Digital Transformation Is Business Priority For 21st Century
Senior leaders have a quandary. Do they defend, build upon, and lock in their positions as incumbents? Or do they take risks, disrupt, and potentially expose themselves?
By 2026, the average Standard & Poor’s 500 business will last just 14 years. The average business model is sustained for roughly half that: just six years. What was once a landscape of five-year strategies, long-lived IT investments, and product line extensions is evolving into a rapid series of digital business transformation initiatives, platform thinking, and customer experience. The continued evolution of digital capabilities is pushing businesses to rethink their fundamental views on customers, competitors, products, and partners.
For most companies, the strategic imperative should not just be doing things right, more efficiently, or optimally. Leaders must also determine the right things to do. Now is the time to reflect and consider the fundamentals of value creation in the business–to go beyond the immediate, incremental change and to a deeper level of change–a reimagining of every part of the business. More specifically, businesses must invest in product innovation, the integration of technology and frameworks, and open platforms. In light of this new landscape, senior leaders have a quandary. Do they defend, build upon, and lock in their positions as incumbents? Or do they take risks, disrupt, and potentially expose themselves?
To understand companies’ ambitions for transforming, SapientNitro conducted two pieces of research on the nature of digital business transformation (DBT) over the past two years. The first was with 50 global CEOs involved in DBT. The second explored the DBT perspectives of 223 U.S. and Canadian executives in charge of both marketing and technology, a hybrid role called the chief marketing technology officer (CMTO).
Both studies reinforced the same point: Digital business transformation is of urgent importance among executives. In fact, the latter study determined that, while nearly all organizations (96.9 percent) are addressing digital in some way, just six out of 10 (56 percent) have made DBT a priority.
To respond, we’ve developed an approach called the reimagining imperative. We define this as the compelling need to embrace change across all aspects of business, including personnel and leadership, partners, and supply chain. As executive leaders focus on two priorities–the search for further revenue growth and improving profitability by driving down costs and boosting efficiency–we believe a reimagining of fundamental business characteristics and relationships will be necessary.