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Digital transformation is certainly the buzzword of the decade. It has made Buzzword Bingo winners the world over as it has punctuated every digital, tech, futurist, and marketing conference in recent memory. This article it not meant to question the viability of digital transformation, but rather challenge its focus.
Traditionally every digital transformation project is IT led, which means that it is incredibly technology-centric.
The problem with this is that technology does not directly give value to a business; nor has it ever (with the exception of technology in products). The value in technology and indeed with digital transformation, is in doing things differently.
The value in digital transformation is not in the digital, it is in the transformation. Digital enables new business models and a new way of working, but it doesn’t offer the value directly.
The value of ecommerce is not the internet, or the virtualization of computing power, it is about selling products differently. The digital transformation enabled sales to work differently. To unlock a new way of selling. The value is in being able to sell differently. In having a different business model.
Similarly, IoT is not about RFID tags. IoT is about the synchronisation of operations and radically transforming business models.
Technology needs to be the enabler and not the destination. We need better business strategies, not digital strategies.
Digital transformation: where the focus should be
Business leaders who focus on transformation (and strategic transformation at that) are far more successful than those who just focus on digital transformation, or digital enablement. Technology adoption will not yield the same results for a business as one who is strategically transformed.
This does not mean that companies should avoid new technologies and managers and business leaders must not ignore rapidly-emerging digital innovation and progression. It means that these new technologies must be fit for purpose.
Digital transformation is not a “me too” strategy. As soon as it is your organisation is throwing potentially millions of rand down the drain. Strategically led transformation that is digitally enabled is the only way to ensure success.
Guidance: focussed digital transformation
Avoid silo strategies
The greatest shift that needs to happen is the move from being consumed with individual strategies. A VR strategy; a mobile strategy; a cloud strategy and AI strategy. These silo strategies are often difficult to integrate and manage. They will progress at different rates and will compete for board attention, budget and resources.
Having the focus being on how technology transforms your business means that the focus is not on how a transformed business operates. These individual strategies (mobile; VR; IoT) have a very defined lifespan, once they are implemented; they are in essence complete. That means that these strategies fail to address opportunities that are not directly enabled by them. In other words the far bigger cross-silo transformation opportunities are not ever realised.
The most valuable transformations arise from changing the business through a considered range of technologies and management interventions. For instance, a customer strategy might use mobile along with other digital technologies to constantly increase personalization, engagement, and satisfaction.
This strategy finds uses for technologies well beyond mobile.
Test before you invest
Before diving head first into digital transformation, the considered business executive tests the solution first. Before focussing on flying-car futures as the new normal, many businesses can still derive tremendous amounts of value in transforming their business processes through better data-informed decision making, collaboration and even ERP.
The days of “no one ever being fired for buying SAP” are over. Big ticket investments that have not been thoroughly tried and tested can no longer run the risk of failure. The business models and the solutions need to be thoroughly tested and run through proof of concept (POC) phases before any final decision is taken on how to go ahead.
Elevate it to board level
Do not ask your technology leaders to drive digital transformation alone. The abdication of digital transformation solely into the realm of technology is a dangerous one. This fits very closely with silo thinking as the technology leaders do not necessarily have a view on the needs to the business.
Digital transformation must be a shared responsibility of the entire board. Each area of the business will be affected and as such need to have a say in how they are going to experience and manage that change.
Don’t get me wrong, there have been many successful transformation projects run by incredibly talented technology leaders, but they have all worked in tandem with the rest of the business and have not run the projects alone.
Transformation is not temporary
The thinking around digital transformation needs to be long-term. It is not a project with a start and end date. It is a capability. This means creating a transformative vision and engaging all stakeholders (internal and external) in that vision. Communicating the intent and then being strongly focussed on how to get there. This means orchestrating the entire business and coordinating smaller projects into one stream.
One of the greatest dangers in digital transformation is not failing to transform, but rather it is succeeding in transformation and then having to convince all your stakeholders why it was a good idea in the first place.
Transformation is mission critical and needs the attention and focus of the entire business and its stakeholders. Everyone needs to know why it is happening and what the end goal is.
Yes; there are things that we simply cannot know when we start this journey. There are new technologies and uses for those technologies each day, but we need to ensure that everything that we do is not consumed with the technology and the promise of tomorrow.
The real benefit of focusing on transformation instead of digital is that it highlights the fundamental role of leadership and organizational capabilities in creating the real business value from technological innovations.