We’re living through the midst of the Digital Age, where technology is evolving at a rapid rate.
The events of the last year have added more pressure on companies to adapt quickly and keep pace with ever-changing digital demands. Then why, according to Forbes, have only 7% of organizations fully transformed to digital businesses?
The stats are staggering: When corporations launch transformations, approximately 70% fail in execution. What’s more, $3 million is wasted every minute by organizations globally, through ineffective implementations of business strategy. That’s nearly $2 trillion per year.
Despite setting goals and objectives for digital transformation strategies, many organizations are falling short in their implementations and not realizing their digital ambitions. There are a number of reasons for this.
- Setting the Bar Too Low
Last year’s economic uncertainties have (understandably) made us all a little apprehensive. As a result, many organizations’ boards aren’t setting the ambition and aspiration expectations high enough. The leadership team must own the conviction from the outset and drive the change narrative throughout the organization. Buy-in is key. You must clearly communicate the importance of the transformation, why the organization is doing it, why the organization needs to make it happen, how it will impact employees and the business, what good looks like, and the desired outcomes required. Once you have built alignment and buy-in across the enterprise from top to bottom, a successful transformation is sure to follow.
- Not Having the Right Tools
To drive the transformation, you need sufficient skills, capabilities, and resources in-house. Here is an area where many businesses fall short. In cases where the appropriate skills do exist in-house, they may not be available, or can only work on the program part-time if they are committed to other projects.
- Lacking the Creative Juices
Big ideas require big brainpower and big perspective. When companies lack a true understanding of ideation, creative thinking and journey mapping, they are often unable to formulate a true and unbiased outside-in perspective of what’s really needed, adopt agile processes, or drive program change and performance management.
- Becoming a COVID-19 Casualty
It’s true that COVID-19 disrupted the organization playbook. Implementing digital transformation projects during the pandemic was like “strategy in real-time.” But was it really a strategy? Did COVID-19 really accelerate transformation projects that were aligned with business strategy? In most cases, the answer is ‘no.’
2020 was less of a digital transformation accelerator and more a series of implementations of tactical digital projects to deal with the disruption of COVID-19.
Action vs. Reaction
The pandemic created the immediate need for tactical implementations; what resulted were reactions, not strategies. As an example, IT departments were quick to implement digital home workplace initiatives to enable digital commerce, the selling of products and services, and serving/supporting customers.
Conversely, many other digital implementations were shelved because of the focus on responding to the pandemic. Countries across the globe are facing the threat of economic recession, causing technology spending and budgets to shrink. But there’s still a lot more potential for digitalization and transformation. So what is the next wave? Where should you focus on and prioritize your efforts and enterprise dollars? What’s the new normal going to look like for your business?
Organizations’ business leaders, more so than IT, now need to understand how best to execute business strategies in an agile, Mode 2 manner. It’s not just about implementing projects. It’s about stakeholders being more involved, optimizing the value of information assets, driving continuous organizational change and business transformation.
Digital transformation is a core enterprise strategy and should not be a collection of individual experimental projects — unless they align to business strategy with business cases and ways to measure business outcomes and realized value. Digital transformation impacts the behaviors and attitudes of all stakeholders, including employees, customers, citizens, suppliers, partners, and financial institutions.
Ask yourself: Does your business fully understand digital? Does the business appreciate the potential embedded value of the information assets that sit idle in your databases?
Thinking Differently About Digital
Pandemics and recessions are massive events that have a significant impact on society, industries, markets, education, and governments. COVID-19 brought forward advanced spending on tactical IT solutions. CIOs, CDOs, and IT were given additional budgets to help their organizations respond to the challenges posed by the pandemic.
A year later, we’re seeing that many CFOs are now asking their CIOs to reduce spending and do more with less. Starting in 2021, budget reality and IT spending will make it tougher for many organizations to decide which technology investments will deliver the best outcomes.
Organizations will need to start thinking differently about their digital implementation plans by focusing on:
- Monetizing information assets
- Algorithmic business
Organizations need to think more seriously about what value can be leveraged from information assets. Once you appreciate how monetizing information can help, can you go to the next stage of transformation?
Consider your strategy. Enable digital possibilities and get an outside-in viewpoint. Utilize these findings to understand your business’s value-adding priorities with a 2021 budget background and create a program.
To date, digital transformation has been technology-driven by capable IT organizations with the ideas coming from CIOs, CDOs, and CTOs. Business leadership teams have put the onus on IT — having them figure out what digital transformation initiatives should be. That process won’t work today. Now, business leaders need to pioneer the digital transformation effort in a world where attitudes and behaviors have radically changed both during and after the pandemic. It should be a business-led transformation with the help of IT — not the other way round.
The New Normal for Customers, Suppliers, Employees, and Investors
Companies must consider everyone as a stakeholder. To imagine the future state and what to expect as you move towards organizational transformation, consider the following prompts:
- First, engage outside help to unleash the power of opportunities that sit within the walls of the enterprise. Leverage agile boutique agencies and start with creative thinking and thought experiments to create new customer journeys for now and into the future.
- Think about what the value-creating portfolio and supply chain can look like by leveraging your information assets to the edge of the enterprise, including your ecosystem.
- What new and exciting impact will that have on your customers, employees, partners, and devices as they become more connected?
- If you’re deploying Robotic Process Automation (RPA) and Machine Learning (ML) and creating fully connected and automated processes, consider the future roles of your employees and where they will fit in the enterprise.
By really thinking about leveraging the value of information assets and building a strategy to unleash new opportunities, you can realize your digital transformation ambitions. You can create a different world of value through new and connected products and services — new connected revenue streams enabled by end-to-end processes — when you realize increased shareholder and stakeholder value. This is the foundation for achieving your strategic goals as you move through 2021.
It is not easy to imagine this environment, let alone create it. Business leaders do not have a ready-made, built-in capability of how to do this, which is part of the reason why digital transformations often fail.
This is a skill set that you need to attain through partnering, hiring, and training. Organizations must have an outside-in approach — they cannot succeed solely through inside talent. If the next phase of your digital strategy is optimization, then figure out what part you play. Consider partnering with agile, creative thinkers to develop your ideas. Let them help you leverage the idle information assets and capabilities that rest in your databases and deliver new, differentiated, and connected revenue streams. Together, you can determine what’s on your business horizon, what potential outcomes can really look like, and how you can win.
Innovation creates value.