If you were to do a simple cause-and-effect analysis, then you might easily assume that digital transformation is primarily about implementing digital technologies such as mobile, social, analytics, cloud, Internet of Things, robotics, and the like. But a purely technology-centric definition is a radical over-simplification: a business strategy does not become transformative just because it involves the wielding of digital technologies.
While Digital Transformation might be technology-led, much like The Fourth Industrial Revolution it has the potential to disrupt societies and organisations, and the changes it requires go much deeper.
So if you are wondering whether your company is truly on the road to digital transformation, try seeing if you can answer yes to most – if not all - of the following questions:
1. Are you re–imagining business processes?
In the course of its everyday operations every business has to find ways to build incremental changes that involve improving or updating existing business processes - to make them faster and more efficient for example. But can we really call these changes transformative?
Digital transformation should be more aligned with changes that re-imagine your business processes, or open up new vistas for creating entirely new products and services. It can be a game changer in terms of developing new ways of running businesses or engaging with customers.
2. Are you redefining your relationship with the customer?
Digital transformation can be an opportunity to redefine the enterprise-customer relationship. For example, organisations with successful digital strategies have been able to convert one-off point-of-sale interactions into long lasting relationship journeys; and a one-dimensional view of the customer into a holistic 360-degree view. Digital transformation has the potential to change the positioning of a company from a just a “seller” to a “trusted partner”.
As an example take Amazon, which started life as an online bookstore in the late 90s. Its transformative digital strategy – pegged on building an effortless online customer experience - has meant that millions of shoppers around the world now trust it for purchases from everything from baby clothes and jewellery to car tyres.
3. Are you leveraging the wider ecosystem in your industry?
If digital transformation is about the creative integration of people, process and technologies; its impact can be multiplied many times over if organisations integrate across ecosystems of partners, vendors, customers and even competition.
Successful digital-native companies such as Uber and Airbnb are transforming entire industries through the ecosystems they have created and showing stupendous growth by creating a unified experience across ecosystems.
As digital aspirants, you need to look beyond your current boundaries and integrate with the best the world has to offer to create unique products and services. Think: can you tie up with supply chain partners, complementary businesses or even your customers or competitors in order to deliver above and beyond customer expectations in your industry?
4. Do your teams have the right technology skill-set and mind-set?
While a digital vision begins with a re-imagined business process; it is realised by a supporting technology architecture and your people must be able to deliver on it.
For example it’s unrealistic to expect enterprises to simply rip-and-replace legacy technologies with modern ones; getting to the right digital technology footprint is a carefully planned out, multi-step journey. But making this happen is not as easy as building a mobile app or subscribing to cloud services – it can also involve changing the fundamental methods and culture of application development and IT management.
If the development teams are not trained in modern agile methods, do not already embrace a DevOps culture or are unwilling to re-architect critical applications to adopt a micro-services based architecture, for example; then they may be ill-prepared to deliver the speed and agility expected by the business. You must create the right technology skill-set and mind-set.
5. Do you have leaders who see the bigger picture?
Digital transformation is less about one brilliant idea or one smart individual - but more about integration and teamwork. The impact of digital technologies can be so universal that the opportunities for transformation lie across teams, functional silos and even organisations.
Leaders have to step up, and focus on the larger picture, they have to see beyond departmental boundaries, playing a role that is more Integrator and Orchestrator; and less Manager. They can’t be allied to – or be looking after the interests of - individual departments such as IT, marketing or customer service. For effective digital transformation, leaders will have to invest in building these skills.
6. Do you have a good system for prioritising digital transformation initiatives?
IT leaders and enterprise technology architects should start by carefully mapping out and gaining a good understanding of the varying degrees of technology maturity across the enterprise. Your investigations will very likely indicate that these things are not homogenous across the enterprise and the resulting roadmap for digital transformation will suggest different speeds and levels of investment in digital technology based on the maturity of the current technology and what is deemed critical to the business.
For example, you might prioritise the digitalisation of a critical customer service process over the digitalisation of a warehouse management process - if the former is already a web based system and has modern system components. On the other hand, if the business wants to focus on efficiency first, then the warehouse system will get priority.
If you were able to answer yes to the majority of the above questions, then congratulate yourself that your organisation is ticking many of the right boxes to bring about a digital transformation. Because, as enterprises chart their course towards a digital future, rather than diving headlong into implementing digital technology; they need to create all-encompassing forward looking business strategies that take in areas such as culture, leadership, skills, business models and partnerships within their wider ecosystem.
Anand Birje, Corporate VP and Head – Digital and Analytics, HCL
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