Digital Transformation: 3 Hard Truths
Business leaders and CIOs often undertake digital transformations with finite conclusions and endpoints. As technology innovation speeds up exponentially, it’s clear that we need to reinvent our businesses continually to remain relevant and to thrive.
The C-Suite needs to foster continual digital transformation – not just with an organization’s technologies, but for its entire business. A recent KPMG study finds that more than 70 percent of CEOs say the COVID-19 pandemic has accelerated their digital investments. This requires a broader perspective to reimagine customer experiences and derive value through product, service, and innovative business models.
There are many hard realities that we’ve all had to contend with when it comes to digital transformation, but here are three that are often not given enough attention:
Truth 1: You must disrupt yourself … or someone else will
Statistically speaking, the odds of survival are stacked in favor of new companies that come storming onto the field and they are stacked against legacy companies. In the past decade, we’ve seen the emergence of nearly 500 companies with a valuation of over $1 billion each, and we’ve seen GE, the last member of the original DJIA, drop off that list.
The difference lies in agility and speed – these companies embrace innovative technologies to adopt new approaches and innovate products, services, and business models to create new market opportunities and meet changing market demands. Digital transformation can spell the difference between a company’s longevity and its demise.
Disruptive technologies are often the triggers for change, and companies that embrace them are propelled forward with a significant advantage over those that don’t. Technology evolution is continuous. As cutting-edge technologies become mainstream, we need to look at the next wave of game-changers. Currently, multi-cloud, AI/ML, IoT, SDI, 5G, and cybersecurity are on the table, and businesses are racing to implement them as part of their digital transformation plans.
At Intel, we actively embrace transformative technologies. We constantly aim to enter new business domains and adopt technologies that can give us a competitive advantage. Examples include:
Truth 2: Digital transformation isn't about an IT strategy. It's about leveraging continuously evolving technologies to change your entire business.
Digital transformation projects that are born as “IT initiatives” run the risk of being viewed as changes for the sake of new technology. Digital transformations must be viewed as business transformations, with business leaders not only buying into the proposed plans and value but driving the organizational and process changes that are needed to be successful.
The widespread adoption of technologies means an organization doesn’t gain a competitive edge when it uses them, but rather how it uses them. Success lies in creating balanced IT-business partnerships that provide experts from both technical and business domains so new technologies can be integrated deep into the business.
Intel’s AI projects are a perfect example of this in practice. Together, IT and the business have been able to achieve over $500 million in business value in 2019.
Digital transformation isn’t a “from->to” process that reaches a static, determined “end state.” Today’s competitive pressures and the pace of technological change are simply too great to allow for a transformation to ever be “finished.” We need to view digital transformation as always evolving, always underway – with leaders and businesses embracing a dynamic state of constant disruption.
At Intel, we continually evaluate the latest technologies for their potential as game-changers. For example:
Truth 3: Transformation requires massive shifts in culture, operations, and people – with change and culture being the toughest aspects
One of the more challenging aspects of digital transformation is the human element, especially in legacy organizations mired in deeply rooted cultures. In large organizations, undoubtedly, there will be siloed thinking, fear of change, skillset gaps, and concerns with job security, all of which lead to resistance to change. Employees are the key to change and success lies in the ability to shift to a digitally savvy organizational culture, employee engagement, workforce capabilities, and painting a picture for employees on how they fit into driving this change.
According to a recent McKinsey analysis, an organization can double or triple the success rate of digital transformations by having the management team establish a clear story for change, by getting business leaders to ensure collaboration between business units, and by ensuring that standard operating procedures are modified to include digital technology.
A path worth taking
The path to digital transformation has many twists, turns, and hard realities along the way. Bolstering an organization’s resilience is a must in order to deliver the valuable opportunities that come with disrupting your strategy and operations. The leaders who embrace digital transformation as a journey versus an end-state, and who keep an eye on reimagining the norm and embracing the complexities, will find it to be a game-changing path worth taking.
Author: Archana Deskus
Source: The Enterprisers Project