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5 Takeaways from a Successful Digital Transformation Approach
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In past few years, Digital Transformation is perhaps the most discussed topic in business aisles. It rightly brings the promise to transform the future of business, of society, the way we live, work, interact etc.
According to IDC, direct spending on Digital Transformation between 2018-2021 is predicted to reach $5.9 trillion. To navigate the digital economy, global enterprises are quick to incorporate new digital KPIs focused on product/service innovations, capitalization of data and analytics, and targeting superior customer experience.
While the value of Digital Transformation is unquestionable, the bigger question that surfaces often, is whether or not these investments are delivering returns? Are digital strategies resulting into enhanced customer experience and customer engagement?
Unfortunately, the answer is largely ‘NO’. And there are facts to support the claim.
A recent survey of directors, CEOs, and other senior executives discovered that despite being the top concern in the year 2019, 70% of all Digital Transformation initiatives last year, approximately $900 billion went to waste.
But why do most Digital Transformation efforts fail and only a few succeed? It’s simply because organizations lack the right digital transformation approach. While Digital Transformation strategies aim to provide opportunities for efficiency gains and better customer relationships, the practices are found flawed. To succeed, digital transformation should be guided by the broader business strategy and not unilateral targets.
1. SOLVE A BUSINESS PROBLEM
Digital transformation is often confused with technology deployment. While it’s true that technology forms the core of Digital Transformation, it isn’t about technology alone. The right digital transformation approach is to have a strategy that aims to solve a business problem and beyond. Due to lack of this foresight, digital transformation starts to fail. The bigger mistake organizations make is to take a technology-centric view of digital transformation.
When a global manufacturer wanted to increase staff productivity and process efficiency, Innover developed a mobile app to act as the corporate timeclock. Employees could clock-in and clock-out of work as they came went for the day. Though, it was an elementary application of digital transformation, it was aimed towards solving customer’s business problem.
This solution enabled 10,000 workers to save on average 1-3 minutes every day, and significantly reduced payroll errors. The app also identified behavioral patterns and added a critical dimension to employee productivity measurement including the time spent inside the factory and on the shop floor.
It doesn’t matter whether the Digital Transformation initiative is small or big, it should impact the topline or the bottom-line and it should solve for a business problem or help reach a business objective.
2. ENTERPRISE ARCHITECTURE: THINK GLOBAL, ACT LOCAL
The second key aspect is to ‘Think global, act local’. A myopic approach to problem-solving doesn’t work in this modern age. In the example above, while the answer to the business problem was a mobile app, the bigger factor to consider was it had to ﬁt into the larger global architecture rather than just being piecemeal.
Too many staggered initiatives isolated from each other create a nightmare from a technology standpoint. Technologists and CIOs, trying to create successful digital transformation initiatives, have to evaluate the broader business framework and then build the enterprise technology architecture that can become a reference architecture for all upcoming initiatives. Creating an enterprise architecture provides the guardrails for the local initiatives and yet provides the agility and speed that is critical for driving business outcomes. It’s not easy but is a cornerstone to successful digital transformation approach.
3. “KNOW THE BIG PICTURE” HAVE AN INTEGRATED APPROACH
It is crucial for businesses to know the big picture of Digital Transformation to deliver bigger incentives. In order to deliver quick wins, there is often a preference towards picking several low hanging projects. This leads to a disintegrated, one-off experience with limited impact on the overall process efﬁciency.
Business and IT teams should work in tandem to evaluate the overall process for a business function and then break it down into contiguous blocks of projects – ranking them on complexity, data availability, impact etc. Now you can pick a ‘low hanging fruit’, keeping in mind how this project ﬁts the larger process and then pick the next project that takes inputs from the previous one, which will then maximize ROI.
We took a similar approach when a large Telco reached out to us to improve their field services operations. We analyzed the complete supply value chain to create a gamut of solutions with an implementation roadmap that leveraged the outputs of the prior steps. The impact delivered was exponential!
4. CHANGE MANAGEMENT IS ABOUT PEOPLE AND TRUST IN DATA
Change management is crucial and should be the heart of your digital transformation strategy. If you want to be a ‘Data First’ organization, reducing or eliminating the ‘experience bias’ needs signiﬁcant change management at all levels. Absence this process, It will be difficult to make data-driven decisions.
It is important for executives to comprehend the larger impact of Digital Transformation and make it a part of their strategic vision and priority. It is equally imperative to create the right data foundation and enough flexibility for execution and realization of this vision and strategy. The value realization team should be empowered to take the decisions (within the deﬁned enterprise architecture) and drive results.
Lastly, while there is a clear bias towards leveraging the latest evolution of Artiﬁcial Intelligence and Machine Learning, creating a robust data governance and pipeline is the foundation to a ‘Data First’ organization. It may not sound very exciting but your change management and digital transformation efforts will miserably fail unless you have conﬁdence in your data strategy.
5. “JOURNEY IS THE REWARD” TRANSFORMATION HAS TO BE CONTINUOUS
This is the last takeaway. Transformation needs to be a process of constant realization. It is all about a continuous response to the ways that technology can change how business is conducted, customer expectations are addressed and the needs of employees are taken care of.
At the end of the day, the analytical models, though created on the basis of trusted data sets, are still probabilistic models. The naysayers can still challenge you on the reliability of those models. Therefore, these models have to be continuously refined and optimized. Rarely ever we ﬁnd any digital transformation journey that is ‘won and done’. For example, supply chain optimization is not a one-time initiative. Almost all organizations, small or large, strive for a continuous improvement in their supply chains.
According to a latest report by Gartner, 40% of CEOs list company’s growth as their top priority. But digital technology— or the lack of it — remains a signiﬁcant obstruction to it. And the above-mentioned ﬁve steps can take you closer to achieving a successful digital transformation.
- Innover Team | July 1, 2020 |