The 5 main clusters of digital transformation optimization

As digital technologies dramatically reshape every industry, many companies are pursuing large-scale change efforts to capture the to the benefits of these trends or simply to keep’s pace with competitors. McKinsey & Company’s report illustrates what makes a successful digital transformation.

In a new McKinsey Global Digital Transformation Survey, more than eight out of ten respondents say their organisations that their organisations have undertaken such efforts in the last five years.

McKinsey therefore outlines 21 best practices that make digital transformation more likely to succeed. These fall into five categories: leadership, capacity building, empowering workers, updating tools and communication. In practice, they suggest where and how companies can begin to improve their chances of making successful digital changes to their business.

What makes Digital Transformation really work

Years of research have shown that the success rate of these efforts is consistently low: less than 30% are successful. This year’s results suggest that digital transformations are even more difficult. Only 16% of respondents say their organisations’ digital transformations have successfully improved performance and equipped them to sustain long-term change. Another 7% say that performance has improved but that these improvements have not been sustained.

Success rates also vary by company size. Organisations with fewer than 100 employees are 2.7 times more likely to report a successful digital transformation than those in organisations with more than 50,000 employees, possibly due to the so-called elephant syndrome.

Fewer than half of the companies surveyed say their goal for implementing digital transformation was to launch new products or services or to interact with external partners through digital channels, and eight out of ten respondents say their recent change efforts have involved multiple functions or business units. On average, respondents say their organisations are using four of the 11 recommended technologies in their digital transformation processes.

At the same time, the results of successful transformations show that these organisations employ more technologies than others, in fact organisations with successful transformations are more likely than others to use more sophisticated technologies, such as artificial intelligence, the Internet of Things and advanced neural machine learning techniques.

The Pillars of a Successful Digital Transformation

The research points to a number of factors that could improve the chances of a successful transformation. These are the factors that have the greatest impact on the success of the process: