Data driven Digital Transformation

The elements that go into transforming a company

What are progressive CXOs and top management doing to advance digitalization efforts and transform their companies? From our studies, research, and empirical experience, here are the fundamental elements we’ve noted:

• A critical and foundational task of a CXO is raising the Digital IQ and awareness of top management to align them semantically on real priorities. Leaders must be up to speed with the changes that are taking place within their industry.
• Leadership must possess a thorough understanding of their customers: changing demographics, new behavior patterns, expectations and interactions. CXOs who incorporate these customer dynamics in the design of new products, services and value propositions will gain relevance and a competitive edge.
• Digitalization was once limited to mobile and social platforms as well as other various marketing technologies. It has since expanded to include multimedia, cloud, IOT, automation and AI. All these technologies are being used in some form or another to redefine customer value propositions.
• Once customer value has been redefined in products and services, digital technologies can be leveraged to deliver low-touch, high-velocity and connected experiences that deliver customer satisfaction and operational efficiency.
• Finally, digital transformation does not just affect business models, products and processes; it fundamentally changes leadership style, organizational structure, decision-making, talent and company culture.

Companies and leaders that master these fundamental elements will lead the way in transforming their organizations to become more relevant, competitive and prosperous in the digital age.

Using Data-Driven Insights to Transform Your Company

Assumptions, personal experiences, individual perspectives and risk profiles often distinguish the behavior of leaders. Herein lies the greatest challenge for CXOs: a misalignment among the leadership caused by personal human factors. Because of the variance in their respective points of view, each leader sets different priorities for themselves, their teams and so operates in a silo. CXOs must first develop a harmonious view of transformation starting at the top management level, with a clear vision of the affect such initiatives will have on the company-wide level.

That’s why the golden principle of the digital age is that data trumps assumptions, trumps hunches, trumps personal bias—this is certain. Use of data collected within and by the company, or from independent research, will hedge against these biases and personal agendas thanks to their objectivity and inherent commitment to company-level priorities.

CXOs who rely on benchmarking better understand their competitive digital maturity on both business and IT levels. Finally, they ask very specific questions tied to their customers, markets, operations and technologies. A combination of these data points helps CXOs manifest a coherent, customer-driven vision and strategy and to prioritize their execution optimally.

Define what digital transformation means

Not many leaders are clear on what constitutes the totality of digital transformation, let alone how to achieve meaningful ROI and business impact.

First things first: digital transformation is far more than simply updating a website, making an offline process online or reinventing stakeholder experiences. It’s the holistic transformation of an organization from the inside out and a rethinking of the entire value chain via investments in sophisticated digital capabilities, sometimes at the expense of a company’s previously successful business models.

Transforming your business is as much about people—training, communication and alignment—as it is about technology.

What are digital KPIs?

Digital KPIs are lagging and leading indicators of the adoption, acceptance, performance and scaling of newly introduced business models, processes, products, services and technologies across the stakeholder base they target. These KPIs vary, depending on your industry, geography and role. They are critical to calibrate your directional alignment and to course correct as necessary.

Be the digital transformational leader your company deserves

The question to ask yourself is: are you a CXO who chooses to ignore the data and believes the current path will continue to deliver successful outcomes? Or are you a leader who trusts the data and understands what digital transformation means, embraces the cloud and prioritizes support of R&D?

For digital transformations to succeed a CXO must be:

• The visionary: envisioning and articulating a viable, relevant and engaging customer-centric value proposition that focuses on core competencies while combining current and new ways of thinking.
• The role model: embracing and championing the “transformation = growth” mindset.
• The architect: focusing leadership attention and allocating financial resources on evolving business transformation priorities.
• The catalyst: igniting momentum within the transformation journey and leading with actions that bring credibility and visibility to the transformation initiatives.
• The enforcer: monitoring and measuring progress, reporting on qualitative metrics and ensuring accountability throughout the enterprise of transformation initiatives.
• The evangelist: inspiring and motivating employees and key stakeholders throughout the organization, as well as the board of directors, to embrace change.

Digital transformation is no small task. But then, nobody ever became a CXO to go after small things. When all is said and done, the journey of transformation begins with the captain of the ship.

When your viewpoint of digital transformation is limited, the transformation itself will also be limited. Remember: effective and impactful transformations are holistic and comprehensive.

Proceed to the nearest cloud

Transformational leaders across industries are aggressively adopting cloud technology.

