In the world of business, the words “disrupt, innovate, and transform” have become the new normal. For companies looking to make their mark, digital transformation is now the pathway to create revenue and new value, increase profitability, and improve employee and customer retention. It can also help remove IT complexities, risks, and barriers to innovation, allowing organizations to meet evolving business demands. Yet, most companies fail to just meet, let alone exceed, their digital transformation goals of direct business impact and operational adoption.
Why Digital Transformation, and Why Now?
For some organizations, digital transformation is in their DNA. The adaption to—and adoption of—emerging technologies to further business goals comes instinctively to them.
For the majority of middle-market companies, however, digital transformation requires a lot more foresight, consideration, and planning. Organizations are forced to shed old habits, update cultural norms, upskill their employees, and adjust their way of thinking to become a digital business. They must learn to connect the dots between digital initiatives, strategy, and business enablement, and master the art of balancing quick wins with longer-term, strategic investments.
Middle-market companies, especially, have a unique challenge: They must learn to navigate the journey without the more robust resources of their larger peers, nor the same level of flexibility and agility as their younger ones. They must start the journey today—and those that do are already behind.
While the benefits of digital transformation are clear—including boosted profitability, customer experience, and operational efficiency—the consequences of not undergoing transformation are dire. Mid-market companies that don’t constantly transform and evolve risk being outranked by their competition, losing industry relevancy, and being replaced by their more technologically savvy, nimble competitors. They risk going out of business—and quite possibly, not being missed.
Digital transformation is a lifelong journey, not simply a stop along the way. It is as much of a mindset shift as it is a process or series of steps. Companies that begin their journey today are much more equipped to continue evolving tomorrow. The challenges will be great—but the rewards, greater.
Top Five Digital Transformation from BDO’s 2019 Middle Market Digital Transformation Survey Findings
- Developing a digital transformation strategy is middle-market executives’ #1 digital priority. 34% of executives cite developing a digital transformation strategy as their #1 digital priority. This is especially prominent among lower middle-market companies (48%).
- Digital transformation goes beyond IT. Digital transformation is no longer a job for just the IT department: Nearly half (46%) of all middle-market companies state their non-tech C-suite executives (e.g. CEO, CFO, CMO, COO) are responsible for leading digital transformation in their organization.
- Improving customer experience and operational efficiency top mid-market organizations’ short-and long-term goals.
- Digital transformation delivers.
- Top digital challenges include cyberattacks and privacy breaches (33% —#1 digital threat), establishing the right metrics (27%—#1 barrier to moving forward with a new digital initiative), and lack of skills or insufficient training (54%—#1 barrier to implementing a digital initiative).