Digital transformation might sound like the next major buzzword to follow in the footsteps of “blockchain technology,” however, digital transformation is so much more than a high tech sounding terminology.
Digital transformation is the use of new, fast-changing digital technology to solve problems in every aspect of life from tickets and reservations to baseball. Moreover, it often consists of cloud computing, reducing reliance on user-owned hardware but increasing reliance on subscription-based cloud services.
If this sounds complex, well, it is even more complex to implement. Incredibly, $1.1 trillion was spent on digital transformation last year, however, 84% of these projects failed, this is according to
Dharmesh Trivedi, Founder and CEO of DXFactor, a company that builds outcomes-focused digital transformation for Fast Growing and Fortune 500 companies using Business Model Transformation, Revenue Maximization Engine, and Measurable Cost Optimization. We reached out to Trivedi to understand more about DXFactor and this unique industry.
Dharmesh Trivedi, Founder and CEO of DXFactor
I understand that DX Factor is hoping to impact the Digital Transformation space with the delivery of the industry’s first “Outcomes Identifier.” Can you explain for our readers what the “the Digital Transformation space” consists of and what an “Outcomes Identifier” is?
Digital transformation is a practice that does not live in simply one space, or vertical. Digital transformation is a radical rethinking of how to use technology, people and processes which transcends every industry, company, market, government, and community.
Today, you won’t find a forward-looking enterprise that isn’t leveraging some combination of cloud, analytics, artificial intelligence and machine learning to better serve customers or streamline operations. Most companies are authoring their own digital journey, but most will fail and few will reap the benefits of their Digital Transformation strategy. Wipro Digital pointed this out in a recent study, citing that a majority of senior executives believe their company is failing in about half of their Digital Transformation initiatives. Forbes reiterates this, pointing to an 84% failure rate by companies trying to digitally transform.
A whopping $1.1 trillion was spent on digital transformation last year, but 84% of digital transformation (DX) projects have been reported to fail, resulting in $900 billion in wasted DX efforts. We noticed this incredible waste and were very puzzled by it, so we spent months analyzing thousands of DX use cases to find the root causes of these failures. Out of that analysis, we realized that at its core, digital transformation must be Outcomes Driven paired with external data in order to be successful. And with that realization, DXFactor was born!
We then developed our proprietary Outcomes Platform, which fuses client data with external datasets, then matches this with meta attributes from successful digital transformation use cases. Using this method, we ensure that businesses of all sizes can begin implementing digital transformation successfully, every time. Additionally, our data helps clients enforce a Customer Empathy model, in which they better serve their customers by knowing why they make certain decisions, instead of only knowing what decisions they’re making. By combining all of these factors, we can create an Outcomes Driven Economy, which will completely change the way our world works and benefit society in a positive and permanent way. In fact, our industry’s first outcomes approach has already generated more than $2 billion in direct outcomes for clients.
What inspired to DX Factor to create this “Outcomes Identifier”?
The inspiration to found DXFactor was birthed from the crazy goal of being the catalyst in the creation of an entirely new way of doing business, new way of doing digital transformation and ultimately an entirely new economy, which we call the Outcomes Driven economy.
As mentioned before, $1.1 trillion was spent globally on DX in 2018. But unfortunately, a large portion of that figure represents bad investments, driven by the misguided approach of “exponential experimentation” to push the digital agenda. The result, collectively, has been a “Pile of Massive Digital Failures.”
Puzzled by the breadth and depth of digital transformation failures causing the corporate world to fall into this crisis, four thought leaders came together to deeply study the root cause of both successes and failures in digital initiatives with proven backgrounds in leading successful digital transformations in different domains.
After studying thousands of digital transformation use cases across the globe and industries, a key factor rose to the top in every single successful transformation: At its core, DX has to be Outcomes Driven & Data Powered. An Outcomes Driven mindset needs to be ingrained into the culture, vision, mission, and most importantly, ongoing execution. It just can’t be a one time project or a Proof of Concept, what and how cannot be gut instinct or guesswork, one must leverage the data to prioritize, identify, and maximize the Outcomes.
These insights have led the founders to an audacious vision and dream of creating an Outcomes Driven Economy.
I also understand that DX Factor is in a position to deliver results that matter in an “outcomes-driven economy”. Can you explain what an “outcomes-driven economy” is and how it differs from a regular economy?
Executives are now focusing on digital transformation and outcomes-driven approaches — in fact, $1.3 trillion was spent on digital transformation last year alone. Quite frankly digital Transformation demands an outcomes-driven approach for results that matter.
In recent years, everyone has been talking about the gig economy and how it’s changing the way we live and buy things. In fact, nearly 40% of the American workforce now makes at least 40% of their income via gig work.