Cloud technology enables companies to redefine their value propositions and deliver new services and applications at an accelerated pace, making it an essential part of any digital transformation strategy.

CXOs (and CFOs) need to reconsider their traditional enterprise-wide ROI evaluation models with models that are built on rapid migrations to the cloud.

Remember: faster iterations mean faster innovation and faster evolution—hence, faster transformation. But it won’t happen without some commitment and investment.

Prioritize R&D

90% of R&D leaders say their CXOs do not fully understand or embrace the urgency of digital transformations taking place in their industry.

True digital transformations occur through a reinvention of the value chain from the inside out, which includes the entire product and service portfolio.

Most of the CXOs surveyed have some understanding of the importance of embracing digital transformation at the R&D level. However, they are not taking the actions necessary in a timely manner.

CXOs absolutely must embrace digital change at the product level by supporting and prioritizing the needs of their R&D leaders.

Here are three strategic ways business and IT leaders drive inside-out digital transformation.

Create Cross-functional Alignment

Creating and maintaining alignment among key stakeholders is essential when building an inside-out, game-changing digital transformation strategy.

Inside-out digital transformation is holistic. Collaborating cross-functionally with leaders will make your - and their - transformations successful.

Prioritize Employee Training

Transforming talent through training is number one predictor of success in digital transformations, in ALL departments:

They have a clear and holistic definition of transformation.

Make no mistake about it: true digital transformation is an inside-out process involving the complete reimagining of the company’s product and/or service portfolio. This may not be the general understanding of most R&D leaders. But once these leaders’ companies begin to be disrupted, they’ll start to understand the benefits other companies are reaping from reinventing their value chains and they’ll know they have no choice but to believe in, accept and fully embrace a holistic approach to digital transformation.

2. They embrace analytics.

Just like digital transformation, analytics is another term that can mean very different things to different people: analyzing what, how and to what end?

Unfortunately, the increasing pressure to launch products quickly has made embracing analytics a must for any company seeking real digital transformation.

In R&D, portfolio analytics is beginning to play a massive role in how companies are strategizing for change. R&D teams across industries are investing aggressively in dashboards, data lakes, AI and automation, with pharma, hi-tech and healthcare industries leading the way.

The most highly effective R&D leaders are using analytics to build new products and services based on what they see coming ahead, not what’s happening right now.

3.They use telematics.

Telematics, or the ability to establish two-way connectivity with users and analyze the data generated from this relationship, will soon become a core capability of driving digital transformation in R&D.

Companies already seem to be catching on: 75% consider telematics to be important and are using it in their products and/or services.

Online applications, mobile apps and IoT/smart devices are just three examples of methods by which insightful, telematics-based data is being generated today. Basing product portfolio research decisions on customer data leads to the creation of customer-centric product roadmaps—a powerful element for success.

4.They invest in role-based training.

This seems like a basic piece of advice, and yet, it’s oddly and quite commonly ignored by most companies, including their R&D departments.

Training on new processes, technologies and communications is the single biggest determinant of success in digital transformation. And yet, most companies aren’t investing enough in role-based training for new R&D processes and technology.

A key aspect of this is getting buy-in from the executive team and other key stakeholders, which is challenging. Clearly communicating the R&D vision to the CXO, board and internal partners plays a critical role in justifying training investments.

Case in point: lack of training typically leads to an over-reliance on existing legacy technologies resulting in a failure to adopt far more effective and powerful newer technologies, mindsets and strategies.

5.They have a digital transformation playbook.

The fifth perspective that R&D leaders driving successful digital transformations have in common is a digital transformation playbook.

No—this isn’t a series of lines, x’s and circles on a whiteboard, it’s an actual game plan, a very specific approach to transform their companies.

A typical digital transformation playbook comprises the following:

• Building a culture of digital content and/or digital connectivity that embraces data-driven decisions in R&D.
• Drafting a step-by-step guide for R&D innovation that emphasizes benchmarking and training.
• Developing a cross-functional team between R&D, marketing and sales.
• Evaluating the relevance of your product-services portfolio to customers.
• Drafting a plan for digitizing your R&D processes.

With your digital transformation playbook, what you’re really doing is empowering yourself to understand holistic transformation, embrace analytics, use telematics and invest in role-based training. Following a holistic approach will enable you to develop powerful new strategies that bring genuine change and disruption and avoid the stop-and-go-and-course-correct loop that so many R&D departments get stuck in.