The first rule of digital transformation? Don't talk about digital transformation

Digital transformation projects are gradually gaining momentum, but many executives say their initiatives still face major barriers.

Digital transformation -- rethinking existing business models and processes through the use of technology -- are a high priority for many businesses, especially those worried about being overtaken by nimbler digital-only rivals.

An optimistic one third of UK execs surveyed by Dell think they are the ones that will be doing the disrupting, while a nervous quarter worry they'll be the ones getting disrupted. A similar proportion said they worry about struggling to meet changing customer demands within five years, and one in five fear that their organisation will be left behind.  

The research rates just five percent of UK businesses as 'digital leaders' based on their IT strategy, workforce transformation strategy and planned investments. In 2016, research defined 20 percent of UK businesses as 'digital laggards' -- companies without a plan for digital transformation and limited investments in place: that has dropped to three percent this time around, perhaps because some of those laggards have gone out of business. The biggest group now -- over a third -- is the 'digital evaluators', who are 'gradually embracing' digital transformation. Nine out of ten companies admitted facing barriers in the way of digital transformation, with lack of budget and resources top of the list.

• Digital transformation: A guide for CXOs (Tech Pro Research)
• What enterprises will focus on for digital transformation in 2018
• Digital transformation: Three ways to get it right in your business

Tech companies like the idea of digital transformation, because it can involve buying a lot more hardware and software. IDC estimates that digital transformation will be a $2 trillion opportunity for tech companies within three years. But, perhaps reflecting how broad the term 'digital transformation' has become, the technologies that the execs surveyed by Dell said they were investing in ranged from cybersecurity, cloud computing and the Internet of Things through to blockchain.

But 'digital transformation' is about rethinking company culture as much as it is about technology.

"We don't really talk about digital transformation, we do it," said John Allert, CMO at Formula 1 company McLaren, speaking at the launch of the Dell research late last year. "We talk about agility and we talk about security and we talk about outcomes. If you are focused on digital transformation as a noun rather than as a verb you are missing the point completely."

"You need to be doing things differently rather than just spending more money; you need to be doing fundamental things to your culture -- the agility the robustness of the systems that you have," Allert said.

SEE: Digital transformation: A CXO's guide (ZDNet special report) | Download the report as a PDF (TechRepublic)

For example, McLaren accepted that its workforce needs to be more mobile; it has a headquarters in the Surrey countryside, but also has developers based in a WeWork location in central London.

"We've had to challenge ourselves to let go and not look to employ people who look like us and sound familiar to us, or we're not upholding the legacy of the people who actually founded the business," Allert said. "We were the first people in the world to make a carbon-fibre car, for example: the people who made that decision in 1980 were exactly the same kinds of cultural forward thinkers that we now want to bring into our business and tell us what today's version of that is, because we don't know. Recognising that you don't know how do to that is a major undertaking for some business cultures, and it has been for ours."

• Digital transformation: Closing the gap between innovation and execution
• These are the biggest challenges of digital transformation (TechRepublic)
• Digital transformation gut check: Sorry state or natural selection

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