All that glitters is not gold, when it comes to Digital Transformation.

Digital Transformation is the buzz word of yesterday. If you haven’t already started your digital transformation, you are probably wondering where to start and how to catch up. Digital transformation comes in many forms. While some organizations go after a true transformation, some just see this as a change in which IT tools they use. I have been involved in many conversations with colleagues, friends and clients over the past couple of years.  As many companies and NGO’s get into their digital transformation effort, I find myself having the same conversation over and over again with different organizations. Beyond the feeling of repeating oneself, I see there is a pattern emerging. I share below some of these questions and a short version of my typical response:    

What should our digital transformation strategy be based on?

Digital transformation strategy should not just be based on, but actually be a key part of your business strategy.  If you do not need to transform your business, you probably do not need digital transformation. Where do you want to be 2 years from now? What would step-change the success of your company? Is your business model obsolete? As you work the answer to some of these questions, make sure you have voices from digital experts.  Think how you can disrupt your own business model – better you do it than a competitor. If you were a startup, would this be how you set your business? The more you think about the crazy, impossible ideas, the more you are likely to define breakthrough transformation. If digital transformation will bring incremental change to your business, like “bring 5% productivity”, it is not worth doing it. After all, who ever saw 5% productivity and made money from it? 

We do not have time for digital transformation, we have key business priorities to deliver.

Best transformation happens when it is one of the few choices the whole organization goes after.  If it will not be in your top 5 priorities, then don’t do it.  If you are not sure, one interesting question to ask is: what would happen to all these key business priorities if your company was operating differently.  For example, if decreasing manufacturing costs is a key priority, do you want to keep negotiating material supplier contracts or can you use data analytics or online marketplaces to dramatically reduce your material costs?  You do not need to digitize an outdated business model.  Do not do digital transformation, if you will not actually transform your business.     

Company leadership does not understand technology. How can we do digital transformation? 

This is a real challenge. Leadership in many companies may not be digitally-savvy or early adopters of new technology. It may not be their natural tendency to think digital. Fear not! Make sure you bring the voices of people with strong technology AND business understanding to the discussion. These may or not be from the IT department. What is important is they understand the business and can translate technology into business outcomes. Expose your executives to other non-competing companies who are leveraging technology and getting breakthrough results. Set up reverse mentoring programs with junior employees. (These are not just helpful for digital understanding, but they are also a great way for the executives to keep in touch with the future leaders and new generation consumers.) Importantly, as you are developing the plan, show them quick-win’s. A small pilot in a tiny part of the business can go a long way for giving them a reason-to-believe for the true potential of transformation. 

Which department owns digital transformation?

Please do not give your IT department the digital transformation project and walk away, hoping they will get it done. Worse, please do not create a new department for digital transformation. In either case, you will create a silo and not enable true transformation across the organization.  Digital transformation should be sponsored at the highest level and owned jointly by key functions. IT function will play a key role: They may provide thought leadership, they may provide project managers, they will help build the strategy, they will bring loads of expertise. But if you “dump” this on IT, you will never succeed.

We are moving to the cloud. Why is our digital transformation project struggling?

Hopefully, by this point, the answer is obvious.  Getting new technology, for the sake of technology, will not transform your business.  It may actually do more harm than good. Cloud is a great enabler for the right business challenges: Instant collaboration, consumer interaction, data science, internet of things, remote working, ubiquitous computing, not to forget simplification of the IT footprint. But if you haven’t linked it as an enabler to your business strategy and key challenges, you are shooting in the air.  IT needs to serve the business, not the other way around.   

Bonus Advice : 

Define upfront what the business value you are going after and hold yourself accountable to that. Do you want to increase sales, accelerate customer response time, cut down product development time? It is a good practice to define these targets and agree how they will be measured, what is the baseline value, how you will separate the value of transformation from natural business improvement. It is not impossible. It takes discipline and commitment. 

It may all sound very simple.  None of this is rocket science. Yet, in a post-pandemic digital world, this is still a struggle for many businesses. Agree? Disagree? Do you hear the same questions or see the same mistakes? Looking forward to your perspectives!

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Güniz Louit is the co-founder of Astrasophia, an advisory company with deep expertise in Information Technology, Shared Services, Leadership and Business Transformation.  We partner with our clients to deliver great business outcomes.