less than 11% of line employees are holding back companies’ digital transformation initiatives – Futurum Survey.
- Fact/Stat-26: Employee pushback and lack of expertise to lead digitization initiatives are the top two barriers to digital transformation (1. Employee Pushback 2. Lack of Expertise to Lead Digitization Initiatives 3. Organizational Structure 4. Lack of Overall Digitization Strategy 5. Limited Budget) – Jabil.
- Fact/Stat-27: 76% of executives agree that organizations need to dramatically reengineer the experiences that bring technology and people together in a more human-centric manner – Accenture.
- Fact/Stat-28: 63% rank culture challenges as the biggest impediments to transformation efforts – Harvard Business Review Analytic Service (700 global DX leaders surveyed).
- Fact/Stat-29: Only 16% of employees said their company’s digital transformations have improved performance and are sustainable in the long term – McKinsey.
- Fact/Stat-30: By overcoming an organization’s alignment challenges – lack of alignment between top and middle management on the definition of digital value, on the right ways to leverage talent, on the inadequacies in technology architecture, on the assets and ecosystems –companies can unlock the most value with a chance of almost doubling their returns on digital investment (RODI) – Accenture.
- Fact/Stat-31: Some 19% are in the integration process of making operational and technology changes throughout the enterprise, and 18% are executing their digital plans and making process, operational and technology changes on a department and business unit level – Clickz.
- Fact/Stat-32: 44% of workers aged between 16 and 74 in Europe do not have basic digital skills – European Commission.
(E) Digital Transformation Technologies
- Fact/Stat-33: Most companies are using technology to modernize their existing business model instead of transforming it head to toe – Forrester.
- Fact/Stat-34: 45% of Executives don’t think their company has the right technology to implement a digital transformation – PwC & AIMultiple.
- Fact/Stat-35: 61% of consumers won’t return to a mobile site that had trouble accessing – Forbes.
- Fact/Stat-36: A global study of more than 600 respondents across the US, UK, Germany, Netherlands, Australia, Singapore, and China has found that integration of digital technologies across fast-growing organizations remains incredibly difficult and a key challenge. Data, apps, and even entire teams can remain siloed – MuleSoft.
- Fact/Stat-37: The average number of apps used in global organizations is around 900, but the percentage of those being integrated has stalled at just 29%. IT infrastructure is frequently to blame for these integration issues (2018/2019) – Clickz.
- Fact/Stat-38: Less than 30% of the organizations’ technology vendors are currently active partners in their digital transformation initiatives, although partnering with vendors is one of the best practices to avoid failure – Aimultiple.
- Fact/Stat-39: As of 2020, 30% of companies are still considered laggards in technology adoption and innovation – Accenture.
(A) Digital Transformation Business Adoption (Strategy & Roadmap)
- Fact/Stat-40: Companies with a Digital-first strategy are 64% more likely to achieve their business goals than their peers – Adobe.
- Fact/Stat-41: 87% of senior business leaders say digitalization is a priority – Gartner.
- Fact/Stat-42: By 2024, 25% of CIOs at large enterprises will become accountable for digital business operational results, or “COO by proxy” – Gartner.
- Fact/Stat-43: CIOs are reported as most often owning or sponsoring digital transformation initiatives (28%), with CEOs increasingly playing a leadership role (23%) – Prophet.
- Fact/Stat-44: Companies with an engaged Chief Digital Officer are 1.6 times more likely to report a successful digital transformation – McKinsey & AIMultiple.
- Fact/Stat-45: 89% of enterprises are planning to adopt or have already adopted a digital business strategy – IDC.
- Fact/Stat-46: 70% of companies either have a digital transformation strategy in place or are working on one – Tech Pro Research.
- Fact/Stat-47: Top two priorities of CEOs to help their businesses preserve amid the COVID-19 pandemic are (1) leading digital transformation projects (37%) and (2) improving remote work experience (37%) – Statista.
- Fact/Stat-48: 55% of startups have adopted a digital business strategy, compared to 38% of traditional companies – IDG.
