Leadership crisis in digital transformation 

Half of companies are failing to execute on their digital transformation strategies, according to a study of 500 senior executives.

The research, by Wipro Digital, found that while 91% of executives are aligned on what digital transformation means, only 4% realise half of their digital investment in under one year.

The majority of respondents said it has taken their company two to three years to see at least half of these investments come to fruition.

Rajan Kohli, global head of Wipro Digital, said a ‘leadership issue’ has left companies short of achieving their intended ROI of digital transformation projects.

“Real digital transformation occurs when courageous leaders align goals in practice as well as theory, manage opportunity more than risk, and prioritise the future versus retrofit the present.”

>See also: New tactics for an old problem: digital transformation for the UK economy

Wipro Digital highlighted five ways in which it research identified leadership issues as a key factor in the widespread stall in digital transformation efforts.

1. Companies are aligned on what digital transformation means in theory, but not in practice

Some 91% of executives said their company is aligned on the definition of digital transformation – yet one in four noted that a key obstacle to success in their strategies was a lack of alignment on what digital transformation actually means. The lack of a clear transformation strategy was similarly cited by 35% of executives as a key barrier to achieving its full digital potential.

2. Underlying doubts among leaders

Nearly one in five senior executives admitted they secretly believe that digital transformation projects in their company are a waste of time.

3. Leadership mindset and skills challenges

CEOs, CTOs and CIOs are almost equally likely to serve as the primary driver for digital transformation strategies, and they are at least twice as likely to do so than any other senior executive. Yet mindset and skill challenges, such as resistance to introducing new ways of working (39%), and feeling overwhelmed by digital complexity (40%), were cited as the top two leading obstacles preventing a company from achieving its full digital potential.

4. Focus on back-end benefits versus product innovation and growth

Back-end departments such as operations and IT are by far the leading beneficiaries of digital transformation strategies. Combined with procurement and finance, they are cited by 60% of executives as reaping the benefits. Far less likely to benefit are departments such as product development (15%), marketing (13%) and sales (10%).

5. IT investment by executive versus ownership

CMOs are spending more than ever on IT – yet they are the least likely of any senior executive (2%) to drive digital transformation strategies. Chief digital officers fare little better, driving just 12%. Findings correlate with the fact that nearly one in four executives said a key obstacle to success is that their company’s structure hasn’t changed to reflect digital imperatives.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...