Digital Transformation.
Two words you will have likely heard in relation to the use of how technology will improve your business or help you manage through disruption. Did you know that 70% of all digital transformation initiatives do not reach their goals (1)?
Why do so many digital transformation efforts fail to deliver?
While digital technologies provide possibilities for efficiency gains and customer experience, if the organisation lacks the right mindset for change or current practices are flawed then adding technology will simply magnify those flaws.
Just as you do not make a butterfly by sticking wings on a caterpillar, so you are not a digital company just because you use technology.
To understand why this is true, lets look at what is meant by Digital Transformation
What is meant by Digital Transformation?
Digital Transformation is the cultural, organisational, and operational change of business ecosystem through the smart integration of People, Information, People, and Technology across all levels and functions in a staged way.
Add to this the fact that a true transformation is not a singular project but a range of smaller deliverables achieving clear goals and we have a much better picture of what a Digital Transformation is.
If we consider the metaphor that a transformation is a journey, we can use the 4 points previously mentioned as our compass to guide us on the journey:
1. People – This covers two categories: The staff in your business and the customers you serve. The staff are essential to consider as they are ones who will who are going to be impacted, either positively or negatively. On the other side of the fence the customer is critical as they purchase your service or product and should be the focus of the benefits delivered from your transformation activity.
Your customers will tell you what they want, and your staff will tell you what is going to work. Not only should you be keeping them in mind, but you need to work with them to understand where your transformation goals must be
2. Information– Information is the biggest asset for any business and is collected in every transaction. This is everything from customer and product data through to company metrics and information on your staff. Good transformation requires you to understand the information you hold and how it will benefit you. Bad information can seriously hinder your business.
Before you start on a transformation journey you need to understand the information held by your business, what it is used for, and how you capture it. If you do not have a good information strategy in place, then you should not start the journey.
3. Process – Whether it is sales or fulfilment, service or delivery, chances are your business has processes in place for every activity. It is these processes that will benefit through the changes you will implement. In many cases the processes will be executed faster, and often you may even find that processes are unnecessary.
Effective process management is essential for successful transformation. You need to know what processes you have, whether they are adding value or waste, and how you want to see them transformed.
4. Technology – Once you have pieced together everything else then you can start to look at the solutions which will deliver the outcomes you need. This does not mean you need to go out and buy new solutions – you may find you already have the solutions in place to deliver what you need.
Digital Transformation is not about introducing technology into your business, it is about making sure you are using technology effectively. There is no single technology that will deliver “speed” or “innovation” as such.
A collective focus on all these areas will ensure that your transformation has the best chance possible of being successful.
Target State is an expert in delivering digital transformations for businesses. To find out more about these four points contact Anthony and the team.
References:
(1) https://www.mckinsey.com/industries/retail/our-insights/the-how-of-transformation