Digital transformation has taken the spotlight in recent years, and this focus has come into sharper relief as organizations transition to virtual models. Companies are eager to adopt the latest technologies, apply advanced analytics, and leverage data to enhance performance and drive business success. While the technological elements necessary for successful digital transformation have been explored deeply, less attention has been paid to the cultural changes required to drive this evolution. In practice, many organizations find that the cultural elements of digital transformation are the most difficult to introduce and enforce.
Our research has shown a powerful correlation between a company’s technological maturity or tech intensity and its business performance. Our work surveyed over ~130 firms across major verticals, including manufacturing, financial services, healthcare, retail, and software. We categorized these firms on a spectrum ranging from digital “leaders” to “laggards” by evaluating them on 100+ characteristics characterizing their technology adoption (e.g., data platform architecture) and capabilities (e.g., support of citizen developers). We found that tech intensity impacts both 3-year revenue CAGR and 3-year total enterprise value CAGR, with digital leaders outperforming digital laggards on these measures and others.
As might be expected, many leading firms are digital natives who started from a clean technology slate. We found, however, that leaders were also often large traditional enterprises who had successfully digitally transformed. Laggard firms, in contrast, are characterized by legacy infrastructure and practices and face a variety of challenges as they adapt to compete.
This paper aims to understand the cultural elements of these organizations. We present insights based on conversations with a subset of digital leaders and laggards, exploring the relationship between these firms’ data cultures and their technological maturity. Our research finds that certain behaviors, values, and beliefs play a significant role in determining where a business is today on the digital transformation spectrum.
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