Get tech-savvy or face “obsolescence,” says MIT
Companies understand that embracing digital technology is key - but too few are acting on their convictions, citing a lack of urgency and frustration with the process, new research has found.
Companies understand that embracing digital technology is key - but too few are acting on their convictions, citing a lack of urgency and frustration with the process, new research has found.
Companies understand that embracing digital technology is key – but too few are acting on their convictions, citing a lack of urgency and frustration with the process, new research has found.
A study by Capgemini Management and The MIT Sloan Management Review interviewed 1559 managers and executives across a range of industries. 63% said that that new technology was being adopted at two slow a rate, whilst less than two in five believed that digital transformation was a “permanent fixture” on their CEO’s agenda – and 36% said that their CEOs do not share this vision at all. This was despite the fact that the vast majority (78%) felt that digital transformation would be “critical” to their organisation over the next few years and almost all (93%) of those that had already made it a priority felt that this was the right thing to do. Less than a fifth of respondents from change-resisting companies expected their company to become more competitive in the coming years, compared to more than four fifths (81%) of digital transformers.
Companies who do not embrace technological innovation will face competitive obsolescence and will miss out on revenue and market share opportunities, warns the report, but even for the four out of five companies who are actively trying to achieve digital transformation, it can be a struggle. The key is to respond quickly to technological changes and to incorporate new features into an ever more streamlined product cycle, believes Curt Garner, Chief Information Officer at Starbucks. “IT and digital is pervasive in people’s lives now. So the advice I would give somebody starting it now is, think of yourself like a consumer technology company,” he said.
Lori Beer, Executive Vice President of Information Technology and Specialty Business at WellPoint, agrees. “Technology has always been important to our business, but it really is becoming much more strategic, especially today, when you’re seeing the emergence of new technologies,” she said. “You’re seeing a transformation of how consumers are engaging with technologies.”
So why aren’t all companies harnessing the potential of new technology? There is no definite answer, says the report, but complacency, lack of knowledge and deployment uncertainties can all play a part. Too many companies are reluctant to rethink business models that have served them well enough in the past, or see new technology as an obligatory add-on to an existing system. But the organisations that are really making technology work for them are those that have embedded these innovations firmly into the way they do things, or have even developed whole new technology-inspired models. Such a holistic approach can be daunting, but for companies that want to stay ahead of the pack, ignoring change is no longer a viable option. Transformation must be complete – and it must come from the top.
“The big thing is, technology change is happening so rapidly that every industry is being affected by this,” said George Westerman, Research Scientist at MIT’s Centre for Digital Business.
“This idea that a thousand flowers will bloom and we will all be okay is a great way to get some ideas, but we have not seen any transformations that happen bottom up,” he adds. “They’re all being driven top down.”