The IT departments is more commonly responsible for digital transformation initiatives than the marketing and/or digital department, finds the 2017 State of Digital Transformation report [download page] from Altimeter, a Prophet company. The study is based on a survey of 528 qualified digital transformation strategists and executives from companies with more than 250 employees in the US, Canada, UK, Germany and France.
Digital transformation is defined for the report as:
“The investment in and development of new technologies, mindsets, and business and operational models to improve work and competitiveness and deliver new and relevant value for customers and employees in an ever-evolving digital economy.”
This year, 28% of survey respondents said that the CIO/CTO officially owns or sponsors the formal digital transformation initiative at their organization. That puts them ahead of both CMOs (23%) and CEOs (20%) in terms of digital transformation leadership.
Separate results concur: one-third said that digital transformation efforts originate from the IT department, while about 30% said that the Marketing and/or Digital department spearheads these efforts.
These results appear to be in contrast from recent years: in 2015, the report’s authors point out, CMOs (34%) were much more likely to be in charge of digital transformation than CIOs and CTOs (19%).
Another shift has been the rise of innovation departments. In this latest study the Innovation department is now originating digital transformation initiatives at almost 1 in 7 companies (13.6%). And for 1 in 12 companies (8.1%) a Chief Innovation Officer is in charge of digital transformation initiatives.
What Are Digital Transformation Initiatives’ Challenges?
There appear to be 5 key challenges faced by digital transformation initiatives:
- Low digital literacy or expertise among employees and leadership;
- Digital transformation being viewed as a cost center;
- Company culture;
- Lack of budget; and
- Lack of staff resources.
Collectively, these suggest that culture and resources (both financial and staffing) are the key constraints as of now.
Those could be mitigated to some extent by steering committees. For now, though only about 4 in 10 have a formal steering committee or workgroup with executive support and resource allocation that includes cross-functional and inter-departmental members.
To be fair, few respondents are without a steering committee. Instead, for most, the company has one, but it’s still pursuing executive sponsorship.
Not surprisingly, the IT department is most commonly represented in such committees, present in virtually all (98.7%). Marketing/Advertising/Digital departments also have a hand in about three-quarters of steering committees, while Innovation is represented in more than half (54%).
The full report – which contains much more data about the maturity levels and KPIs associated with digital transformation – is available for download here.