Digital Transformation: The Power of Transparency in Achieving Success
Date: May 04, 2021
Recent trials by the business community have shed light on the challenges of digital transformations and the vital role of internal transparency in ensuring success. As IT spending continues to rise globally, with Gartner predicting an 8.4% increase in 2021, businesses are looking for ways to maximize the returns on their technology investments. The key to unlocking the full potential of digital advancements lies in promoting transparency throughout the organization.
In a world where technology is no longer just a support function but a driver of business outcomes, organizations must empower every level with real-time information on IT spend. Simply introducing new devices and software is not enough; what is needed is a culture of transparency that allows for on-the-go adjustments in the budget. This transparency can be the difference between a successful digital transformation and a failed one.
In previous articles, we have explored various aspects of digital transformation strategy, from business strategies to overcoming organizational barriers. In this post, we delve into the role of transparency in improving results and achieving milestones early in the digital transformation journey.
The Truth About Digital Transformation
Despite the hype surrounding digital transformation, the success rate remains elusive. Research shows that a significant number of organizations struggle to achieve tangible outcomes from their digital initiatives. A global survey by McKinsey revealed that while 80% of organizations are undergoing digital transformation, only a few are reaping the rewards. Bain’s findings indicate that only 8% of companies are successful in realizing returns on their digital investments.
What Sets Apart the 8% Technology Leaders?
The secret to the success of technology leaders lies in their approach to digital transformation. They understand that digital transformation is not just about technology but about transforming the business as a whole. These leaders embrace three key mindsets that set them apart:
1. Purpose Mindset: Transform, don’t just sustain
Technology leaders prioritize the transformation of the business over maintaining legacy systems. They invest in new services and products that drive business outcomes, rather than pouring resources into outdated systems.
2. Investment Mindset: Spend on new architecture and talent
Successful digital leaders invest in modernizing their architecture, developing new talent, and making their teams agile. Companies like Tesla, Amazon, and Capital One have recognized the importance of investing in new technologies early on.
3. Transparency Mindset: Keep technology spending open to all
Technology leaders prioritize transparency by keeping real-time data on IT budgets and spending accessible to all stakeholders. This level of transparency allows for better decision-making and accountability across departments.
The Role of Transparency in Digital Transformation
Transparency plays a crucial role in the success of digital transformations. By keeping a close eye on technology budgets, organizations can make informed decisions about where to allocate resources for maximum value. Lack of transparency leads to a loss of synergy across departments and hinders the ability to link technology spending to business outcomes.
To optimize IT spend and bring transparency to digital transformation, organizations should focus on three key areas:
1. Make real-time data on technology spending available to stakeholders
2. Create product dashboards instead of technology categories
3. Develop shared accountability for technology spending
Case Study: The Potential of Transparency
A global airline firm implemented a three-step transparency strategy for digital transformation, allowing executives to map technology budgets to business goals and identify cost-saving opportunities. Challenges included training leaders and extracting the right data to support the transformation journey.
Recommendations for Business Strategists
Successful digital transformation starts at the top, with leadership support and commitment being essential for success. Business strategists should focus on reorienting conversations around transparency, developing talent in digital technologies, engaging key leaders from individual units, and investing in the right tools and architecture.
In conclusion, transparency is a critical first step in the digital transformation journey. By promoting transparency and empowering stakeholders with real-time data, organizations can make informed decisions and drive successful outcomes in the digital age. To learn more about success stories and strategies for digital disruptions, visit TSI Insights.