Digital transformation has a unique meaning for each organization. For many companies, it’s simply digitizing enterprise information. However, when you look at this concept more deeply, it is the transformation itself that is the critical element. The idea is about transforming to create a different outcome. Digital transformation isn’t just about automation or the use of technology — it’s about challenging the idea of how organizations drive their businesses toward success using technology as a catalyst for improved results.
A great example of digital transformation is the evolution of the restaurant business during the pandemic. Many of these restaurants did not have a delivery offering or curbside pickup capacity until the need was imposed upon them. But, once there was a need, they quickly adapted to transform their former business models. This evolution is where the real value of digital transformation lies. It helps in charting the road maps that drive businesses forward.
Digital transformation also means taking advantage of technological advancements from a business perspective. During these difficult economic times, and with great pressure on profitability and growth, digital transformation identifies other advantages, such as reducing overall cost structure, improving efficiency, increasing productivity, and removing errors in processes.
The idea behind digital transformation is to enhance an organization's capabilities, like agility and responsiveness, through digital intelligence. That's why data plays a vital role in the entire process.
A Successful Transformation
The following considerations are key to a successful digital transformation.
Operate with a sound strategy — The first key to a successful digital transformation is to put strategy ahead of technology. Right now, so many organizations get hung up on thinking it's all about technology. Technology is undoubtedly a part of this transformation, and organizations must be open to how technology allows them to enable the strategy they laid out, but the most critical element for success is a sound strategy.
Challenge and encourage organizational norms — Digital transformation is about challenging and encouraging different organizational or cultural norms. When you aim for change, you must reimagine what you want to change and be willing to disrupt your business to allow that change to penetrate. Disruption is hard because there is always risk involved. Also, for this exercise to be successful, the change must be adopted and supported from leadership. This is not something that happens organically at a grassroots level. The transformation must be visualized and conceived by the senior-most stakeholders in the organization and driven by them from the onset.
Minimize the risk — In order to achieve successful digital transformation, setting goals and expectations correctly is crucial. Business leaders and stakeholders must understand the existing environment, know where they want to go, and map out exactly how to get there. Minimizing the inherent risk involved is equally important. When embarking on this journey, companies are exposed to areas of risk and avenues of transformation they are often not yet aware of — and leveraging professional expertise and knowledge can help guide brands to where they want to go.
Model successful strategies — It's important to start with small steps, develop a road map that scales to meet the defined goals, and then follow that roadmap to deliver on both today's needs and tomorrow's opportunities. As such, partnering with an organization that has a proven track record of success driving massive-scale transformations makes a huge difference.
What Stakeholders Say Versus What They Think
A majority of discussions between stakeholders center on specific technologies. However, what they really want is value. For example, from an operations/customer delivery standpoint, a stakeholder goal might be to get to a stage where the business can deliver the highest-quality service to its customers at a reasonable cost. In this case, the solution to this problem requires much more than technological capabilities; it is about what the business is going to do to affect an outcome. Here, the tool could be new or improved technology. But, the technology is a means to an end, not an end unto itself.
Most C-level executives are very strategic. They want transformation, and they want it now. But, on the right side of the brain, they're undoubtedly asking themselves several questions, like, How do we get there? What is the cost? Are we going to enhance the services and outcomes to the clients' expectations? How is it going to impact the organization's overall headcount? In most cases, the key action that's driving transformation is providing customers with a better experience. To provide a better experience, organizations need real-time insights into customers' needs and pain points.
Another truth is that companies cannot afford to delay digital transformation. In fact, if organizations fail to start planning and preparing now, they will be well behind the market by 2023. C-level executives can often be heard talking about people, processes, equipment, etc., during these discussions, but, in actuality, what they are really aiming at is value. They are looking to get better value out of their best assets, which typically are their people. They are looking to improve productivity and get the best players on their team from across the globe. The simple truth is that digital transformation is the keystone that will successfully achieve these goals.
Many organizations are no longer looking at technology as just a means to enable the business. They are now focusing on what technology can do to drive a differentiated outcome — from the ways they innovate, design, and develop products or the ways they get those products to the market.
This very concept is a bit like the advent of electricity. When electricity was first discovered and utilized, it was transformational. It allowed companies to extend the workday into the night when they otherwise couldn’t. Today, nobody looks at the lights in an office and thinks they are transforming the company. They have moved well beyond that. Many organizations are starting to get to the point where it is now more about what they are going to do differently with technology tomorrow.
Stakeholders should look at the impact on their company's risks or governance and ask questions about establishing visibility into the new systems as well as the plans for a multi-cloud management strategy that includes interoperability across the public and private cloud. Organizations must understand that, as the perimeter of the enterprise ecosystem starts blending with SaaS services, different cloud environments, and data centers, the potential for cyberattacks increases. Therefore, securing the data environment becomes extremely important to the continued success of any company.
When it comes to driving massive transformation, starting with data discovery is a good idea to ensure there are no surprises later and that sensitive data is collected as needed. This is important because, when businesses start to gain insights from this data, leaders must continually focus on minimizing vulnerabilities that might exfiltrate that data.
All organizations are looking for opportunities to yield financial benefits to their bottom lines. The process of digital transformation helps organizations with cost optimization — whether by improving the automation through journal entries to reduce errors and improve overall productivity, allowing improved collaboration between team members, or finding other ways to provide insights into the business.
The period of transformation brought forth by the uncertainty of 2020 will eventually evolve into a period of transition — one where organizations are not going to make these giant leaps in the future. Instead, companies will more often than not make incremental changes to achieve their technology goals every week, every month, or every year as the capabilities evolve. Looking at the modern internet experience alone, organizations can create articles using AI within seconds by simply suggesting a few topics. Similarly, analysts can perform penetration tests or other functions that generally require an advanced skill set or amount of time at ever-increasing speeds. Given the advancements brought forth by the wide adoption of digital transformation today, this trend will inevitably become standard operating procedure over the next couple of years.