U.S. Businesses Lean Too Heavily on Technology in Digital Transformation Decisions

Estimated reading time: 2 minutes

Leading telecommunications and information services company, Telstra, has released findings from its Disruptive Decision-Making research, which surveyed 3,810 senior decision-makers from 12 industries in 14 markets around the world to uncover insights into strengths and weaknesses around digital transformation decisions. The research showed US businesses over-emphasized the importance of technology understanding as a differentiator for digital transformation decisions, and didn't focus enough on people, processes and partnerships to successfully respond to increasing digital disruption.

Telstra's President for the Americas, Nicholas Collins, said the research showed a clear opportunity for US organizations to focus on the role of their people in driving digital change.

"Technology alone is not a silver bullet for digital transformation. While investing in the right technology is crucial, placing too much importance on the role and performance of technology in digital transformation is a barrier to success," Collins said.

"Successful digital transformation relies on more than the right technology, it requires the right culture, the right people—and the right processes to support them. The research results back this up. Globally, organizations that focus on multiple elements of digital transformation decision-making, including people and processes, are significantly more likely to be digitally mature (45%) and make excellent decisions (52%). By comparison, companies focusing on technology alone show less progress."

"Digital transformation must be a whole-of-company journey that involves upskilling and changing employee mindsets, adapting structures and ways of working, and creating teams that can maximize the new technologies being introduced."

The research found that while US organizations are increasing their investment in digital transformation, many businesses struggled to show the financial impact of their efforts. More than a third of US businesses invested more than $1 million in digital transformation products and services over the past year (35%), while one in six spent more than $5 million (16%).

This figure is set to increase as a third of US respondents said their company's total spend on digital transformation would grow by more than 10% in the next three years (33%).

However, showing 'hard outcomes' such as financial returns of this investment was more difficult. American companies found that, of all the business outcomes surveyed, increasing profit margins scored the lowest in decision-making effectiveness in the US—followed by increasing revenue growth and streamlining business costs.

"Measuring the progress and success of any digital transformation strategy or individual project is an absolute essential. But the metrics by which we measure success are just as important," Collins added.

"The lack of hard outcomes for US businesses highlights the need for an equal focus on the role of people, processes and partnerships, as well as technology in digital transformation journeys. Businesses can only deliver the full benefits of digital transformation if their people understand the technology capabilities and are trained to maximize them, there are the internal processes to optimize the experience, and the right partners are in place to support the business where required."