Economic Growth

8 mistakes executives make when digitizing their business

Men are silhouetted against a video screen as they pose with Samsung Galaxy S3, Nokia Lumia 820 and iPhone 4 smartphones (L-R) in this photo illustration taken in the central Bosnian town of Zenica, May 17, 2013. REUTERS/Dado Ruvic (BOSNIA AND HERZEGOVINA - Tags: BUSINESS TELECOMS)

In most industries the transition from analog to digital is one of the biggest challenges facing business leaders today. Image: REUTERS/Dado Ruvic

Johnny Wood
Writer, Forum Agenda

Keeping a watchful eye on technical innovation is vital to develop a clear vision for the future of any business. But effective strategies for success depend on managers and executives avoiding hidden blind spots and investment decisions that obscure the way forward.

Last year, according to World Economic Forum figures, private sector global spending on digitizing business operations exceeded $1.2 trillion dollars, yet just 5% of executives reported being satisfied with the results.

In most industries the transition from analog to digital is one of the biggest challenges facing business leaders today. There are 8 common mistakes executives make.

Finding the best way from A to D

As with most human activity, planning is everything. The digitization process is a unique opportunity for executives to take a good hard look at their enterprise and ask some important questions: What digital activities are already underway? What will the industry look like in 5, 10 or 20 years? What strategies can the company employ to succeed in a digital future? What is the end goal of the transition from analog to digital?

Understanding where the business is attempting to go should help avoid some of the following bumps and wrong turns in the journey.

 Managers make these common mistakes managers with digitization
Image: WEF

Money talks

Most of the common mistakes executives make with the digitization process relate to investment.

Nearsighted investments focus too heavily on the short term, giving insufficient consideration to an organization’s long-term needs. While, farsighted investments focus on future needs with scant attention given to immediate development, which undermines current performance and impacts future goals.

Even when the current and future needs of a business are given equal consideration blind spots can occur, as parts of the business are overlooked by investment and turn into points of weakness that disrupt overall performance.

Putting a coherent strategy in place directs funding to areas of the business most in need. As well as scheduling where and when to invest, this strategy prevents executives making “scattershot” small investments without an overall funding plan.

Mind your own business

As each organization is unique, no two paths to a digital future are the same. The structure of a business can influence its digitization journey, with heavily centralized companies at risk of suffering from a rigid chain of imposing policy from on high.

Similarly, command structures that encourage parts of the business to operate as independent units, or islands, can duplicate investments which also duplicate costs.

Have you read?

Enabling change

Aside from investment decisions, another common area where mistakes are made

relates to the balance of resources and their application. A company’s data, technology, operating model and talent either work to enable digital progress or hinder it.

Some companies focus too heavily on building up these enablers, without considering if additional staff, technology and data capacity add value to the business.

Whereas, the digital transformation of other companies suffer from a lack of resources to accommodate spending on new business applications.

Title: The new digital reality

 85% of customer engagement will be digital by 2020
Image: WEF

The pace of technological change is impacting the business and social worlds faster than ever before.

A new digital reality is emerging where 85% of customer interaction will take place without humans and where 65% of today’s young will grow up and work in industries or jobs that don’t yet exist.

Companies that successfully bridge the gap from analog to digital are in prime position to fully embrace the opportunities offered by a digital future.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Stay up to date:

The Digital Economy

Related topics:
Economic GrowthBusiness
Share:
The Big Picture
Explore and monitor how The Digital Economy is affecting economies, industries and global issues
World Economic Forum logo

Forum Stories newsletter

Bringing you weekly curated insights and analysis on the global issues that matter.

Subscribe today

How can we transform the economic growth we have into the growth we want?

Council on the Future of Growth and 2023-2024

December 20, 2024

AI-driven growth: Navigating the path to new markets

About us

Engage with us

  • Sign in
  • Partner with us
  • Become a member
  • Sign up for our press releases
  • Subscribe to our newsletters
  • Contact us

Quick links

Language editions

Privacy Policy & Terms of Service

Sitemap

© 2024 World Economic Forum