Leadership doubts jeopardizing many digital transformation efforts

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Despite the attention and investments being paid to digital transformation, only half of organizations are successfully executing on their strategies and leadership issues are a primary reason why.

That is the finding of a recent study by Wipro Digital, which says half of senior executives polled feel their organizations are not being successful with digital transformation efforts. The study surveyed 400 senior-level U.S. executives about the digital transformation strategies within their organizations.

The report's findings also show that while 91 percent of executives are aligned on what digital transformation means, only 4 percent realize half of their digital investment in under one year – with the majority of respondents saying it has taken their organization two to three years to see at least half of these investments come to fruition.

"Digital transformation efforts are coming up short on intended ROI, in part because digital transformation is as much a leadership issue as it is a strategy, technology, culture, and talent issue," says Rajan Kohli, senior vice president and global head at Wipro Digital. "Real digital transformation occurs when courageous leaders align goals in practice as well as theory, manage opportunity more than risk, and prioritize the future vs. retrofit the present."

Key study findings identify leadership issues as a key factor in why digital transformation efforts aren’t successful. Among those findings:

Organizations are aligned on what digital transformation means in theory, but not in practice

“Ninety-one percent of executives believe their company is aligned on the definition of digital transformation - yet one in four executives note that a key obstacle to success in their strategies was a lack of alignment on what digital transformation actually means. Lack of a clear transformation strategy was similarly cited by 35 percent of executives as a key barrier to achieving its full digital potential,” the study reported.

Underlying doubts among leaders

“Nearly one in five senior executives admit that they secretly believe that digital transformation projects in their company are a waste of time,” the study says.

Leadership mindset and skills challenges

“CEOs, CTOs and CIOs are almost equally likely to serve as the primary driver for digital transformation strategies, and they are at least twice as likely to do so more than any other senior executive – yet mindset and skill challenges, such as resistance to introducing new ways of working (cited by 39 percent), and feeling overwhelmed by digital complexity (cited by 40 percent), were cited as the top two leading obstacles preventing a company from achieving its full digital potential,” according to the study.

Focus on back-end benefits vs. product innovation and growth

“Back-end departments such as operations and IT are by far the leading beneficiaries of digital transformation strategies, and combined with Procurement and Finance, are cited by 60 percent of executives as reaping the benefits. Far less likely to benefit are departments such as product development (cited by 15 percent), marketing (cited by 13 percent) and sales (cited by 10 percent),” the study notes.

IT investment by executive versus ownership

“CMOs are spending more than ever on IT – yet they are the least likely of any senior executive (cited by 2 percent) to drive digital transformation strategies. Chief digital officers fare little better in driving just 12 percent. Findings correlate with the fact that nearly one in four executives say that a key obstacle to success is that their company's structure hasn't changed to reflect digital imperatives,” the study says.

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