Firms Face Challenges in Digital Transformation - eMarketer

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Firms Face Challenges in Digital Transformation

Business leaders feel overwhelmed by and unfamiliar with digital technologies

October 29, 2013

Technology—at least in the abstract—holds a great deal of promise for companies: greater efficiency and even new ways of conducting business. But the flip side is the need for both resource investment and near-constant upkeep to yield results.

The MIT Sloan Management Review and Capgemini Consulting conducted a survey of executives and managers in a variety of industries worldwide to gauge their feelings on technology as it related to their businesses. They found that companies faced a variety of challenges in adopting new digital technologies.

Fifty-three percent of respondents said the top cultural barrier to digital transformation was competing priorities. An almost equal number of respondents, 52%, said they were stymied by a lack of familiarity with digital technologies. Four in 10 named resistance to new approaches as a barrier. Internal politics and aversion to risk were seen as less prominent obstacles to digital transformation.

Corporate Cultural Barriers to Digital Transformation According to Executives Worldwide, 2013 (% of respondents)

The study also concluded that companies faced a challenge in determining what returns a digital overhaul might yield. While 26% of respondents said their company had set key performance indicators (KPIs) to measure return on investment, 57% had not, and 17% simply did not know.

Companies that Have Established Key Performance Indicators (KPIs) to Track the Progress of Their Digital Transformation According to Executives Worldwide, 2013 (% of respondents)

But those who had considered the challenge of ROI metrics saw a problem in simply identifying the KPIs that would be useful to them. Other major challenges named by respondents included changing the culture to a degree that would allow KPIs to work properly, and the absence of the management skills necessary to see KPIs through.

Clearly the idea of digital transformation within a company is simpler than digging into the often messy details of such a sea change. But in the digital world, companies need to gird themselves for the effort or risk being left behind.


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