The Key Role of Internal Transparency in Successful Digital Transformations

The business community has discovered through recent testing that achieving digital transformations can be more challenging than traditional changes. However, companies that are deriving value from digital advancements point to one critical factor for success: internal transparency.

Gartner forecasts an 8.4% increase in IT spending from 2020, reaching over $4.1 trillion by 2021. As organizations increasingly rely on technology, the question arises – will the investments be worthwhile?

The Changing Landscape of Technology

Technology is no longer just a support function but a significant contributor to enhancing business outcomes. According to Gartner, digital initiatives will be increasingly categorized as costs of revenue or goods sold. Merely introducing new technologies is insufficient for impactful digital transformations. What is essential is providing real-time IT spending information across all levels of the organization and enabling budget adjustments as needed. Transparency emerges as a crucial element in defying the odds.

Previous Insights into Digital Transformation

Past articles have explored strategies for orchestrating a digital makeover, the significance of a digital vision in overcoming obstacles, and the expected returns in the digital era. In this piece, the focus shifts to how enhanced visibility during transformation can significantly enhance outcomes and accelerate achievement of milestones.

Challenges in Digital Transformation

Despite the buzz surrounding digital transformation, success rates remain low. Studies consistently show a significant gap between the high expectations and actual outcomes. McKinsey’s global research indicates that while 80% of organizations are engaging in digital transformation, only a fraction are reaping the anticipated business benefits. Bain’s findings reveal that a mere 8% of companies have realized returns from their digital initiatives.

Secrets of Successful Technology Leaders

Contrary to popular belief, there is no magic formula for successful digital transformation. The key lies in viewing digital transformation as business transformation. Successful leaders approach this shift with goal-oriented thinking, investment in new architecture and talent, and a transparency mindset.

Goal-Oriented Thinking

Leaders prioritize business transformation over maintaining legacy systems, focusing on investing in new products and services rather than overspending on outdated technologies.

Investment Mentality

Leaders prepare their teams and systems by making them agile, modernizing architecture, and bringing in fresh talent to drive digital transformations effectively.

Transparency Mindset

Successful leaders maintain full transparency over IT budgets, ensuring real-time access to spending information for all stakeholders. This open approach to technology spending sets them apart and enhances the success of their digital initiatives.

The Significance of Transparency in Digital Transformation

Leaders who champion transparency gain a deeper understanding of IT budgets, enabling them to make informed decisions that maximize value. Transparency fosters accountability, accelerates decision-making, and promotes collaboration across departments, leading to more effective technology spending.

Optimizing IT Spend through Transparency

Transparency dismantles traditional silos, promoting open communication and shared responsibility. By providing real-time data, adopting a product-centric view of technology spending, and fostering a culture of shared accountability, organizations can optimize their digital transformation efforts.

Case Study: Transformative Power of Transparency

A global airline implemented a three-step transparency strategy to align technology spending with business goals, identify cost-saving opportunities, and drive revenue generation.

Recommendations for Business Strategists

Successful digital transformation hinges on leadership support and a commitment to transparency. By refocusing conversations on the role of transparency, developing talent, engaging key leaders, and investing in the right tools, organizations can drive successful digital transformations.

Transparency serves as the foundational step towards successful digital transformations, enabling leaders to gain insights, make informed decisions, and drive value creation effectively.

For more insights on digital disruption success stories and strategies, explore TSI Insights.