Our customers are, on a daily basis, exposed to the speed of Google search, the quiet efficiency of Amazon, the intuitive and user-friendly Apple experience, and an on-demand everything – from food to entertainment to transportation.
It is then but natural that these customers would eventually use similar standards of personalized near-instantaneous service to measure the organizations that they deal with. Often these organizations would come up short.
What is digital transformation?
While ‘disruption’ has been a buzzword for a few years now, it goes hand in hand with its cousin, digital transformation.
Digital transformation is often touted as the savior that will help organizations prosper in this digital era. Often thrown around in conjunction with cloud, mobility, IoT, AI, machine learning, robotics and virtual augmented reality.
So, what exactly is digital transformation?
Digital transformation is the use of technology to achieve breakthroughs in service levels and operational efficiencies. It often leads to creation of new business models and revenue streams.
It is a broad definition and at times it does seem like a catchall phrase. So, let me clarify what digital transformation is not.
Digital transformation is NOT technology
Since the use of technology is implied in the term digital transformation, it is easy enough to confuse the two.
A component of a digital transformation strategy could be technology. However, technology remains the delivery channel, it is not the end product in itself.
“To avoid falling behind the competition, organizations need to rethink how they do business in the digital era, in which change happens at warp speed”A Framework for Digital Transformation, Cognizant
Understanding this is crucial, otherwise, digital transformation ends up becoming yet another item in the IT department’s list of deliverables rather than be a crucial initiative with organization-wide ownership for change.
Achieving digital transformation is NOT the end result
The CEOs and the CIOs are undoubtedly under pressure to find new ways to compete in markets that are continually evolving, with innovation pushing the boundaries of what is possible. This environment also brings with it extraordinary opportunities for hyper growth.
However, digital transformation is not about implementing any single piece of technology, new platform or redesigned architecture. Even if the implementation were a successful one, the organization has to constantly seek out ways to dramatically shift the value delivered to the customer and bring in business efficiencies.
Digital transformation has to be a continuous journey of optimization while addressing the changing business environment. The end result is improved business outcomes and customer experience, however, the process is iterative and one of continuous improvement.
Digital transformation is NOT a patch
Real digital transformation has to cascade across the organization, addressing the major touch points (the moments of truth) in the customer journey.
Its implementation must involve rethinking the organization’s culture, mindset, and architecture.
Transformation cannot happen with a fix-it-and-forget-it approach. It is an all-consuming activity and cannot be approached in silos.
Now that we have a better understanding of what digital transformation is, let us review 3 missteps that companies make.
CIO Survey 2018, The Harvey Nash/KPMG which surveyed 3,958 IT leaders, found that “78% of CIOs believe their digital strategy is only moderately effective, or worse”. The study also found that only “32% of organizations have an enterprise-wide digital strategy. This is down on last year, suggesting IT leaders are rethinking their approach on digital”.
Misstep #1: Not communicating enough
Transformation involves redrawing entire processes and reviewing the standard operating procedures to rethink how value is delivered.
Such an exercise requires extensive collaboration between various units and an organization-wide appreciation of how important transformation is to the organization’s very existence.
Restricting the dialogue around transformation to smaller teams severely limits the chances of success.
“The path to transformation is most often shaped by the person or group leading the effort, which can limit the implementation of a holistic, persistent, and meaningful enterprise-wide transformation.”The Six Stages of Digital Transformation, Altimeter
From top down, the organization has to start talking about change.
It is a conversation that needs to be repeated. And when it has permeated throughout the organization, repeat, repeat, repeat.
The narrative from the top has to constantly reiterate the seismic shifts in customer expectations, the end goal of favorable outcomes and that change is urgent and imperative, .
Unless employees across the organization are onboard, transformation initiatives are doomed to fail.
Misstep #2: Making the conversation technical
Implementation undoubtedly is a critical success factor for any digital transformation initiative. However, it bears repeating that transformation is not technology.
The dialogue on transformation is not about which database schema to use or which machine learning algorithm to favor.
It is often easy to get lost in the implementation details and forget the broader picture of why transformation is crucial.
“Although IT will play an important role in driving digital transformation strategy, the work of implementing and adapting to the massive changes that go along with digital transformation falls to everyone. For this reason, digital transformation is a people issue.”The Enterprisers Project
Confusing digital transformation with technology often means that executives will start pursuing new technologies while losing sight of what the end objective for transformation was.
This leads to costly and time-consuming chase of technologies that sounds promising without any substantiated return on investment.
Conversations on digital transformation should always keep in mind the improved customer outcomes or the new business efficiencies or models being pursued.
Misstep #3: Not elevating the digital leads within the company
“Nothing kills a good transformation project like disenfranchised staff.”A Step-by-Step Guide to Digital Transformation, Niall McKeown
There will be several moving parts that form the components of a transformative change. It is easy to forget that the change within the organization can only be driven by people. Colorful posters around the office walls, inspiring talks at town-hall meetings, and energetically toned emails can only do so much.
Part of the puzzle to successful digital transformation is to have people in key positions within the organization who are sold on the burning need for change.
For an organization to stand a fighting chance to succeed, these digital leads need to be empowered and visibly elevated.
But it does not stop at this. The ownership of change must be felt across the organization, new ideas need to be encouraged and constantly rewarded.
So, what do you think of the 3 missteps? Are there any major ones that I have overlooked? Let me know in the comments below.