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Why Some Companies Will Not Succeed in their Digital Transformation

Written by Sandra Ng, Group Vice President, IDC Asia/Pacific

Digital transformation is no longer a buzzword – it is an existential concern for organisations to survive in the digital economy. But survival alone is not enough. Whatever a company’s vision is for the future, it must include digital transformation in order to grow and compete effectively.

This is why companies have invested heavily in digital transformation, which is predicted to reach nearly $2 trillion in 2022 in Asia-Pacific alone and 2021, 60 percent of the region’s GDP will be derived from digital products or service created through digital transformation.

Despite the high investment, not all organisations will see the success they expect as they lack the right tools to overcome five of the biggest digital transformation deadlocks: outdated KPIs, siloed DX initiatives, short-term focus with tactical plans, limited skills and expertise and silos of innovation. Failing to do so would mean that organisations are only scratching the surface of what they can achieve with digital transformation.

Credit: IDC

Unlocking the Five Digital Transformation Deadlocks

While organisations in Asia-Pacific have been embracing digital transformation, overall progress has been slow.

Outdated Key Performance Indicators

We all know the importance of using key performance indicators (KPIs) to track our efforts in achieving key business objectives. When it comes to measuring digital transformation efforts, it makes absolute sense to use digital KPIs to track and measure their digital investments as traditional metrics do not accurately quantify such digital projects.

Unfortunately, half of Asia-Pacific organizations today still do not have a separate or specific set of metrics to gauge the success of their digital initiatives.

Siloed DX initiatives as a result of traditional organization structure

Digital transformation is not just about implementing technology but it is an ongoing journey to inculcate a digital-first mindset throughout your organization. Yet, challenges that organisations struggle with include existing business models getting in the way, persistent culture and outdated organisational structure. Strong executive leadership will play a huge role in unlocking the full potential of digital transformation. This can be achieved – and led from the top down – through collaboration across business units, implementing digital training programs, embracing risk-taking and instilling a continuous desire to learn and adapt.

Two companies that have put in place robust programs to create the right environment for rapid innovation and empowering employees are satellite TV and radio operator, Astro in Malaysia, and Hong Kong’s retail company, Lane Crawford. Astro’s Digital Culture Accelerator Program aims to reskill talent for new ways of working and since its launch, over 850 employees have benefitted and are now able to create, share and collaborate on projects.

Short-term focus with tactical plans

Digital transformation is a journey that must be optimized for both the near and long term. Unfortunately, 60 percent of organizations have in place digital transformation initiatives that are focused on the short term, which are usually tactical and disconnected from the enterprise strategy.

Envisioning how the industry may transform in the future and developing a digital roadmap that is modular, scalable and extensible help enterprises leapfrog the competition and advance their DX progress.

Limited digital skills and expertise

Creating new capabilities is also a crucial element to deliver greater value as a digital enterprise. IDC’s IT Capabilities Framework emphasizes that enterprises need to bring together technology, talent, governance, processes and data to develop digital capabilities around a culture of innovation and data.

As part of the Lane Crawford’s commitment to learning and development, the retail giant embarked on a massive internal cultural transformation initiative, including the setup of an Innovation Team to use “test & learn” and agile methodologies to better engage and motivate employees.

Silos of innovation

Lastly, organizations need to overcome silos of innovation – essentially, a mindset that blocks collaboration with other stakeholders in the innovation supply chain. The key challenge is a lack of platform to engage stakeholders. One way is to develop a data-centric digital platform that helps to build a singular technological architecture – one that is integrated, and spans across IT, digital and business domains in the organization. The heart of the digital platform should be what we call an “Intelligent Core”, as it accelerates the ability to transform data into insights and actions, one of the determining factors in leading the technological rat race.

By reinventing themselves, digitally determined organizations will gain a lasting advantage over competitors that are lagging in their vision and are positioned to better respond to changing market and customer needs.

One company that has overcome these deadlocks and has become digitally determined is Immigration and Checkpoints Authority (ICA), the border control agency of Singapore, which was awarded the “Digital Transformer of the Year” at the IDC Digital Transformation Awards last year. With continuous enterprise-wide digital innovation in place, it seeks to deliver enhanced value and better safeguard its citizens by leveraging on new digital capabilities and technologies. From its innovations like eAppointment to iCollect kiosks, ICA has revolutionized the passport application and collection processes from a manual-based model with a suite of solutions that utilizes robotics, biometric identification and automation, creating a seamless passport experience.

Transforming into The Future Enterprise

With a clearer view of what the future enterprise will look like, organizations are rethinking digital transformation and looking into how digital technologies can address the future of work, customer engagement, intelligence, operations and leadership. Enterprises who have successfully achieved digital determination and begun to actualize their digital strategies should aspire to eventually transform into The Future Enterprise, helping them gain an edge in the digitalized economy.

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