Digital Transformation Journey
08 October 2021
We’ve said it before: The middle market needs its own digital transformation playbook. Large enterprises can plumb their deep coffers to make massive digital investments in ambitious, high-risk/high-reward initiatives or fund pet projects that may never see the light of day.
On the opposite end of the spectrum, the startup world offers valuable lessons in lean innovation and agile ways of working, but it’s worth noting that 90 percent of startups fail in their first three years. Even those that survive can’t be compared directly to middle market companies, which simply have different capital structures, operations, and goals than those of their (often) leaner, nimbler counterparts.
We’re realists in BDO: Most middle market organizations don’t have the luxury of making significant upfront investments in a strategy that may or may not pay off until three or four years down the line, or the ability to move as quickly as a younger venture. But in this age of accelerating disruption, myopia is arguably the greater risk. Middle market incumbents stand on a digital precipice where action won’t always clinch success, but inaction all but guarantees failure. The challenge is toeing the line between risking too much and not risking enough.
Ultimately, the middle market’s road to digital transformation is rooted in balancing smart risk and reality, where short-term priorities are addressed in the context of the long-term vision. The journey is one of incremental improvements to advance digital capabilities and maturity. Every increment along the journey is framed against a clear business case and immediate ROI.
As we walk through a step-by-step approach to digital transformation in the middle market, keep in mind that these are meant to be broad brushstrokes. The middle market spans all industries, each in varying states of disruption and stages of digital maturity. The extent to which a business will need to play catchup is highly industry-dependent, as is the level of urgency with which they need to make moves. And because the underlying value drivers and forces of market disruption are fundamentally different in every industry, so are the digital strategies to remain competitive in the future.
Follow BDO's 10-step path to digital transformation in the middle market.
Source BDO Digital