- Fact/Stat-49: 72% of companies who were first in their industries to experiment with digital technologies during the pandemic reported having very effective responses to COVID-19 – McKinsey.
(B) Digital Transformation Value
- Fact/Stat-50: Companies with higher digital maturity reported 45% revenue growth compared to 15% for lower maturity companies – Deloitte.
- Fact/Stat-51: The digital transformation market is expected to grow at a CAGR (compound annual growth rate) of 22.7% from 2019 to $3.3 trillion by 2025 – Research and Markets.
- Fact/Stat-52: Spending on digital transformation and direct investments into technologies and services worldwide between 2020 and 2023 are projected to reach a total of 6.8 trillion U.S. dollars – Statista.
- Fact/Stat-53: Digital transformation is expected to add $100 trillion to the world economy by 2025. Platform-driven interactions are expected to enable approximately two-thirds of the $100 trillion value at stake from digitalization by 2025 – World Economic Forum.
- Fact/Stat-54: 65% of the world’s GDP is predicted to be digitized by 2022 – IMF.
- Fact/Stat-55: A study by The Boston Consulting Group clearly shows: companies at the forefront of using big data generate 12% more income than those who don’t use big data – BCG.
- Fact/Stat-56: $6.8 trillion; the projected value of direct investments in the digital transformation between 2020 and 2023 on all industries – IDC.
- Fact/Stat-57: 51% of digital transformation efforts stem from growth opportunities – Altimeter.
- Fact/Stat-58: Executives say digital transformation’s top benefits include improvement of operational efficiency (40%), faster time to market (36%, and meeting customer expectations (35%) – PTC.
(C) Digital Transformation Customer Centricity
- Fact/Stat-59: Digital customer service interactions will increase by 40% – Forrester.
- Fact/Stat-60: 10% of budgets will go to emotion analytics, like sentiment analysis – Forrester.
- Fact/Stat-61: Marketing efforts on brand loyalty and retention will increase by 30% because customer experience is the main focus – Forrester.
- Fact/Stat-62: Some 27% of brands improved their CX this year, which is 13% higher than the previous year. They improved by focusing on core CX competencies – Forrester.
- Fact/Stat-63: Nearly 50% of all companies say improving customer experience and customer satisfaction were the leading influences to start a digital transformation – PwC.
- Fact/Stat-64: Digital transformation and a focus on customer experience can generate a 20-30% increase in customer satisfaction and economic gains of 20-50% – McKinsey.
- Fact/Stat-65: 84% of customer-centric companies focus on the mobile customer experience – Vision Critical
(D) Digital Transformation Business Optimization & Collaboration
- Fact/Stat-66: Companies move twice as fast on digital transformation when there is a shared understanding – among senior leaders, strategists and the organization as a whole – of the digital path ahead – Gartner.
- Fact/Stat-67: 70% of customers say connected processes – such as seamless handoffs or contextualized engagement based on earlier interactions – are very important to winning their business – Salesforce.
- Fact/Stat-68: 59% of customers say tailored engagement based on past interactions is very important to winning their business – Salesforce.
- Fact/Stat-69: Some 63% of customers are satisfied by getting customer service from a bot, as long as they can re-route to a live agent if needed – Forrester.
- Fact/Stat-70: 78% of heads of IT said they are communicating with the board of directors more than ever before – CIO.
- Fact/Stat-71: 90% of jobs are seen to require digital skills in the future – European Commission.
- Fact/Stat-72: 68% of executives believe that collaboration between people and AI will be key to the future of businesses – Fujitsu.
(E) Digital Transformation Technologies
- Fact/Stat-73: From a technology perspective, along with mobile (54%), data connectivity and integration (53%), web content management (49%), analytics (49%), Cloud/PaaS (45%), business rules/processes (44%) and e-commerce (44%) are viewed as critical for digital transformation success – Progress Global Survey.
- Fact/Stat-74: Over 30% of B2B tech buyers want to use chatbots and virtual assistants instead of human sellers – Forrester.