But this era will end as quickly as it began. In our current gig economy, 84% of digital transformation projects have failed to result in success, leading to over $900 billion dollars in wasted resources. Companies must start moving from the gig economy to deliver the outcomes that the gig economy has promised.
That’s why executives are now focusing on digital transformation and outcomes-driven approaches — in fact, $1.3 trillion was spent on digital transformation last year alone. Thus we are swiftly entering the Outcomes Driven Economy, where the companies and executives who deliver outcomes are the only ones who will survive.
On your website, its says DX Factor has “generated successful results for 1000s of companies identified through our proprietary Outcomes Platform.” Are you able to share some examples/case studies with us?
For more than 18 months our team came together to deeply study the root cause of both successes and failures in digital initiatives with proven backgrounds in leading successful digital transformations in different domains. What came from this deep dissection of digital transformation was petabytes of successful DX attributes, spanning across 1000s of digital transformation use cases, resulting in the creation of world’s largest library of successful digital transformation attributes in actionable and structured data format.
Below are some of the most telling failures I’ve seen-
Nike
In 2010 Nike created Nike Digital Sports as a new business unit designed to lead digital initiatives and create new technological capabilities within the company. The group followed up two years later with the Fuelband, a Fitbit like wearable that was very well received by consumers. However just another 2 years later, it discontinued the Fuelband and cut 70% of the Digital Sport team. This was due to an inability to leverage the data they had generated, create profit, or find skilled engineers. The remaining Nike Digital Sports team has refocused on software offerings. Nike’s Digital Transformation created a valuable outcome but it looks a large and inefficient use of resources to find that outcome, once again a failure to fully define desired outcomes when building a Digital Transformation strategy.
Ford
Despite 115 years of successes, Ford failed to implement a Digital Transformation initiative that the then-chief executive, Mark Fields, hoped would shift Ford into the space of “personal mobility.” This was to be achieved by a group called Ford Smart Mobility that was to develop innovative mobility solutions and digitally enhance existing products from an office thousands of miles away from Ford’s headquarters. This “separate and silo” approach failed to actively add any forward momentum to Ford or return any quantifiable value and was partly responsible for a nearly 40% plunge in Ford’s stock that precipitated the departure of Mr. Fields. Ford fell victim to a bandwagon and hype cycle and simply threw money at buzzwords without a defined set of objectives and outcomes.
Who do you consider to be your main competitors and how do you differentiate yourself from them?
The honest answer to this question is really not many. We haven’t just changed the game, we’ve redefined the game entirely. The Outcomes Platform is a world’s first undertaking, and it will be years until anyone catches up to what we have built and offer to clients. One of our clients has a great way to describe us, he said: “DXFactor is like Mckinsey in a box.” What this basically means is we have taken the very outdated, time-consuming, cost-intensive and outcomes-lacking process of legacy consulting models and totally transformed it using AI, machine learning, deep learning, augmented analytics and data science.
What are DXFactor’s main goals over the next 6 months?
- We are proud to announce that we are now moving out of our stealth mode, where we were only accepting opportunities from selected companies, and moving into full production mode making our solutions available to the world. Thus we will be hard at work expanding our footprint, onboarding clients, making the platform available to the world and building DX differentiated solutions that are outcomes-driven and deliver outcomes like never before.
We are also expanding our global presence with offices in Ahmedabad.
- We’re also expanding our sales operations to enter three new global markets in UK, Middle East, and Asia.
- We are launching digital transformation industry-specific platforms for the Health and Fitness industry and the Banking industry branded as DXFitness and DXBanking.
- We are planning to hire 200+ employees and we are deciding to stand up our official worldwide headquarters in either Washington DC or Tysons, VA.
On a separate and slightly personal note, I can see you have lived in a number of places throughout the US. Do you have a favorite place to live and what makes it special?
This is a great question. I deeply love all of the cities that I have called home. Each of these has served a purpose for me during the time of life when I resided in them. I would not trade those memories or moments for anything. From growing up in India in a small village where we played Cricket on dust-covered fields, to watching Micheal Jordan play on the Chicago Bulls during the glory days of the NBA, to watching my son and daughter take their first steps in our home in Virginia, to spending much time in the Bay Area raising money for my last startup DataRPM – all of these have a precious place in my heart.
However, at this point in life, I have to say I have fallen in love with life in the Bay Area. The weather is absolutely lovely and the food is hard to beat anywhere in the country. But for me, more than any of that it is the access to a collection of the world’s most amazing and delicious vineyards and wineries one can imagine. I am a huge wine snob, and being within driving distance to such a delectable cohort of wineries makes life seem simply sublime.
Disclosure: This article includes a client of an Espacio portfolio company
