Digital transformation projects are underway at the majority of organizations, but despite goals of increasing productivity and reducing costs, most businesses remain unclear of what areas they should focus on and what value is being produced, according to a recent report from Celonis.
Many organizations have wasted significant monetary and other resources on business transformation initiatives that have been poorly planned, the report found. Some 42% of the 450 C-suite executives surveyed said they do not know where to start when developing their transformation strategy, yet 37% of businesses have spent over $500,000 on such strategies in the last 12 months.
SEE: Digital transformation: A guide for CXOs (Tech Pro Research)
Perhaps for this reason, 41% of senior leaders said they believe their business transformation efforts have been “a waste of time,” according to the report.
There also exists a disconnect between those developing transformation strategies and those actually implementing them, the report found. Of the 450 business analysts surveyed, 39% said they are not regularly consulted to inform their organization’s transformation strategy. And 63% of business leaders said that front line workers are only involved in transformation initiatives because middle management or consultants tell them which changes to make.
Many organizations struggle with transformation projects because they dive too quickly into implementation before first understanding what needs to change, the report found. Some 79% of executives surveyed said they do not review internal business processes to understand what should be prioritized when setting initial goals and KPIs for a transformation program. This demonstrates that often times, business leaders invest in transformation not because they have identified a specific problem to be solved, but because they believe they should, the report noted.
“Transformation strategies will inevitably be part of every organization’s operations, because no business can avoid adapting to the latest industry and technological trends,” Alexander Rinke, co-founder and co-CEO of Celonis, said in a press release. “However, they should be founded in concrete insights derived from processes that are actually happening within a company. Our research shows that too many businesses are rushing into costly initiatives that they do not necessarily even need to embark on. They are falling at the first hurdle; having a better understanding of inefficiencies in underlying business processes can help organizations invest wisely to provide the best possible service for their customers.”
For tips on how to accelerate your organization’s digital transformation success, check out this TechRepublic article.