A commitment to digitally transform your business is not the same as switching one accounting package for another. It’s a journey, partly discovery, partly trial and error.
The Pre-transformation Phase
A digital transformation journey may take 2 years and require considerable investment in management time. Therefore, an evaluation and planning phase of 2-3 months can pay dividends. We asked senior managers to reflect and identify the pre-transformation activities they felt most worthwhile.
- Breaking with the past. One of the most difficult decisions is to recognise that ‘doing the same old things, but better’ is not a viable strategy when both customers and competitors are starting to operate in entirely new ways.
- Documenting the Current State. In order to move in the right direction, one needs to know one’s point of origination. Similarly, with your business processes. Unless you have a clear idea of how they operate now, it’s not possible to know whether changes will meet new goals or even produce a worthwhile return.
- A Vision that’s flexible and adaptive. To quote one CEO on his transformation experience: “The further we go, the less we know”. Leadership needs to articulate a clear sense of direction. But with the ability to adapt when unexpected opportunities and obstacles present themselves.
- Persistence and Resilience. There is no fool-proof cookie-cutter digital transformation solution. Because every company has a unique history, so every journey will be unique, with different setbacks and obstacles to be overcome.
- Multi-dimensional Change. As previously stated, technology is only one dimension of the changes that will be needed. Staff, Customers and Suppliers need to be consulted and involved with how your new business model will impact them.
- Determination and Patience. Leadership must be prepared for a multi-year commitment to the transformation program. They should not pin all their hopes on the success of a single component but have other options and alternatives ready.
The In-transformation Phase
This section is drawn from our own study of internal practices related by companies that felt they were achieving success with their digital transformation programs. From analysing the results from hundreds of companies we identified 6 factors that are common to those firms who reported success and tangible benefits digital transformation investments. (For a copy of the study summary or to take part, please contact the author)
- Customer-Centricity: an approach to doing business that focuses on providing a positive customer experience, through all types of channels & relationships. This needs to happen both before & after as well as at the ‘moment of opportunity’. Also developing the digital & social media interactions to generate data-driven perspectives so future market trends and customer needs can be anticipated.
- Transformational leadership: Leaders working with Staff teams to identify where and how digital technologies can be of benefit. Providing a clear vision to guide the changes, supported by a robust but adaptable digital technology architecture. Then executing the changes in tandem with committed members of the teams.
- Teamwork & Collaboration: A combination of the problem solving & communication skills needed for staff to work together in high-performance teams. Moving towards a common set of goals, using evidence-based decisions. Removing barriers of location & time through the use of mobile & digital collaborative technologies.
- Core Process Conversion: The rational selection of business processes vital to the firm and those that can be better performed by external specialists. Then the redesign and automating of vital processes that can make the best use of technologies such as AI, RPA, Predictive Analytics, Chatbots, Smart Machines, IoT.
- Strategic Relationships: Joining forces with Suppliers, Partners, Stakeholders & Digital Native start-ups to draw upon each other’s expertise and technological capabilities. Creating innovative and complementary products or services. Then extending these offerings to reach broader audiences and markets, whilst surpassing the competition.
- Digital ICT Strategy: Deploying the most appropriate digital, data, social, mobile, AI & robotic technologies within an agile and flexible Information Systems architecture. Incorporating data-driven analysis to identify new ways for customers to enjoy doing business, whilst also reducing costs and minimising business risks.
Digital Future: A Post-transformation Era
At the moment, there are few organisations that feel they have fully completed their transformation journey and little valid research as to an ‘end-state’. In fact, many argue that a transformation journey never stops because both customer needs and technologies continuously evolve so new challenges and opportunities keep presenting themselves. For this section, we have used the ‘Delphi’ method which is applicable when long-term issues (10 to 20 years) must be assessed. It’s based on the collective views of several experts as to what post-digital transformation managers will focus on:
- Social Intelligence: Interpreting a 360-degree view of the customer, whether B2C or B2B will be a vital tool for managers. Customers will share their views on how well your product or service meets their needs with everyone. Accessing social media is important in understanding what those needs are, and how you can help them make the best use of your product and service.
- Mobile: In 2018 over 80% of UK consumers used mobile devices and smartphones for e-commerce. In the same year, £100 billion of B2B trade was conducted via mobile devices. By 2024, 5G networks will provide 4 times the combined mobile data capacity of 2G, 3G and 4G. There will be more and more ‘smart’ domestic appliances in our homes and smart machines connected via the Internet of Things (IoT). In just a few years a PC Workstation will seem as old-fashioned as a film camera.
- Analytics/AI: The analysis of data will become the primary management tool in the 2020s. As digital becomes the engine of commerce so data is its oil. For many years, supermarket chains have provided and sold checkout data to their suppliers in order to improve their understanding of demand and cut costs. Data will arise as a by-product of your company’s own integrated systems as well as from commercial data brokers. For interpretive analysis of trends and forecasts ‘Big Data’ Analytics will combine with AI to create ‘decision machines’ that will convert guesswork into certainty.
- Cloud: The cloud is rapidly growing to become your company’s primary access to everything digital and will remain so for the foreseeable future. Already a means of storage and processing power, it’s also a marketplace for software innovations and bespoke development. Via Wi-Fi and the cloud, we already use voice to text devices from Amazon, Apple, Google to ask questions and issue commands. The capability of these devices will soon reach the point where they could replace human advisers for some aspects of legal, tax & medical diagnostic advice.
- Knowledge: “Knowledge is Power” as the saying goes, and never will this be truer for businesses than in the post-transformation era. In 1937 H.G. Wells foresaw the advent of a ‘Permanent World Encyclopaedia’ that contained all human knowledge and was available to everyone. No one can accurately state what % of today’s human knowledge is already on the internet, but it is substantial and increasing hourly. So, to remain competitive, companies will have to access new knowledge, insights and innovations. This will come from various sources including ‘data mining’ for nuggets of knowledge and of course, from employees, partners and associates that are attracted to companies that can provide the right environment for creativity.
- Speed: As online consumers we now expect next-day or in some cases same-day, delivery. We expect to instantly access comparative information on a range of alternative products at any time and to read other peoples’ reviews. We expect to have products delivered to a location most convenient for ourselves- home, office, and pick-up points. Nowadays, if a company has a consumer-safety problem we find it reprehensible if there is more than a day or so delay before
recall or rectification. There are no reasons to think that, over the next few years, our expectations will not keep rising. So as Speed becomes a key factor in the reputation of a company, the management decision making and action taking must keep pace.
Time is short
The time horizon for this 2019 article is just 5 years, i.e. 2024, not 10 or 20 years. There are many new technologies valuable to business that have been covered. For example, in 2014, just 5 years ago mobile phone payments, smart watches, blockchain and many more were not yet available, now they are mainstream. In that same year, 3D printing was largely seen as a toy. Today, GM uses 3D printers to make machine tool parts that used to cost $3000 and take days to arrive. The cost of the raw material is $3, and the printing takes a few hours.
A Digital Transformation journey for any company can be long, complex and risky; plenty of excuses than to put it off. But for UK businesses seeking to compete and thrive in a new global environment prevarication over digital transformation is not an option.
If you would like to understand how digital transformation applies to your business, and how you can embrace this new wave of technology read about our digital transformation services here, or get in touch.
Former CIO, Ross Harling, has helped numerous organisations with technology-driven business transformations. He has received numerous Business, Ethical and Environmental awards for his work in this and other fields. Since 2014 Ross has also been an Expert Evaluator for the European Commission on Business and Technology Innovations.