The role of technology in digital transformation is often overplayed by decision makers, leading to poor outcomes.
This is according to research by Telstra, which looked at the strengths and weaknesses surrounding digital transformation decisions across 12 industries in 14 global markets.
It found that companies often placed an unnecessary level of focus on technology in digital transformation, disregarding the role of people, processes and partnerships to successfully realise projects in the process.
"Technology alone is not a silver bullet for digital transformation,” said Nicholas Collins, Telstra President for the Americas.
“While investing in the right technology is crucial, placing too much importance on the role and performance of technology in digital transformation is a barrier to success.”
Factors for success beyond technology in digital transformation
The research indicated that the most successful projects looked beyond the role of technology in digital transformation, taking into account the role people, processes and partnerships played in making them effective.
"Successful digital transformation relies on more than the right technology, it requires the right culture, the right people – and the right processes to support them. The research results back this up,” said Collins.
“Globally, organisations that focus on multiple elements of digital transformation decision-making, including people and processes, are significantly more likely to be digitally mature (45%) and make excellent decisions (52%). By comparison, companies focusing on technology alone show less progress.”
This highlights the fact that embracing technologies without looking at the role of the wider business does not yield the same success as more holistic approaches.
"Digital transformation must be a whole-of-company journey that involves upskilling and changing employee mindsets, adapting structures and ways of working, and creating teams that can maximise the new technologies being introduced."
Successful digital transformation
Telstra’s research found that there was a remarkable lack of hard financial outcomes from many digital transformation projects.
This is despite the fact that investment in projects around this concept are dramatic – a third of businesses in the US, for example, have invested more than $1m, while one in six have spent more than $5m.
"The lack of hard outcomes for US businesses highlights the need for an equal focus on the role of people, processes and partnerships, as well as technology in digital transformation journeys,” added Collins.
“Businesses can only deliver the full benefits of digital transformation if their people understand the technology capabilities and are trained to maximise them, there are the internal processes to optimize the experience, and the right partners are in place to support the business where required.
"Successful companies are clear on what digital transformation means for their organization, they have empowered their people, strengthened their processes and identified their key partners."