The role of digital competence in digital transformation
Everybody talks about digital transformation, but how can you be sure it’s working for your company?
In other words, how do you ensure you’re getting the business performance you expect from your digital investments?
This is where digital competency comes into play. This is how you translate the vague promises of digital transformation into on-the-ground, bottom-line digital performance, which in turn drives business outcomes that can make a real difference to your enterprise.
What are digital competencies? They are a whole spectrum of technology skills and processes you need to master to compete in the new economy. Digital competence includes everything from IT infrastructure automation and modernization to digital product and service innovation to digital talent management and much more.
From digital competence to business performance
Hundreds of respondents to a recent Economist Intelligence Unit survey said that 80% of digital competencies matter for the business, and two-thirds said that they’re producing positive business outcomes—such as faster speed to market, greater agility and innovation, more revenue, bigger margins, and perhaps most important, a better customer experience.
In fact, delivering a great experience for users—including both customers and employees—has become a reliable predictor of great business performance. For example, one study showed that improving UX by as little as 1% can lead to a 100X boost in business growth. A poor UX, on the other hand, can have the opposite effect. For example, the Aberdeen Group found that just a one-second delay in page load times leads to 11% fewer page views, 16% lower customer satisfaction, and a 7% loss in customer conversion.
Across cultures, there is a common desire for a simple and streamlined user experience. That’s why many companies are setting up internal app stores where employees can go and get what they need to be productive at work. I believe that more enterprises should start asking their employees, in effect, “how would you like to work?” and then try to deliver that experience.
Closing the gap between IT and other teams to improve digital competence
Still, building a great user experience—and developing other digital competencies—is harder than you think. The Economist survey, for example, revealed that misunderstandings between the IT department—which often plays a leading role in developing digital competencies—and other parts of the organization remain a stumbling block. In many cases, IT tends to overestimate the readiness of non-IT folks, while business leaders tend to assume that IT understands the business perspective. In the survey, nearly two-thirds of respondents said that poor communication between IT and other departments limits their organizations’ digital competencies. About 61% of IT people said their non-IT leaders do not understand the technical complexity of digital systems.
I believe IT leaders should take the lead in closing the communications gap. CIOs can start by forging a closer partnership with the CEO and helping to define their company’s business and technology strategies. In my opinion, the CIO should think and act more like the CEO. This will require tech leaders to learn another competency: translating the technology aspects of digital transformation into the business language that CEOs and board members can relate to.
That may explain the trend towards appointing chief digital officers, or CDOs, who are not only responsible for overseeing back-office IT tasks, but who also set the vision for and lead the company’s digital transformation. That’s one of the most important digital competencies you can have.