The ubiquitous proliferation of technology in recent years has multiplied the momentum and the potential of Digital Transformation
Digital transformation, simply put is the transformation of business processes using technology. Spreadsheets replacing manual ledger and email replacing postal communications can be some rudimentary (and early stage) examples. The ubiquitous proliferation of technology in recent years, however, has multiplied the momentum and the potential of Digital Transformation. Things have moved from PCs and servers to mobile and cloud with blinding pace. With more layers being built on top of existing technology at a relatively faster pace enabling higher disruption further leading to an upward spiral where Digital Transformation has itself transformed from disrupting processes to disrupting business models (Digital disruption). What started as leveraging technology for efficiency enhancement has moved into an unchartered territory where technology intersects economics leading to a new order. An order where platforms are the new challenges, which might end up laying down new rules and equations amongst the stakeholders and eventually redefine how several product and services companies conduct their business.
The overall complexity of the narrative by several stakeholders is not really helping the objective and therefore probably it is – Time to simplify. As Simplicity is not only the most beautiful thing in nature as in business but also the largest multiplier of efficiency leading to a sustainable scale. Here are the top 6 issues that businesses need to understand before they set off on this exciting journey.
Process transformation Vs Business transformation – Clarity of objective always helps before starting off on a new journey. Therefore, clear articulation of objective will help everyone align and put a clear process in place. Process or business transformation – the question should be crossed right in the beginning as these are two different things with different objectives, risks, and rewards. The Process transformation is relooking at all processes through digital lens identifying opportunities to use technology for enhancing efficiency in terms of speed, accuracy, cost, scale etc. The business transformation on the other side is reinventing the business model using technology. The former is more in the world of products and services while the latter has evolved things into the world of platforms as of now (and could be something else in years to come). The objective and thus the process of implementation (resources and the journey) clearly varies in both the case. While the first one can be best implemented by a cross-functional team which also runs the business, as usual, the second one needs an incubation setup with a dedicated team who rethinks the business model or creates a totally new one. Both are not mutually exclusive or connected in a linear order and a business can decide to go after both at the same time. The starting point for both remains same ie rethinking the business processes and the business models with a customer at the core and Tech as the enabler.
Culture – ‘Culture eats strategy for breakfast’ the famous phrase attributed to Peter Drucker says it all on what can happen if culture gets ignored. So people become the real starting point of implementation of change after the objectives are laid down. Digital transformation (for processes) can be slow, boring cuts across multiple functions and can potentially impact people at various direct and indirect levels. The Digital transformation of businesses on the other side can be creative and exciting due to the early stage but can be potentially challenging due to uncertainties involved. In both the cases, the intense involvement of human element can trigger any potential pushback. Creating a culture which proactively embraces change is not an easy task by any means. Therefore aligning the troops around the need and fruits of leveraging technology for change is imperative before sounding the (Digital) war cry.
DQ (Digital / Tech Quotient)- The alignment should then be followed up with education and digital upskilling of the existing workforce. Not all managers are upto speed on the latest tech and therefore the DQ (Digital Quotient) can vary extremely amongst different stakeholders. Comfort with tech at the personal level will always lead to comfort with tech at the business level. While the alignment will fire the intent, the digital upskilling will improve the capability levels eventually leading to smoother implementation and faster adaption.
Skin in the game – Setting the objectives, getting the teams aligned needs to be followed up by allocating resources at multiple levels so that the teams can actually set out to do something. Investment is clearly a barometer of the top management’s belief and commitment towards transformation. If the objective is to achieve something tangible then nothing happens without real skin in the game and if the objective is just checking a box and making everyone happy then lip service (or a dramatic voiceover around a colorful Ppt) can do the job. It is for you to make the choice.
It is Journey and not a one time Project – Digital transformation is a journey and certainly not a one time project as things will keep evolving both at the technology as well as the business front. Teams will embrace this positively if this is seen as a journey rather than a moving target. One possible way is to treat Digital transformation as a critical function like IT or accounting or SCM or HR. This will help it settle down as a long-term business enabler that is critical for success rather than a one time project.
Prepare for complexity and unforeseen challenges – Implementing digital transformation while running a business, as usual, is akin to ‘building a plane while flying it’ and it can be tricky and complex for several reasons. Resistance to change, the interdependence of cross-functional teams, the emergence of unforeseen challenges along the way, lack of commitment at all levels, conflicting business objectives in short Vs long term could be some of the reasons to start with. Be ready for all this and more.
These are the top 6 issues which I feel businesses need to address right at the onset. While doing this might not guarantee a success but will certainly help prepare better for an unforeseen, unprecedented yet potentially promising and rewarding journey.
Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.
Author: Salid Kapoor