Legacy mindset, not systems, the biggest digital transformation nightmare
KEEPING pace with changes in the digital world isn’t easy for most organizations, but the reality is customers are demanding digital transformation and businesses need to deliver.
According to a recent study by EY, the biggest challenge to digital transformation isn’t legacy systems; it’s the legacy mindset.
The report, although specifically addresses the pain points of the insurance market, is quite interesting and widely applicable. A legacy mindset is indeed the biggest obstacle to digital transformation, irrespective of the industry or size of the company.
“The insurance industry is evolving rapidly, with many innovative ideas and technologies increasing transparency and enhancing customer experience. However, most insurers still operate their policies, commissions, claims and finance systems on mainframes, making it difficult to harness emerging technologies,” says the EY report.
However, the same is true for companies in the retail, consumer packaged goods, consumer electronics, or heavy manufacturing industry.
Those manufacturing food products or hand blenders, for example, have a lot of data and with a few minor changes to their product, packaging, and supply chain, can collect even more relevant data about their end users.
This data can then provide insights to help make smarter decisions for the future, build intelligence systems to turbocharge tomorrow’s business models, and accelerate the journey to a delightful experience for customers and end users.
Unfortunately, as EY pointed out, most are dragging their feet on the changes that are needed to drive these transformations and push the organization further up the digital maturity curve.
The reality is that organizations lagging behind on digital readiness have nobody to blame but themselves.
Most have the resources needed to drive the digital transformation they need, especially in the industry that they’re in — but a legacy mindset votes against the change in organizations that allow it — dragging the organization behind competitors who adopt a more agile, digital-first mindset that isn’t afraid of change.
“Culture is the most important factor, way more important than technology,” said Forrester Principal Analyst Thomas Husson in a recent blog post on a similar topic.
Husson’s post was cited Telecom Operator Orange’s CEO Stéphane Richard, “I don’t need a CDO; digital is the responsibility of each of the members of my executive committee.”
Further, an official BCG blog post recently reported pointed out that it had studied roughly 40 digital transformations and found that the proportion of companies reporting breakthrough or strong financial performance was five times greater (90 percent) among those that focused on culture.
The reality is, digital transformation is key to every organization. It’s what customers demand, and it’s what will help bring in the efficiencies needed to compete in the global marketplace that we now trade in.
For those that set out on the journey, success will come if a digital-first mindset is adopted.
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