The document discusses 10 common myths about digital transformations. Some of the key myths addressed include: 1) Digital transformations are often viewed as externally focused when they also require internal changes. 2) Many see it as a technology change when it is first a strategic and business model change requiring a balance of investments. 3) Speed is important but industrial companies cannot transform at the speed of startups or digital natives. 4) A digital transformation cannot save a business with a broken model and requires cash, resources, and fixing structural issues first. The author recommends candid discussions to avoid these myths and get started by reinforcing core operations with digital tools while exploring innovations, with the key being careful design

1. TECHNOLOGY AND IIOT
Gold Rush or Fool’s Gold? 10 Digital Transformation Myths
Keep these misconceptions in mind as you explore the IIoT’s wide-
open spaces.
Stephan Liozu | Aug 14, 2019

2. Data is the new gold. The current digital revolution is a gold rush. Thousands
of firms are launching comprehensive and expensive digital transformations
with the hope of finding a significant gold vein. As in any gold rush, there will
be winners and losers. A tiny fraction of these organizations will show
successful and significant success from their digital transformations. Others
will learn from the process and still benefit internally from large-scale digital
investments. Right now, though, we are still in the midst of the rush, and
everything looks shiny indeed.
As in any gold rush, there are beautiful stories and anecdotes of companies
striking gold. For every one of these stories, there are dozens of failures and
false starts reinforced by a series of myths. I list a few a below that I have
found working and interacting with industrial peers.
Myth #1: A digital transformation is an externally focused
transformation. Digital transformations are focused on delivering digitally
driven innovation to customers and markets. That is true at least on paper
and in the strategy-building process. However, a digital transformation
cannot be successful without the right digital tools internally. That implies
that, for the sake of execution and value capture, an internal digital
transformation must also happen. This is a duality that is hard to grasp at the
executive level. It is much jazzier to invest in an IoT platform than to deploy
an internal sales enablement platform.
Myth #2: A digital transformation is a technology transformation.
This is the most prevalent myth in industrial markets. Most digital
transformations are led by engineering and technology folks who have very
little knowledge of marketing and business models. As a results, firms fall
into the 90/10 trap: 90% of investments, attention, and resources are in IT
and technology and 10% are going to marketing. This is deadly. A digital
transformation is first and foremost of strategic and business model

3. transformation. It needs to be led by strategy and marketing. In practical
terms, it means that your Chief Digital Officer must be a marketing expert.
Then, there needs to be a balance of investments: 50% in marketing and 50%
in technology.
Myth #3: You can execute a digital transformation at the same
speed you would deploy innovation in your legacy business. Speed
is the new currency of business. In the digital space, that speed is supersonic.
Nimble start-ups and digital natives go to market fast and take much more
risks than industrial natives. I often say that it takes 90 days for an
industrial native to get a workshop organized. It takes a start-up 90 days to
conduct a go-to-market sprint.
Myth #4: A digital transformation on top of a broken business
model or strategy is going to save the business. There are probably
good ways to turn around a business or a division in the event of a broken
business model or disrupted strategy. A digital transformation is not one of
them. It requires large investments and a significant portion of the
organization’s bandwidth. Without cash and resources, it is a lost cause and
it will distract the organization from fixing the structural issues in the core
business.
Myth #5: You can digitally transform without marketing maturity
and customer intimacy in the core business. Simply said, if you do not
have the right marketing and customer maturity in the core business, you
will not be successful in your digital transformation. Most industrial natives
lack deep customer intimacy and lag behind in digital marketing
investments. A lot of them still rely on channel partners to manage the
customer relationship. Without customer data, it is hard to develop digital
innovations. It is imperative to invest very quickly in the right marketing
tools and to gather the customer intelligence that is languishing in people,

