Digital transformation is a foundational change in how an organization delivers value to its customers. Here is what transformation propagates, along with the direction to ensure your company is on the correct course.
Already a key strategic initiative, digital transformation has taken on heightened importance in the wake of the coronavirus pandemic.
Going by the stats, about 59 percent of 373 IT decision-makers have asserted that this pandemic has paved the way for the acceleration of digital transformation efforts.
Put aside the budget concern triggered by the COVID-19 outbreak, the total spending on digital transformation technologies and services will grow 10.4 percent in 2020 to $1.3 trillion. This data is presented by data researcher IDC in May.
Presenting a viewpoint on the digital transformation, it is generally viewed as a collaboration of modern tools and processes harnessed to solve business problems and satisfy customers. But as the “one-size-fits-all” approach doesn’t work here, many CIOs employ different means to execute on those drivers.
Now it is time to delve more into digital transformation and offer advice for IT leaders embarking on digital journeys.
Digital Transformation Defined
Digital transformation defines the whole journey of rethinking of how an organization uses technology, people, and processes to change business performance. Taking this whole journey as an ecosystem, it has to be led by the CEO, in partnership with CIOs, CHROs, and other senior leaders. In a true sense, digital transformation requires cross-departmental collaboration to complement business-focused philosophies with rapid application development models.
These changes are usually performed to adopt new business models and new revenue streams, driven by changes in customer expectations around products and services.
“Customer expectations are far exceeding what you can really do. “says Westerman. “That means a fundamental rethinking about what we do with technology in organizations.”
Digital Transformation Drivers
For many years, a substantial number of organizations have started their digital transformation journeys to counter the potential for disruption from incumbents and startups.
For example, retailers are answering Amazon.com’s march across every vertical through integrating algorithms to refine their logistics and ensure every product makes its way easily from warehouses—before their store locations run out. It ensures merchandise makes it quickly across the last point and allows retailers to store more goods in their store locations.
This pandemic has also compelled IT leaders to reprioritize their strategic IT roadmap, adopting cloud software for video collaboration, and building apps that empower workers to enter offices administered through social distance practices.
Now, it is complemented by upgraded machine learning (ML) software that empowers organizations to manage how products are being managed through supply chains disrupted by shifts to eCommerce.
Talking specifically, such implementations don’t facilitate transformation. Rather, these tools and solutions display a clearer picture of a company’s digital fitness.
Digital Transformation Tips
Presenting you the six steps companies can follow to affect the kind of change they desire.
Align objectives with business goals: What business outcomes do you want to achieve? If you have the answer to this question, you are heading in the right direction. Like Prudential’s Goodman says it’s quintessential for the IT leaders to acquaint with the problem of the business and have to align their goals with the outcome the business strives to achieve.
Be bold when setting the scope: Successful digital transformations are 1.5 times more likely than others to be enterprise-wide in scale, says Laura LaBerge, a McKinsey senior knowledge expert. This also empowers CIOs to identify the biggest bang from their overall digital investments. To make this process more scalable and efficient, they must look at the bigger picture, not a few incremental changes.
IT and business must co-create: As per the traditional approach, IT departments were called on to fix broken services. But as per today’s scenario, IT must work as co-creator with the business to solve problems and deliver value for customers. Actually, it has to go both ways, it has to be a collaborative approach and all the resources and departments must go hand-in-hand to change the culture of the whole company. The businesses just can’t sit idle and demand tech and transformation, they must act on it and have to know what they are asking for.
Embrace adaptive design: Gone are the days when the upfront investments and rigid KPIs are only required. Today adaptive design is in the rage and empowering CIOs to tweak transformation strategy frequently, monthly, or even weekly basis.
“We see this adaptability ingrained in the design of successful transformations,” LaBerge says, adding that business leaders reporting success were more than three times more likely to facilitate monthly adjustments to strategy.
Adopt agile execution. Encourage risk-taking, enabling even lower-level employees to make decisions, fail fast, and learn. This has been a key tenet of IT’s success at Prudential, Goodman says.
Undoubtedly, disruption is no longer a necessity but a way to survive. But many organizations want to disrupt by addressing their rivals, the best digital transformations require preemptive changes rather than reacting to market or competitive pressure. Organizations must invest much time and resources in research before exhausting their current sources of profits.
Essential Digital Transformation Roles
Undoubtedly, emerging technologies and innovative procedures are prerequisites, but having the right skill set of staff is also immediately necessary for real digital transformation.
Software engineers, cloud computing specialists, and product managers play key roles to seek out new products and services. On the other hand, DevOps leaders support software development processes by merging development with operations, enabling companies to continuously iterate software to speed delivery.
Along the same lines, data scientists and data architects are also in high demand, as companies want to harness big data and transform it into actionable insights through machine learning and Artificial intelligence.
Furthermore, IT departments supporting business-wide transformations also require a pool of resources composed of Digital trainers, Writers, UX designers, Conversational brand strategists, forensic analysts, ethics compliance managers, and technology managers.
Digital Transformation Impediments
For many reasons, the digital transformation journey for many organizations fails. It includes poor leadership, a huge disconnect between IT and the business, lagging employee engagement, and substandard operations. But if talk about the main culprits of a derailed digital transformation are always vying for big bang change, focus on petty issues like cost-cutting as a business driver and failure to succeed in the business.
Furthermore, approaching digital transformation without knowing the main motive is a perfect recipe for failure. Every business must ensure that the business owns the process and drive end to end transformation that includes processes, people, policies, and technology altogether.