Many organizations are operating in a similarly disruptive digital environment: economic headwinds,ⁱ rapid tech consumerism (i.e., generative AI),ⁱⁱ evolving tech policies,ⁱⁱⁱ an expanded workforce ecosystem,^iv and a push for sustainable, ethical tech.^v In this market, digital transformation can be high-stakes often with pressure to gain value from related investments. 

Many organizations view “digital change” as part of the value equation, but often think it’s just about change management. Building a true digital change capability is about so much more. Digital change includes the strategy for rearchitecting work, engaging the ecosystem to unleash the power of the workforce, and redesigning the organization for hybrid work with the right mindset, skills, agile practices, and measures.^vi

These efforts are tied to many digital initiatives – and can be a make-or-break factor in successful digital transformations. When these capabilities are aligned with digital strategies and technology investments, organizations report as much as a 14% market cap differential as compared to when they’re not. ^vii That equates to approximately US$2.75 trillion for Fortune 500 firms alone. However, embracing change for change’s sake is not the answer: organizations focused on change alone report three times less market cap than with only a digital strategy. (figure 1)

As leaders calibrate their digital change capabilities, Deloitte Global analysis of 4,600 companies’ 10K filings and financial statements over the last five years underscores which digital change themes are trending up and down across a “digital change” agenda that is only continuing to grow in prominence, breadth, and importance.^viii As the data shows, getting digital change right matters, validated by the notable possible lift in market cap if done right and potential damage if done wrong. 

The digital change agenda is getting bigger
 

Over the period from 2016-2022, digital change capability keywords appeared over 600 times in the business filings Deloitte Global analyzed. Our analysis found that 55% of the digital change keywords trended upward, 31% remained static as persistent priorities, and only 13% decreased. (figure 2) 

This demonstrates that digital change capabilities continue to have a prominent place on business leaders’ core agenda – an agenda that is only getting bigger among the set of companies and statements reviewed during this analysis.

Digitization dominates over transformation
 

As shown in figure 3, the top trends related to digital change^ix have remained consistent over the last six years, with each topic analyzed growing in importance. (figure 3)

The greatest frequency of digital change terms has been related to digitizing the customer relationship (which showed a +253% increase), operations in relation to disruptive technologies, (a +168% increase), and operations that businesses can digitize (a +135% increase). Yet, what’s missing here is a focus on transforming those same customer experiences and operations. This is where leaders have an opportunity to better use digital change as a lever of their technology strategies and investments. 

Given the recent attention on Generative AI solutions that can operationalize content creation across audio, text, and video formats, this research asserts that digital change capabilities are essential. The right mindset and approach to the operating model, organizational design, skills, and workforce will likely continue to be driving forces of value now and into the future. 

Beyond the trends detailed in figure 3, each of the top 25 themes analyzed for 2017-2019 remained top trends from 2020-2022 and displayed a continued upward trajectory. Leaders, therefore, should take action to ensure they’re intentionally aligning digital change initiatives with their overarching digital strategies and technology investments accordingly.

High-tech, sustainable and data-driven
 

While the increasing of frequency of digital change terms predominantly aligned with a consistent set of keywords, we found several sets of keywords that were previously less prominent starting to trend upward in the rate they’re mentioned.^x (figure 4)

The most prevalent of these is bringing together organizational transformation and technology transformation in IT. Other prominent focus areas include tech-enabled and high-tech approaches, ESG, data, and agility related to efforts to digitize, microservices and customer service, and IP in relation to disruptive technologies. These topics are increasing at a rate of as much as 2300% as new topics emerge that require leaders’ attention. (figure 5).

Leaders’ ability to ingest and address these new topics on top of an already robust digital agenda may dictate whether they’re able to implement change programs effectively. Particularly as pace of change shows no signs of slowing down.

We can see a slight downward trend related to topics like:

• Wearables in relation to emerging technologies (-86%)
• Software-enabled in relation to technology powered (-83%)
• Sprints in relation to customer service (-76%)
• Internet-enabled in relation to customer service (-70%)

Given more topics are being added to the digital change agenda than removed, leaders likely won’t experience much relief, and should therefore find ways to work across functions to connect the dots across these matters.

Digital change levers for leaders
 

Regardless of an organization’s size, digital transformation and a strong digital change capability to drive the organization’s strategy and tech investments are considered essential. 

• Bring Strategy and IT closer together with a hub and spoke model – and use digital change capability as a force to turn the wheel: given that digital change drives value but can also deter it, getting that alignment right is a foundational starting point. 
• Break organizational inertia: larger companies in our analysis (with a market cap of over US$10B) especially benefited from the tech aligned to strategy scenario – catalyzed by a strong digital change capability. Perhaps this is because larger organizations with greater legacy technology dependencies may have greater investments and more value wrapped up in core IT modernization, with the potential to significantly elevate the organization. As a larger pain point, there could be the potential for greater reward. On the flip side, the digital change required for these organizations could also be far greater given their size and complexity, making it more difficult for them to capitalize on the digital change scenario as compared to smaller organizations.
• Calibrate to compete at scale: organizations under US$5 billion in market cap were also found to be more susceptible to the risks and effects of value erosion associated with digital change.^xi They may more easily succeed at digital change because operating model, ways of working, Agile and other digitally aligned changes can be easier for them to make; Yet leaders should understand that where a smaller size might be an advantage, it could also put them more at risk when they’re missing the right tech strategy to compete at scale. 
• Experiment to learn: the way to begin the digital change journey is to start making changes, see what works for the organization and its customers, and then iteratively adapt. Experimentation allows for iterative change and that slowly and incrementally builds over time. A recent Deloitte report shows that big bold change can be the result of many small incremental changes over time.^xii

Making or breaking digital value
 

As leaders look for numbers to give them confidence in their digital transformation decisions, all things are rarely equal. Therefore, organizations should look beyond the number to understand what is possible, what is probable, and ground their decisions based on their own potential. There are many roads to value and an organization’s ability to navigate that digital change effectively is the difference between the right path and the wrong one.