4. laptops, static PowerPoint slide decks, and forgotten SharePoint sites. And
by the way, if your core business suffers from a deep gap between sales and
marketing, your digital transformation might be rocky.
Myth #6: I can package current digital pilot projects into a
transformation. A digital transformation is a comprehensive set of
transformational programs and investments carefully designed to support a
strategic agenda. It is not the packaging of a few connected products and
software into a digital umbrella. A digital project or two do not translate into
a deep digital transformation. I have visited dozens of web sites of industrial
firms, and I find this is often the case. Some industrial groups have also
acquired a few software companies and have called themselves “digital
champions.” Finally, there is a perception that opening a digital factory or an
incubator can be called a digital transformation. It is part of it, but not all of
it.
Myth #7: You can make money and produce industrial unicorns
overnight. Every industrial company wants to become the go-to platform
for their industrial ecosystem. They often underestimate the time it takes to
get to unicorn status. They may refer to Uber, Airbnb, and Amazon to
describe their aspirations, but forget to mention that these businesses have
been around for over 10 years and have lost significant sums of money to get
there. And they still lose significant sums today. In digital, competition is
fierce and a lot of the value chains have already been commoditized.
Executives cannot have the same EBIT and cash flow requirements in the
digital transformation that they apply to the core business. It is going to take
some exploration, experimentation, and losses along the way.
Myth #8: You can take people from your core business and turn
them into digital champions overnight. Naming divisional and
functional digital champions and digital product owners is a first step. The

5. next step is to invest heavily in upskilling and reskilling them as soon as
possible. That means that your digital academy or other digital learning
infrastructure needs to be in place before you start your digital
transformation, not two years into the transformation. People do not acquire
skills magically overnight. Reading a book and attending a conference is not
going to cut it. You need sustained action learning. By the way, the HR
strategy of plugging holes with available people and B-players is also a bad
idea. Digital transformations require the best of the best dedicated to their
journey.
Myth #9: If you are a product-driven company, you will have an
easy time becoming solutions-oriented in digital. If you have been a
product-centric industrial organization for decades, your organizational
mindset is that of a product company. You might have some service
departments embedded in your product divisions, but chances are they are
fragmented and not coordinated. A digital transformation requires a service
mindset. If you do not have that, you cannot hope to go from product
centricity to solution centricity in a couple of years. It is going to take a
decade. If your organization is already organized for services and complex
system delivery, then you have a greater chance of success. You need to crawl
before you can run. The sequence is from products to services to connected
services & products, and to product-as-a-service (PaaS). That transition
takes time.
Myth #10: You can scale your digital innovation and startups with
traditional legacy back-office. Do you think that your IT, finance, and
sales team are going to embrace your digital innovations and programs with
open arms? Think again. Someone needs to worry about the integration of all
these innovations and technologies in the core infrastructure and back office.
This is where lots of digital projects get stuck and killed altogether. Culture
does matter. Running a digital transformation as a shiny and trendy project

6. Source URL: https://www.industryweek.com/technology-and-iiot/gold-rush-or-fool-s-gold-10-digital-
transformation-myths
managed by young folks in jeans and flip-flops reinforces silo thinking,
generational cleavages, and turf wars. You think I am kidding? Try to
convince IT to integrate an open-source IoT digital platform into a highly
secured optimized IT network. Similarly try to get finance controllers to
change their KPIs for success for a SaaS opportunity that is going to be cash
flow negative for 5 years!
Most consulting and industry reports note that over 85% of firms have
started some type of digital transformation. The gold rush is a reality! Before
jumping on the bandwagon and committing significant investments to a
digital transformation, I strongly recommend candid C-suite discussions
around these 10 myths. Most of these potential issues can be avoided in the
design phase of the transformation even if you have already gotten started.
My recommendation is to get started by reinforcing the core and back office
with the right digital tools while exploring digital innovations in the market.
The key to success is in the design and road-mapping of your transformation.
Stephan M. Liozu , Ph.D. is chief value officer at Thales Group and founder
of Value Innoruption Advisors , a consulting boutique specializing in value-
based pricing, digital pricing, and industrial pricing. He is the author of
nine pricing books and is a frequent keynote speaker at industrial and
digital conferences.