What Drives Digital Transformation: Technology or Strategy?

08/25/2015 11:58 am ET Updated Aug 25, 2016

Often when we talk about digital transformation, we are focused on technology. With technology changing so fast, it is easy to think that it alone is the biggest driver of digital transformation. As tech continues to thrive, so must companies. This used to be a common equation. However, a recent study by MIT Sloan and Deloitte discovered that it may not be technology, but rather strategy, that helps create digitally transformed companies.

The study also separates digital leaders from the rest of their C-suite peers as people who can best digitally reimagine the business. If you ask me, these "digital leaders" are the chief data officers--those who unite the CEO, CIO, and the CMO through their knowledge and vision of what it takes to make a digitally transformed business a reality.

Leadership is the basic ingredient for digital success
Does this mean technology doesn't play a part? Not at all. In fact, because technology aligns so closely to strategy, we can't ignore it. However, it is still strategy behind the greatest successes in digital transformation. The MIT study stated that "the strength of digital technologies--social, mobile, analytics and cloud--doesn't lie in the technologies individually. Instead, it stems from how companies integrate them to transform their businesses and how they work."

In an article published in the Harvard Business Review last year, Leading Digital: Turning Technology into Business Transformation, authors Didier Bonnet and George Westerman touched upon a similar idea. Though they stressed the need to have better managers to deal with digital transformation, it really comes down to how well those managers are able to bring about the desired changes. The article outlined several key aspects digital leadership teams must focus on, including:

Adopting a transformative vision of how your company can stand out among the digital crowd.
Engaging employees to work towards the vision while redefining the work process.
Breaking down the silos at the leadership level.
Interestingly, leaders don't have to be tech wizards themselves, but they do need to understand how technology can change the business space. Managers also need to understand how the current work culture can spark--or douse--further digital transformations.

By now you must have figured out that we are looking at what seems like two sides of the same coin. Good strategies always stem from good leadership. It's impossible to have the first one without having the second.

Is it technology, strategy or both?
Truth be told, it's difficult to deny technology's transformative powers. In fact, you could make the case for technology being the business world's biggest disrupter.

We may argue that technology is going to drive shorter and shorter business strategy life-cycles because as new tech arrives at a rapid pace, strategy must be adjusted quicker to stay on course. For instance, the jump from desktop, to laptop, to mobile devices, and now to wearable devices has been a phenomenal one and businesses had to make big strategic changes to work in these tech transformations. In this case, technology drives the need to have all those strategies in the first place.

Let's look at the same case from the other side. Many businesses are still struggling to shift to a mobility-centric mindset. Why is that? Here's the answer: Lack of proper strategies, as well as the leadership vision to drive those strategies. It's not enough to simply adopt digital initiatives, company leaders need to manage and inspire to truly bring about the transformation.

So it boils down to this: Technology and strategy are two factors that are inextricably linked and for an organization to transform digitally, need both to act in tandem.

What do you think? Does one hold more sway over business in your opinion? Do you have digital strategies firmly in place? If not, why not?