Digital Transformation fever has hit businesses across all industry sectors and everyone’s talking about it. However, the concept is not without its problems, not least because there isn’t universal agreement as to what exactly it is.
A study by Capgemini, carried out last year, showed that just 36 per cent of organisations believed that their chief information officer (CIO) and senior management had the same view on priorities for IT investment. So even internally in organisations, the subject gives rise to controversy. Even here at DataArt, where a large part of our core business is helping companies carry out successful “digital transformations”, our approach to transformation is aligned but some believe that the term itself is a redundant one.
Many appear to see digital transformation as a magic set of digital tools which, when applied, form a silver bullet. Others see it as simply a migration of existing systems into a digital environment. But it is much more complicated than that.
Whatever the term means, and to whom, at the forefront of everyone’s minds when setting down the path of change is avoiding failure when transforming a business. Digital transformation is, in fact, nothing new. Twenty years of working on them, working with a range of industry leaders and seeing successful digital transformations in action, has taught me that there are three vital ingredients, or pillars, without which projects fail.
Pillar 1: Non-digital
Yes, that’s right: non-digital. Because before you achieve digital perfection, you have to start with non-digital.
I have heard so many stories and faced many cases when companies acknowledge existence of problems, but they try to fix them by investing in, or developing new, and expensive, software. But simply throwing money at problems usually leaves companies exactly where they started, with no significant improvements made. Familiar situation?
The key is to stop and look deeper at the problem. After analysing the root cause of failure, leaders are often surprised to discover that many of their issues can be solved by simply fixing processes, whether that be business or development processes. Quite often they overlap. Digital tools they invest in are not an instant solve-all, but simply help to automate already-existing processes. Therefore, if you try to automate what is not working – you set yourself up for failure.
Look into your company processes and make sure all is working perfectly before you try to automate, or digitise the business. Make sure you develop a systematic implementation strategy. Do not just invest in tools, invest in analysing your business processes.
Pillar 2: Empathy
Alan Trefler, CEO of Pega recently said in a speech that: “…requirements are about obviating yourself from what’s really going on. Requirements are what create this rift between the customer, and the business team, and the technology team. . . Instead, we need empathy. We need to be able to . . . understand what the true needs, the unarticulated needs, the evolving needs of the customer are.”
How right he was. Many times I have heard those who are implementing projects say: “… these are the client’s requirements…we must stick to them”.
I suggest that instead of the rigid “stick to requirements” approach, those who are implementing projects should take a walk in the customers’ shoes, and seek to discover and understand what the customer really needs.
We need to be empathetic to the customer and determine what is motivating them to seek change. Why are they doing this? What are they trying to accomplish?
In his article “The Art of Good Digitalisation” my colleague Cliff Moyce noted: ”Digitalisation works when the customer – not the company – is at the centre of the digital universe. Customer-centricity is a behaviour and a belief as much as an approach to doing work.”
I cannot agree more – listen to your customer and feel the empathy. Find someone within your team who is willing to do that before you even start a project.
Pillar 3: Communication
“Business people and developers must work together daily throughout the project.” Who remembers the source? Yes, these words are from the Agile Manifesto itself. If you are building an agile development process in your organisation, this is one of the key principles you must follow.
I keep hearing from clients, partners, colleagues, etc. stories on how “… business and IT hate each other…”. Seriously? How can enterprise IT build a successful digital product without listening to its key business stakeholders? I even heard a story about a situation in which the business and the IT teams disliked each other so much that the business team used their own budget to automate their processes. Wow!
I’ve previously written about the digital transformation success story of Toyota North America. One of the keys to their success was that they broke the business and IT silos. They literally had business and IT sitting on the same floor and talking to each other on a regular basis. They introduced a new Product Owner role whose responsibility was to match business needs with IT capabilities. Communication is key and without it, digital transformation is futile.
Of course, there is much more to digital transformation than the three principles described above - you have to set up a proper project governance model and strategy and so on as you would with any IT project - but failing to address these pillars will lead to your whole digital transformation initiative failing.
Yaroslav (Slava) Buga, IT consultant and Business Development Manager, DataArt