Although businesses acknowledge the disruptions digital technology will bring them, digital is still not driving business strategy, concludes a report entitled "The State of Digital Business in 2014" that is to be released this week by Forrester Research.
While 74 percent of business executives surveyed say their company has a digital strategy, just 15 percent believe their company has the capability to execute the strategy. "Despite the threat of disruption, digital is not yet driving business strategy in 2014. Only 34 percent of executives in companies with more than 250 employees see digital technology as a major driver of business strategy. Forrester expects this number to climb significantly as more and more firms feel the impact of disruption in their markets," the report states.
Forrester believes every business needs to transform into a digital business, in which digital technologies are exploited to find new sources of value for customers and increase operational agility. Successful digital business transformation requires a CEO's full support to drive investment priorities. But few CEOs set a clear vision for digital, Forrester said. Outside of the business's digital team, few executives understand their firm's digital strategy. "Given the confusion around strategy, it is perhaps unsurprising that many executives report that their firms are woefully unprepared to deal with the digital onslaught."
CIOs and CMOs need to improve their teams by hiring digitally skilled employees, and CIOs must embrace digital as a core technology imperative, Forrester said, but organizational barriers will limit digital effectiveness. "As we've seen earlier, responsibilities for digital are spread between marketing, IT, e-commerce, and digital revenue teams. Even without full responsibility, multiple teams are involved in making digital strategy work in the organization," Forrester said. "The degree to which these teams work well together influences digital business success. Unfortunately, in 2014, very few executives see all the players working well together."
Marketing dominates digital responsibilities, such as social media marketing, social CRM, and customer analytics, but marketing does not pay much attention to how digital can transform business operations. Forrester did find that 86 percent of firms have a dedicated digital team handling employee digital engagement, digital media selection, and customer mobile app development. Digital strategy is significantly more important in industries learning to produce customer value from data. Telecommunications has led the way, while education and social services will be the next sector to go digital.
Forrester fielded survey results from November 2013 to January 2014. While the survey was fielded to 1,591 Russell Reynolds Associates contacts, respondents were screened to make sure they met certain standards in terms of job responsibilities and organization size. Russell Reynolds provides executive search and assessment services.
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