It’s better to climb aboard digital transformation quickly before a disruptive competitor takes a mortal bite out of your business.
Skeptics dismiss “digital transformation” as just another tech fad. Others think digital transformation amounts to putting sensors on office lights to save a little money on the electricity bill.
But they couldn’t be more wrong and may end up paying the price. It’s better to climb aboard digital transformation quickly before a disruptive competitor takes a mortal bite out of your business.
“Today’s customers – consumers and businesses – expect to integrate your products and services into their digital world,” said Forrester analysts Nigel Fenwick and Ted Schadler in a research note. “CIOs who fail to reshape their business as fundamentally digital invite disruption from the outside.”
Most line-of-business executives (LOBs), the new shot callers in tech, get what’s at stake. Nine out of 10 executives believe digital will disrupt their business in the next 12 months, according to a Forrester survey. Just ask Blockbuster, Borders, taxi drivers, and a host of others how dangerous falling behind digital can be.
But what, exactly, is digital transformation?
Forrester defines it as a business strategy, not a digital one, that puts the customer front and center. For marketing and sales, digital transformation means reengineering how your business creates value for customers in the digital age. For everyone else, it’s about driving operational agility in the service of customers, which may include making employees more productive, streamlining processes, and maximizing assets.
A company’s future hangs in the balance, and so business leaders across the organization must make digital transformation a priority.
The CMO, in particular, has emerged as the powerful custodian of the customer experience, where mobile and social have transformed the way customers discover, buy and engage with products and services. In essence, marketing has become an operation based on data-driven customer insights, not hunches. The new CMO must have a strong vision and a firm grasp of an exploding martech landscape.
Not everyone will be able to make this leap. Executive search firm Spencer Stuart reported that the CMO tenure fell from 44 months in 2015 to 42 months in 2016 – a second consecutive annual drop. “Tough business headwinds, new technologies and pressures to change quickly” are some of the reasons for a shrinking CMO tenure, Greg Welch, a Spencer Stuart consultant, told CMO Today.
Obstacles to digital transformation seemingly surround LOBs. A bunch of Forrester surveys over the last few years have shed light on dangerous times: Only one out of four companies report they have a full digital strategy in place. Less than one in three LOBs think their digital transformation approach is the right one. Worse, only one in five believe the right people are setting the strategy.
Nearly seven in 10 LOBs see functional teams in their areas acting as barriers to effective coordination, Forrester says.
But excuses, even legitimate ones, won’t save LOBs who fail to make the digital transformation. Digital touches everything, from customers to employees, products to operations, and casts a hot spotlight on the LOB.
There’s no question success will be challenging and elusive. Indifference, however, can be fatal to an LOB’s career. If you don’t think digital transformation is a big deal, you just might find yourself out of a job.
Based in Silicon Valley, Tom Kaneshige writes the Zero One blog covering digital transformation, AI, marketing tech and the Internet of Things for line-of-business executives. He is eager to hear how digital transformation is impacting your business. You can reach him at firstname.lastname@example.org.