Strategy, Not Technology, Drives Digital Transformation

Strategy, Not Technology,
Drives Digital Transformation
Becoming a Digitally Mature
Enterprise
Excerpted from the MIT Sloan Management Review and Deloitte Digital Business Study

2 Deloitte University Press | Becoming a Digitally Mature Enterprise | @DU_Press @DeloitteDigital #DigitalEvolution Copyright © 2015 Deloitte Development LLC. All rights reserved.
This year’s MIT Sloan
Management Review and
Deloitte global study of digital
business found that digital
transformation isn’t really about
the technologies.

The strength of digital technologies—social, mobile,
analytics, and cloud—doesn’t lie in the technologies
individually.
Instead, it stems from how companies integrate them
to transform their businesses and how they work.

“How close is your organization to that ideal?”
Digital Maturity Levels
% Respondents
Maturing
(7-10)
Developing
(4-6)
Early
(1-3)
26%
45%
29%
Early Developing Maturing
“Imagine an ideal organization transformed by digital technologies and
capabilities that improve processes, engage talent across the organization,
and drive new and value‐generating business models.”

Leaders need to adapt digital programs in response
Challenges change as companies mature
Respondents were asked “What barriers are impeding your organization from taking
advantage of digital trends? (select up to three)” Ten possible barriers listed.
Lack of strategy Too Many Priorities Too Many Priorities
Too Many Priorities Lack of Strategy Security Concerns
Lack of Management
Understanding
Insufficient Tech Skills Insufficient Tech Skills
EARLY DEVELOPING MATURING
1
2
3

Digitally maturing
organizations are much
more likely to have risk-
embracing and
collaborative cultures
Leadership is essential
in conceptualizing how
digital technologies can
transform the business
Digitally maturing
companies are much
more likely to have a
clear digital strategy
Strategy Culture Leadership
What separates digital leaders from the rest is a clear digital strategy
combined with a culture and leadership poised to drive transformation.

Only 15% of early stage respondents have a clear and coherent digital
strategy. That number climbs to 80% among the digitally mature.
Digital strategy drives digital maturity

Scope and objectives drive digital strategy
Earlier stage companies
need more transformative
objectives
To what extent do you agree that the following are objectives of
your organization’s digital strategy?
Respondents who answered “Strongly agree” or “Agree”
% Respondents

Does your organization have a digital
strategy that goes beyond implementing
technologies?
“I would rather start by rethinking business and commerce and then
work backwards. New capabilities make new solutions possible and
needed solutions stimulate demand for new capabilities.”
- Benn Konsynski
professor of information systems and
operations management,
Emory University

Maturing digital organizations focus on building skills
Many companies at the early stages lack the ability to conceptualize
how digital technologies can impact the business.
Digitally maturing organizations are 4X more likely to provide employees
with needed skills than less digitally mature.

Digitally maturing
organizations are more
comfortable taking
risks. Business leaders
may need to embrace
failure as a prerequisite
of success.
Taking risks becomes a cultural norm
How do respondents characterize the culture of their organization?
% Respondents

“I have never seen a technology drive change on its own. Culture
leads the adoption of technology. Our ability to innovate depends on
the impatience of our culture.”
- Dr. John Halamka,
chief information officer,
Beth Israel Deaconess Medical Center
in Massachusetts
Does your company culture foster
digital initiatives?

Among the digitally
maturing, 75% say
leadership has sufficient
skills to lead digital
strategy. 90% are
confident in leadership’s
digital savviness.
The digital agenda is led from the top
Confidence in Leadership Capabilities
by Maturity Level1
1 Percentage of respondents who answered agree or strongly agree.
% Respondents
Respondents from earlier
stage companies are not
confident in their leaders’
digital capabilities

Is your organization confident in its
leadership’s digital fluency?
“You have to be an influential leader in the physical, virtual and
augmented worlds. We have to engage people through Twitter and
other social platforms. But then also stand in front of 100 people and
be authentic. We toggle back and forth between virtual and physical
platforms all day long.”
- Steve Milovich,
SVP of global human resources and
talent diversity Disney/ABC Television
Group, and SVP of employee digital
media at The Walt Disney Company

Businesses will need to up their digital game
Employees want to work for digital leaders
83%
85%
80% 81%
79%
76%
72%
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
21 or
younger
22 to 27 28 to 35 36 to 44 45 to 52 53 to 59 60 or
Older
% Respondents How important to you is it to work
for an organization that is digitally
enabled or is a digital leader?

What are companies doing?
Barriers Lack of strategy
Managing
distractions
Security focus
Strategy
Customer and
productivity driven
Growing vision Transformative vision
Culture Siloed Integrating
Integrated and
Innovative
Talent
Development
Tepid interest Investing Committed
Leadership Lacking skills Learning Sophisticated
EARLY DEVELOPING MATURING

Moving from strategy to business value
Most businesses today
know they need
some level of digital
transformation.
But where do you begin?
And how do you know
you’re going about it the
right way?
ALIGN YOUR DIGITAL LEADERS1
CREATE STRATEGY FOR DIGITAL
TRANSFORMATION
2
TURN DIGITAL STRATEGY TO
BUSINESS VALUE
3

Create an effective strategy for digital transformation
via ideation and enablement
The “What” and the “Why”
Digital Ideation
Enablement
• Visionary and discovery
• Customer/employee engagement
• Business case development
• Platform and tool analysis
• Digital transformation road mapping
• Design led strategy
• Digital architecture
• Bring your own device
• Centers of excellence
• Application strategy engagements
• Security and risk activities
• Agile adoption
• Mobile app management
The “How” and the “When”

Share your thoughts with the hashtag #DigitalEvolution
Follow @DU_Press and @DeloitteDigital on Twitter
Explore more findings from the 2015 digital business global executive
study and research project
Download your copy of the Digital Business Study
Download

Undertaken by Deloitte in collaboration with
MIT Sloan Management Review
About the research
‫‏‬2012
‫‏‬2013
‫‏‬2014
• Survey of nearly 5,000 business executives,
managers and analysts from organizations
globally to understand how the digital
enterprise is evolving
- 39% of respondents were within the U.S.,
61% outside U.S.
- 129 countries, 27 industries
- Organizations of various sizes
• Interviewed more than 20 executives and
subject matter specialists from a number of
industries and disciplines to understand the
practical issues facing organizations today
• Article published in MIT SMR Summer edition;
feature report to be published July 14th
2015 study follows
three years of
research focused
on social business

Meet the authors
DOUG PALMER
principal in the Digital Business and
Strategy practice of Deloitte Digital
DAVID KIRON
executive editor of the Big Ideas
Initiatives at MIT Sloan Management
Review, which brings ideas from the
world of thinkers to the executives and
managers who use them
ANH NGUYEN PHILLIPS
senior manager within Deloitte
Services LP; leads strategic thought
leadership initiatives
NATASHA BUCKLEY
senior manager within Deloitte
Services LP; researches emerging
topics in the business technology
market
GERALD C. KANE
MIT Sloan Management Review guest
editor for the Digital Transformation
Strategy Initiative

Follow @DU_Press
Sign up for Deloitte University Press updates at www.dupress.com.
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Strategy, Not Technology, Drives Digital Transformation

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