Published on the 19/07/2018 | Written by Heather Wright

Capgemini survey shows change management still a major constraint…

While digital transformation has been a big topic for a number of years, with some companies making large investments in DX initiatives, a new report says many organisations are continuing to find the DX journey a struggle, and yet to find success in their ventures.

Capgemini’s Understanding Digital Mastery Today says companies are in fact finding it just as hard today as it was six years ago to make digital transformation a business success, with a lack of leadership and digital capabilities among the key factors hampering DX success.

“Organisations are still struggling to turn their investments into business successes.”

Just 39 percent of companies surveyed believe they have the digital capabilities required for digital transformation – the same number as in 2012. But when it comes to leadership capabilities, confidence has fallen, with just 35 percent surveyed this year believing they have the capabilities – down 10 percentage points from 2012 results.

“Six years after our original research, organisations have had time to build capability and experience in driving digital transformation and one would expect the level of digital mastery to have progressed from 2012. However, our research does not find a clear advancement. Organisations are still struggling to turn their investments into business successes,” the report says.

The new research shows that despite ‘huge’ investments in digital transformations, with IDC forecasting worldwide spend on DX technologies will reach $1.3 trillion this year, and some progress on evolving customer experience, businesses are failing to create the strong digital culture needed to bring employees into DX agendas.

Unsurprisingly, organisations have prioritised customer experience, with the report highlighting increasing use of mobile channels to sell products and services, and improved knowledge of markets and customers through devices embedded in products.

However, only small gains were being seen in operations – digital design of products and services, the ability to adapt operational processes quickly, real time monitoring and the ability of employees to share knowledge, collaborate digitally and perform. In fact, less organisations are now monitoring their operations in real time (down from 48 percent to 35 percent) or modifying operational processes to adapt quickly to external changes (down from 34 percent to 29 percent), and only 38 percent said employees could collaborate digitally with other employees – a massive drop from the 70 percent cited in 2012.

The need to put emphasis on change management as much as technology, is a frequently heard message – albeit one clearly not being fully embraced yet.

Earlier this year IDC research revealed organisational challenges in melding digital transformation into business-as-usual, with many companies approaching digitisation by simply introducing new technologies without changing the fundamental operating model.

Capgemini’s report, which surveyed 1300 executives in more than 750 global organisations, comes as the latest Institute of Management Development World Digital Competitiveness Rankings, shows Australia’s digital competitiveness has improved from 15th globally last year to 13 this year, while New Zealand has slipped down the table, dropping from 14 to 19 – lower than it has been for five years. The rankings assess the extent to which countries adopt and explore digital technologies leading to transformation in government practices, business models and society in general. The United States topped the list, followed by Singapore, Sweden, Denmark and Switzerland.

Cyril Garcia, Capgemini head of digital services, says: ”Today’s technology landscape is much more complex than in 2012. New technologies such as artificial intelligence, machine learning, automation and the Internet of Things are providing businesses with opportunities they have never had before, but critical to their success is the ability to adapt and embed these technologies into their organisations.

“To take full advantage of the new technology landscape, it’s vital that business leaders not only invest in new technology but work together with their employees to advance the digital transformation agenda, putting just as much emphasis on change management as they do in understanding of the technology.”