Digitized business processes have rapidly become the norm for modern companies, as they strive to take advantage of technological advances to improve their services. The digitization trend has influenced corporate processes so much that in a couple of years, the term digital business will give way to just business, Bill McNee, group executive at ISG Insights, informed the audience at the recent Digital Business Summit in Chicago.
"Why do we need to qualify it as digital business when all business will be conducted within the context of a digital fabric?" McNee asked. As proof, he pointed to a recent survey by ISG Research showing the quickening pace of digital business adoption.
Of the 141 senior business and IT leaders surveyed in the U.S. and Western Europe, 73% responded that digital business is a corporate priority in their organization, up from 68% in 2015, McNee said. Over half of the respondents (54%) said they believe data science is at the heart of their digital business strategy, and 55% said their company has or is currently evaluating the need for a chief digital officer or chief digital strategist, reinforcing the strategic importance of digital business.
Sixty-eight percent of the respondents said their company has budgeted specifically for digital business initiatives. That is down from 76% in 2015, but ISG sees that as evidence of digital business maturation.
"The need for a special carve-out for digital business budget has declined. We believe that budgets for digital initiatives are increasingly being consolidated into ongoing operations," he said to the Digital Business Summit audience.
Indeed, ISG predicted "that 88% of large enterprises in the U.S. will be fully engaged in digital business by 2020," McNee said.
Digitization, a people-centric effort
In the meantime, organizations are focusing on the hard work of making digital business a reality. On the technology side, McNee said it is important for organizations to focus on creating a malleable digital backbone that they can continuously adapt. Exploring automation opportunities should also be a part of an organization's digital strategy. But, he added, going digital is less about technologies and more about managing the fundamental changes in business brought about by the implementation of those technologies.
Digital business requires companies to rethink core operating principles, business models and customer engagement -- things that are hard to do, he stressed. These kinds of big transformations require continuous engagement between the C-suite, the various lines of business and IT, with CIOs playing a major role.
One of the factors that makes digital business hard is people are naturally resistant to change, McNee said. Non-IT issues like organizational willingness to change and company culture remain challenges. Therefore, strong executive leadership, organizational alignment and a culture or willingness to change are imperative to success.
There is also a growing recognition that digital business demands new skills: More companies are having difficulty finding the right talent to support their emerging digital business initiatives. McNee advised businesses should be prepared to handle the skills shortage, which he warned will get worse before it gets better over time.
Finally, for companies that are just starting out in their digital endeavors, McNee advised they start small and avoid trying to "boil the ocean."
"Recognize that it's often good to be second; you don't have to be the trailblazer," McNee advised the audience. "It is critically important to learn from your peers, both within and across industries. Being second to market today is not a losing strategy at all; in many ways, it's a winning strategy."
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