Digital Transformation Simply Explained
Tarry Singh
CEO, Visiting Prof. AI, Board Director & AI Researcher @ Real AI Inc. & DK AI Lab | Simplifying AI for Enterprises | Keynote Speaker ??
Hype or reality?
Given all the cacophony around the new trend called Digital Transformation, it is challenging for a business leader to embark on such transformation journey if s/he has difficulty understanding what it is, what it means for his organisation, what s/he needs to do to transform his/her organisation and finally how can it contribute to organisational competitiveness.
We know and we can literally feel that this time around something huge will happen. As consolidation and/or transformation of functional roles and technological layers continues to level the playing field, stakeholders within organisations are taking up leadership roles like never before! Both suppliers and buyers are aware of this change and quite understandably it makes people nervous.
I remember in my previous management consulting start-up when we started talking about the concept of "cloud sourcing" as a challenger to the traditional outsourcing, it made the CIOs very enthusiastic (initially) and the vendors were quite nervous. This challenged their current operating model, delivery model and of course their revenue model. I remember we had invited CIOs, CTOs, CEOs of large corporations to participate in our thought-leadership book and they shared amazing insights with us. (If you want a copy of the e-book please drop in your email address in comments and I will ensure that you get a copy)
We used this quote to challenge the CxOs.
There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order, this lukewarmness arising partly from fear of their adversaries ... and partly from the incredulity of mankind, who do not truly believe in anything new until they have had actual experience of it.
NICCOLO MACHIAVELLI
New world order (if you will) will eventually replace the old world. We used this famous piece from Chapter 6, "The Prince". We thought it fit really well given the tectonic changes that had started happening way back in 2008. You should read that book, it is great read!. We thought it was appropriate and with digital transformation wave I couldn't think of any better quote than this one.
So what is Digital Transformation in layman's terms?
Wikipedia says "Digital transformation refers to the changes associated with the application of digital technology in all aspects of human society. Digital transformation may be thought as the third stage of embracing digital technologies: digital competence → digital literacy → digital transformation. The latter stage means that digital usages inherently enable new types of innovation and creativity in a particular domain, rather than simply enhance and support the traditional methods."
A bit too simplistic? Let's dig a bit deeper. The reason for any business to survive and thrive is to serve its market and consumers constantly and with purpose. That would simply mean that sales and customer-service should be the core reason of existence for any firm. Marketing and IT must take leadership roles to proactively participate in the customer acquisition and customer retention. Any organisation that wishes to gain marketshare, customer mindshare and book double-digit growth must exploit the emerging technologies. But they need to first transform their workforce from analog to digital mode. Any organisation that succeeds in doing so would have been digitally transformed.
To do this CIO has to move from the survival role (management tasks) to revenue-contributor roles.
Let's look at the factors without which digital transformation would be impossible to achieve.
- Cloud layer (Internet-as-a-platform or Cloud Computing): You've heard enough of this so all I'll say is that to run a successful digitally transformed organisation you will need a cloud environment. It is scalable, flexible, elastic and cost-efficient. Without cloud layer you will not achieve the required automation and orchestration for the next layer.
- Data layer (Big Data and Analytics): Both structured and unstructured data is streaming into your data bank, be it relational databases or non-relational datasets. This is essential for your sales, marketing, customer-service, R&D and product divisions.
- Social Layer (social computing): This is part of the experience layer that creates a vibrant marketplace for your employees, partners, suppliers/vendors, customers (existing and potential) and public.
- Devices layer (mobility): We have officially entered a post-PC era. We work and use several devices simultaneously and it is only going to intensify with wearable devices such as smartglasses, smartwatches, smarttags.
CIOs, CDOs, CMOs, VP Sales and CEOs must take a simple approach to understand what they intend to achieve and how it fits into the corporate's overal digital strategy. Doing this will prevent them from embarking onto their own individual transformation programs and thereby ending up being isolated. Example of the failed digital transformation program of BBC comes to mind. The CIO/CTO eventually was fired. You cannot do it in isolation!
Here is a simple sketch of the fully functioning digital organisation.
So what should the CEO do to ensure the success of a digital transformation program?
- Ensure CIOs take up the role of Integrator/Collaborators across marketing, sales and customer-service domains. They cannot succeed alone if they do not have the CMOs, CDOs, SVP Sales and CSOs (yes security officer as well) blessings. This will ensure that CMOs, CDOs do not by-pass your business and technological insights. They need it and CIOs must demonstrate it actively!
- CIOs must drive IT-enabled revenue contributor programs and help CMOs, CDOs to the same. Help CMOs, CDOs, SVP Sales and Customer Service develop capability maps and align them to the digital transformation program (see one example below, I will write a detailed article with focus on marketing, sales, customer service, R&D etc in later articles)
- NewCo = OneOrg: All CxOs must actively participate in moving away from disconnected state to focus on achieving a fully networked organisation. With capabilities and revenue generation/contribution initiatives aligned with the digital transformation program,The "NewCo" should have become "One Org". Nothing could please the customer more than this.
In Conclusion
It is very important to see digital transformation program as a business led IT initiative and therefore a fully networked organisation with goals that are aligned to business goals such as "20% revenue growth in FY2015" will tremendously motivate CIOs to improve marketing, sales, customer service & R&D capabilities with IT-led innovative solutions.
P.S: Here is an example of a marketing capability map.
Global Head of Analyst Relations & Strategic Programs
10 年Great blog #Tarry Singh One of the challenges for Digital Transformation is the enterprise mindset ( a collective phenomenon of the mindset of employees across the enterprise) - if this is open and embraces change, better than other enterprises, then thats a competitive advantage. If we look at companies like Kodak, Nokia, Orkla - they either shifted across industries or across service lines in time ( Kodak fell through at one stage). We need leaders who can paint the big picture, inspire employees/stakeholders and propel them to embrace change. The right mindset will help build new skillsets required for the future. - Ramesh (Twitter @Ramesh_Ramki)
Excellent read. In the BBC example, it seems naive to look for a single solution, in this case Siemens, to deliver even back in 2009. Did BBC even know what the end state would look like given the flux in the moving parts. This transformation will need multiple layers to come together, as you rightly pointed out
Senior Director at Cognizant
10 年good articulation