Is the Right Group Leading Your Digital Initiatives?

Recent research on digital transformation has revealed how companies — particularly large legacy ones — are seeking to adapt to an increasingly digital world. For our most recent study, we asked managers, executives, and analysts, “Which functional area is primarily leading your company’s digital progress?” When we analyze their responses through the lens of an organization’s digital maturity — how close an organization is to the ideally transformed digital organization — we see patterns that have implications for how companies should approach digital transformation.

Digital Transformation Is Not Mainly About Technology

We’ve observed for a while that digital transformation is more of an organizational and managerial challenge than it is a technological one. As organizations mature, they are less likely to report that IT leads this digital progress; 23% of respondents at early-stage companies name IT as the primary leader of digitalization efforts, versus 16% at maturing companies. When digital progress is led by technologists, companies often end up with glittering technologies that either go unused or fail to meet the business’s objectives.

Marriott Hotels offers an example of technology-focused transformation gone awry. Marriott’s chief digital officer (CDO) led the development of a sophisticated customer-facing app with innovative features like mobile check-in and room service. Although the app worked flawlessly, it wasn’t integrated well with the hotel chain’s operations, so the technology delivered the promised outcomes only some of the time. Focusing on technology alone — even when it is expertly designed and implemented — can obscure the other organizational changes necessary for a new initiative to deliver business value.

Of course, not all IT teams fall into the trap of technology-centric digital transformation, and Marriott’s CDO began collaborating more closely with counterparts in operations to help ensure the app delivered the desired outcomes. But IT leaders often focus too heavily on technology at the expense of business transformation, a trend that leads MIT’s George Westerman to note, “There’s never been a better time to be a great CIO, and there’s never been a worse time to be an average one.