A report released by digital commerce consultancy Salmon and managed cloud company Rackspace has revealed that many businesses don’t have the expertise required to execute a digital strategy and some (19%) have no strategy in place at all.
While 81% of businesses have a clearly defined digital strategy, only 11% are digital experts - the majority (57%) are classified as laggards hindered by weak strategies and lacking the ability to execute.
This impacts on digital transformation and many businesses could be wasting investment into this area by not having way in which to measure its impact on the business.
Neil Stewart, CEO of Salmon, said: “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 projects still brings 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%) and poor execution on past projects impacting the digital team’s credibility (27%).
In response to the study of global IT and business decision-makers, Salmon and Rackspace have developed three pillars on which they believe all businesses should approach 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. Whereas laggards focus on internal processes and cost reduction. All businesses should take the 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. 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 increase in revenue. Digital experts also developed their digital strategies with the involvement of finance department to establish a clear funding model early on.