- Fact/Stat-75: 40% of all technology spending will go toward digital transformation, with enterprises spending in excess of $2 trillion in 2019 – IDC.
- Fact/Stat-76: At least 90% of new enterprise apps will insert AI technology into their processes and products by 2025 – IDC.
- Fact/Stat-77: Companies with the strongest omnichannel experiences retain 89% of their customers on average, compared to 33% retention for companies with weak omnichannel customer experience – Aberdeen.
- Fact/Stat-78: The top technologies already implemented include big data/analytics (58%), mobile technology (59%), and APIs and embeddable tech (40%) – IDC.
- Fact/Stat-79: 93% of companies agreeing that innovative technologies are necessary to reach their digital transformation goals – SAP.
- Fact/Stat-80: The implementation of digital technologies can help accelerate progress towards enterprise goals such as financial returns, workforce diversity, and environmental targets by 22% – Deloitte.
- Fact/Stat-81: When it comes to technology initiatives, 54% of companies worldwide said they are prioritizing digital transformation, while 49% are prioritizing cybersecurity – Flexera.
- Fact/Stat-82: 88% of IT leaders confirmed they are increasingly relying on a trusted set of advisors to help navigate new technologies, processes, and methodologies – 2021 State Of The CIO Executive Summary report.
The statistics give the impression of a general dilution to achieve a successful digital transformation. Some (predicted/forecasted) statistics are encouraging, but most facts & stats are thwarting. No wonder considering the mass of external and internal pressures and complexities that an organization has to address. No wonder that the digital transformation programs’ percentage of success is meager. No wonder some IT services conglomerates decided to reskill thousands of their employees and leadership and inject thousands of digital-savvy new hires. No wonder some organizations are still struggling to understand digital transformation at scale. No wonder that we see many (ambiguous) transformations frameworks and models which confuse the industries.
I lean towards the following three main reasons for such attenuation: (1) the lack of clarity in the digital strategy, digital implementation approach, and comprehensive digital roadmap, (2) the absence of the right skilled people at organizations and the IT services companies (You Can’t Give What You Don’t Have), and (3) the lack of digital transformation change management capability at both IT services companies and organizations. Therefore, a broad spectrum, business-capabilities-based, digital transformation framework is becoming necessary to achieve a coherent and clear roadmap hence a successful transformation journey.
The future belongs to the brave! Leadership is born through dramatic periods of transformation, yet good leaders do not do it alone. Surrounding them are people with the right talent and mindset and those ready to take a digital transformation framework and adapt it to the needs of their organization.
By following the right strategy, roadmap, and principles hence the right digital transformation model, any organization can create a logical and realistic approach to drive success in the period of radical change.
- Transformation requires a combination of many enterprise capabilities: exemplary leadership, strategy, culture, optimized business processes, and the right disruptive technologies.
- Effectiveness change management strategies are forcing organizations to rethink their approaches to transformation.
- Executives realize that the answer to a successful digital transformation isn’t better technology; it’s better than everything else around it.
- These statistics clearly show that digital transformation is set to continue for the foreseeable future.
- Digital transformation is a must, but it is also a competitive advantage.
- Despite the necessity of using technology to transform business, most companies have yet to complete their digital transformation plans or formulate an effective strategy that scales.
- CIOs are the owners of digital transformation efforts, but they’re not alone.
- Organizations need a dedicated leader for digital strategy (besides the CIO).
- Getting buy-in, support, and help from other leaders or employees.
- It is essential to ensure a common understanding of digital efforts.
- Modernization or optimization is tactical and digital transformation is strategic.
- Modernizing your business processes is a significant advantage, but that’s not all digital transformation all about.
- Be customer-centric in your digital efforts. Digital transformation goals can be about your internal processes and productivity. But, the ultimate purpose is to be able to connect with and engage your customers.
- Last but not least, a broad spectrum digital transformation framework to challenge the inside-out business capabilities (not people capabilities only) is becoming a necessity to achieve a successful transformation journey.