Debunking Digital Transformation

The start of the new year is a good time for a fresh look at your digital transformation efforts. With such a focus on digital transformations over the past years, a few malpractices have crept in. Many of these efforts are massive spread across multi-years, so it is necessary to revisit your vision and methods to achieve these goals. A few common myths to revisit.

• Digital transformation is a one-time thing

Digital transformation is not the last change you need, it’s not a destination, but a?continuous journey. Firms need to rebuild their operating model to incorporate the digital skeleton needed to change faster reflecting market needs allowing real-time adaptation. This transformative structure brings greater value for the customer at less cost to the company. Overall, digital transformations help firms up their game and shift how they create value.

Digital transformation is a journey and not a destination

Digital transformation must be disruptive

?Every digital transformation doesn't necessarily need wholesale disruption. Changing processes across the supply chain, manufacturing, distribution, and/or business models is required but changing them overall may not be necessary. Many firms have leveraged an incremental approach without changing their core business offerings. For example, many retail grocery stores didn’t have to change their business model much to incorporate curbside pickups. They did redefine the roles in stores incorporating this new distribution channel but it was an incremental change.

Digital transformation can be incremental instead of being disruptive

Digital transformation is IT’s responsibility

Adopting new technologies alone cannot bring digital technology across the firm’s value chain to adapt quickly to market changes.?IT cannot rethink how an organization pursues new business models and revenue streams leading to a transformative business model. These are core aspects of the digital transformation and just using the latest technology in a piece-meal manner does not achieve that purpose. Instead, IT and business must co-create this digital journey. CEOs usually lead the digital transformation to make large-scale investments and large-scale changes. CEOs partner with CIOs. XHROs, and other senior leaders to bring the collaboration needed to pair business-focused philosophies with rapid application development models.

Digital transformation needs leadership commitment for its success

You need new talent to pull off your digital transformation

Your employees usually are more adaptive and aware of the multiple forces of disruption. Leveraging your current workforce to adapt and creating a learning work culture helps cut downtime to digital transformation. Engaging employees instead of herding them to transformation creates champions for your cause. Overall, caring for your employees and upgrading them by engaging and learning helps firms through the era of talent shortage. These firms don’t have to go talent fishing to find the right skills, instead, they work with their managers to identify individuals that need the motivation and can pick up the right skills.

You can elevate your current employees to lead your digital transformation

Digital will replace physical

?In my article, Be digital-first to be consumer-first, I recommended smaller financial firms to make their digital offerings as personal as their physical offerings. Many of the readers told me smaller credit unions and banks are an integral part of the society fabric where they physically operate so they will not change their physical presence model. I totally agree. Physical presence for these firms is part of building the emotional connection with their customers but using the digital part (data analysis and AI) can help them understand the customer needs better. Overall, this hybrid model should shift the focus from their own offerings/products to the customer needs. Many digital native firms (for example Amazon, Bonobos, and Warby Parker) have realized the need for physical stores to create an emotional connection.

A hybrid (physical and digital) presence can deepen your customer connection

You must overhaul your legacy systems to be digital

Digital transformation efforts should learn from earlier efforts of modernizing IT. Replacing multiple critical systems at the same time can be really disrupting. Most firms with successful digital transformation have prioritized customer-facing applications to be the first to be re-written. Legacy back-end applications are then replaced in a modular, agile fashion. This incremental bridging approach needs interfaces in the middle to make the new systems talk to the back-end legacy. Re-writing legacy systems as microservices can be a good idea as well. As the legacy system is decommissioned over time, customer needs do not have to wait.

Incremental planned changes can avoid service disruptions

The ideas, views, and opinions expressed in my LinkedIn posts and profile represent my own views and not those of any of my current or previous employers or LinkedIn.