Many have attempted to define what ‘digital transformation’ truly means, but at its core is simply ‘helping organisations to create value by merging their processes with the latest technology solutions’. It was once a commonly held belief that digital transformation (or DX, as it is now often referred to) was exclusively for large organisations, but todays small and medium sized businesses now understand the value of – and need for – transformation.
The idea is, understandably, daunting and it may be tempting to rely on the capabilities of technology alone to effectively transform, particularly in smaller organisations. But it is entirely possible to implement a top of the line technology solution and still fail to generate any value. So, how does every business ensure that their own DX is a success?
Understand the reality of change
If you ask a CEO or major shareholder “how large would you like your company to be?” the answer is going to be “as large as it can get.” This tells you everything you need to know about organisational goals – development and growth are the journey and the destination. Constant evolution and looking to the new can create real business value for you and your customers. This may be influenced by external factors, such as industry competitors, government regulations and new technologies, but can also be driven from within when organisations strive to positively disrupt themselves and become truly ‘agile’ by seeking new, better ways of doing things – usually supported by innovation and technology.
Development and growth
are the journey
and the destination
Know the ‘Why? What? and How?’
Without a clear digital business strategy, it is very difficult to understand your DX goals. This usually begins with an assessment of your current business models and environment (both external and internal), followed by a decision on whether transformation is required across the whole business.
Can it fit and contribute with a current and/or future business models? Is it a trend to follow? Do you have to comply with certain government regulations, taxes, customs, etc? Are you under the pressure from your competitors? What are the expectations from the customers? What about internal communication and sharing business data?
How can you use digital technologies to transform or orchestrate the business model? Do you aim to improve overall efficiency, effectiveness and productivity? Are you looking to increase profitability and revenue growth? Can you speed up the way you introduce new products and services to the market? Is there a better way to streamline communication with the customers?
Do you have enough capacity and knowledge to run DX internally or do you need external support? Is there enough understanding from all stakeholders? Where stakeholders hold different values, how do you communicate, link and align?
IT experts are great with managing new technologies and tools and Business Managers are excellent in understanding the market and pushing sales, but, if you asked them to discuss DX, they’d often be speaking different languages. A dedicated team with a blend of skills is required for a successful implementation: business managers with in-depth understanding of technology and IT managers who fully grasp business challenges and opportunities, both working to a framework of major DX milestones and KPIs. This structure is essential to measure progress, review ongoing challenges and go forward from lessons learned.
Know the effects – and address them
Digital transformation affects organisations in different ways, but employees are often at the top of the list. It is known that some people can struggle to embrace change, so it’s important to make a program of self-development available, so that everyone has the opportunity to understand their new environment and develop the skills and competencies they need to support the transformation. A strong and clear message from leadership and close inter-departmental relationships will also put you on the path to greater understanding and a widespread welcome for the positive changes that DX brings.
Organisational culture and mindset have a significant impact on DX and can be partially measured using the Westrum model, which assesses from ‘Pathological’ (power-oriented) and ‘Bureaucratic’ (rule-oriented) organisations, up to those of a ‘Generative’ (performance-oriented) persuasion. In a nutshell, organisations at the higher level are those who welcome new ideas, interact as one team in pursuit of one goal, deal with problems rather than ignore them and treat failures as opportunities. An environment of positive leadership and support, where goals are not divided by silos but owned by a single team, can be the starting point of complete mindset shift – resulting in a ‘yes, we can’ attitude.
…and finally: The Tech
Where to begin when the technology options are vast and growing rapidly? This is where you see the real value of your early strategic planning. Whether you want to use AI, Blockchain, IoT, Robotic Process Automation, or any other of the plethora available, it is preferable to choose a single logical platform that resolves all your tedious manual processes and improves existing automatic processes. It’s important to bear in mind that any solution should be open, scalable and able to support changes at any moment. Methodologies such as Six Sigma and Agile can be highly beneficial here, whether you’re looking to optimise business processes or create a new software solution.
Ultimately, translating business requirements and challenges into adequate technological solutions is clearly easier said than done. However, with thorough planning and strategy, and clear communication across skilled and knowledgeable teams, DX becomes a far less daunting prospect all round.