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Digital Transformation Leaders & Laggards


Digital transformation has been a key topic of conversation for some time now, but a prominent theme at CES 2021 doesn’t have to do with the act of digital transformation itself. Instead, much of the conversation had to do with the emergence of “digital leaders” and “digital laggards” and what an organization finding itself behind the digital transformation curve can do to pull forward.

The emergence of these leaders and laggards is not new — researchers and analysts have been reporting on both groups for years. Accenture’s pre-COVID Future Systems study, Your Legacy or Your Legend, explores organizational ROI of tech investments (or lack thereof) and identifies what digital innovators do differently to set themselves apart from their peers, opening with the statement, “No matter your industry or business model, the technology path you choose now will determine more decisively than ever your company’s financial success.”

Organizations considered digital leaders have a more holistic view of technology systems, opting to invest in those that can be implemented across the enterprise, versus one or two systems spanning a handful of business units. Leaders are always on the lookout for ways to make their technology investments work harder for the organization, integrating processes and technologies to build more robust, cost-effective enterprise systems, whereas laggards tend to be more risk-averse when making these decisions. While centralized system upgrades geared towards individual business units appear to be a reasonable investment and can even generate moderate ROI, they tend to lack scalability.

During the CES 2021 Keynote Future Reimagined, Julie Sweet, CEO of Accenture, stated that the COVID-19 pandemic created a movement of “compressed disruption,” in which organizations were forced to assess and transform their digital operations much more quickly than ever anticipated to meet the expectations of consumers and employees. This period of compressed disruption exposed a much wider gap between digital leaders and digital laggards and made clear that organizations who invested in enterprise technology before the pandemic were leaps and bounds ahead of the digital laggards. According to EY’s 2020 Tech Horizon report, there are six behaviors that digital laggards should look to the digital leaders to emulate:

  1. Focus on the customer experience: Customer expectations are higher than ever. Good customer service is not a “nice to have” — it is essential. COVID has proven that customers dictate the speed with which an organization must transform, and digital leaders with a human-centric approach are developing experiences that prioritize customer needs over established business processes.
  1. Leverage AI to drive growth opportunity: Digital leaders investing in AI can align technologies to the areas of business that need improvement, such as operations or customer experience, and can then build solutions to address those needs, monitoring benefits over time.
  1. Encourage innovation via digital ecosystems and partnerships: Shared-service ecosystems and partnerships can create cost efficiencies, increase agility, and speed innovation; however, the benefit of an ecosystem or partnership directly correlates with how well the relationship between parties is managed. Digital leaders that have implemented successful ecosystems and partnerships are deliberate in building a relationship that provides value to all parties — internally and externally — and proactively engage in difficult conversations prior to signing on the dotted line.
  1. Nurture talent with new incentives and strategies: In the same way that digital leaders are approaching the customer relationship with human centricity, they are taking a human-centric approach to identify and address organizational skill gaps by creating a culture of continuous learning to maintain a competitive advantage.
  1. Activate governance plans for emerging technologies: Digital leaders exceed laggards by nearly 50% when it comes to considering and developing ethical governance plans for emerging technologies, such as AI or machine learning.
  1. Power innovation and agility by leveraging data: Digital leaders and laggards alike understand the value of data analysis and insights to increase speed and innovation – but leaders are putting data at the core of their business, instead of moving it from operations to a data warehouse or data lake and re-operationalizing it.

What does all of this mean for organizations late to the digital transformation party? Well, it’s a question of leadership. Organizations considered digital laggards need leaders who are unafraid to quickly assess the needs of the business, will courageously jump into compressed transformation, and understand that sometimes multiple parts of the business need transforming at the same time and that the transformation of some processes must build on each other.

Accenture, Your Legacy or Your Legend?
EY, Tech Horizon: Six habits of digital transformation leaders
TechHQ, Three traits of digital transformation leaders – budgets don’t matter

This article is also featured on PharmaLive.