If you’ve heard the term digital readiness thrown around lately, you’re not alone. Digital readiness is changing business models and transforming customer expectations—here’s what you need to know to stay ahead of the curve.
What is digital readiness?
Digital readiness refers to an organization’s ability to take on new, large-scale digital initiatives – which is based largely on team members’ ability to use the technology that’s essential to their work.
Business is going digital—and successful business leaders and teams will be the ones who embrace it and follow it there. Digital business is more than e-business or e-commerce. It’s a network of applications and assets that work together almost automatically, allowing rapid development of new capabilities. And its users gain the resulting competitive advantage. But teams can’t get the advantage until they’re able to leverage this network. In other words, they need to achieve digital readiness.
Why is this so important? Even beyond the competitive advantage readiness yields, digital projects are quite different from what many departments are used to. The workflows feel different, and projects often involve multiple stakeholders and greater complexity, which can result in blurry accountability.
But the upside is, according to a 2018 Gartner report, legal departments that are digital-ready could experience:
- 5x fewer projects with inappropriate risk-taking
- 5x fewer delays in digital projects
- 63% increase in on-time digital project delivery
- 46% increase in digital projects that take appropriate legal and compliance risk
In addition, a McKinsey report shows: “…data-driven organizations are 23 times more likely to acquire customers; six times as likely to retain customers; and 19 times as likely to be profitable as a result.”
But even with the potential for increased profit and lower risk, 81% of legal departments have not achieved digital readiness.
The legal industry isn’t ready for the digital age
With stats like this, what’s stopping legal teams from adapting? There’s no single answer – instead, there are many (quite valid) reasons so many are behind the curve. Aside from a general lack of awareness, there’s sometimes a lack of focus on anticipating future client needs, resistance to change, and the fact that many firms have yet to experience buyer demand (for now)—or the resulting financial pain.
Low overall investment is also a major factor. According to Vidhya Balasubramanian, practice leader at Gartner: “Despite increasing understanding about the potential of technologies for legal department use, overall investment remains low — an average of only 2% of legal department budgets.” But this won’t stand for long—because the consequences of digital failure are too great to ignore:
- Significant costs
- Upset customers
- Regulatory backlash
- Executive resignations
- Lost business
- Product flops
With so many factors affecting teams’ readiness, it’s clear that in some cases, digital transformation requires a total cultural change. And managing this change is no small feat—in fact, it may just be an enterprise’s largest hurdle. So how can your team manage the change and join the 19%?
Attain digital readiness on your team
According to Gartner, there are four steps to approaching digital readiness. As you begin to implement these, break each step into several smaller, achievable goals to keep your team motivated as they make changes.
- Clarify the role and accountability of stakeholders, and provide legal support to those whose roles and risk tolerance are formally defined in digital projects.
- Build rapid-response capabilities to identify more quickly when and where digital risks are forming and apply the appropriate level of legal engagement by project, while still enabling business ownership of digital projects.
- Foster digital skills and competencies to acquire and transfer digital expertise to close capability gaps swiftly and make sure legal fully and quickly understands the impact of changes in business and operating models.
- Ensure a business-focused approach to information governance that focuses on providing legal guidance for appropriate uses of data within specific business projects.
When your team is ready to take the leap, why not start with your contracts? IntelAgree is reinventing the way legal teams manage their contract process from start to finish, with unlimited e-signatures and a machine learning-powered contract repository. Schedule a demo today.
