Digital Transformation with Digital Evolution

Digital Transformation is the outcome and Digital Evolution is the most successful path to digital transformation. Digital Evolution enables a business to rapidly coordinate and implement immediate benefits from various transformation types and validate the impact of those changes. This happens progressively against a broader vision as opposed to demanding abrupt change in the case of the single-step digital transformation.

The approach continuously validates the coherence of the transformations in roles, customer journeys, markets, and data systems synchronously with advances in technology and organisation capabilities.

The dangerous hidden truth in digital transformation is that it presumes organisations are consciously competent with their own processes. In fact, most organisations only know a subset of common processes, and more typically only a subset of the possible permutations of those.

Go as far as you can see; when you get there, you’ll be able to see farther. J.P. Morgan

Digital Evolution promotes the approach of “Start simple”, and “Start with what you know”. Everything else is an exception. The key to success is that you must DEMAND that the technology also follows the same principles. You must be able to capture what you know into the technology without being forced to find out or, more likely, make up the missing information.

Tony Saldanha, the ex-COO of Procter and Gamble shared services, is one of the few leaders who has successfully executed a major Digital Transformation in a large organisation. In his book, “Why digital transformations fail”, he describes the evolutionary approach which forms a modern bible of how to plan for success in digital transformation

Leapfrog vs Evolution

Saldanha has looked independently at the exponential business acceleration potential of certain exceptional enabling technologies, and describes the rapid path to exponential transformation through the application of these technologies ‘leapfrogging your competitors’.

Although this leapfrog approach has merit for innovative technologies creating new products, or new markets, it does carry risk. As Saldanha himself explains these should be adopted with a kind of “VC” approach: Invest in 10; expect 1 to be exponential, three-four to be “2x”, and the rest to fail.

The leapfrog approach may work where an authoritative approach can be taken, however, our experience is that this a high-risk strategy when applied to running operations in an established business as it also runs the risk of disrupting related operations. Imagine the reputational damage caused to an investment bank that creates a “leapfrog” service for clients that suffers a disruption in service such as happened to the Revolut card.

In any case, any moon-shot potential that will create a leapfrog must at some point fall into a business-as-usual mode. In this mode it must be continuously improved to maintain the leadership initially created.

This falls back into the evolutionary model. Digital Evolution strategy, requires the establishment of this Digital Fabric in business operations. It requires a shift in traditional technology thinking from the people, process, and technology model where technology is really just the legacy “Data Systems”.

Technology footprint is rapidly increasing into process area with process automation and service orchestration. It is also rapidly emerging in the people area with AI and adaptive systems.

This creates a new model for technology in three layers:

? Data Systems

? Processes and Operations

? Interactions

Saldanha also proposes organisations should shed the evolutionary model of innovation that has served large organisations well for decades in mitigating risk in transforming operations. Whilst Saldanha’s approach has merit in some scenarios, a technology led or authoritative “leapfrog” based approach to mass digital transformation of existing operations has shown high failure rates in practice.

Cortex has worked with clients and partners to develop the digital evolution strategies and digital transformation methods that enable organisations to follow the familiar evolutionary path. They can avoid the failure of the single moon-shot leap to digital transformation whilst integrating the exponential potential of specific transformational technologies in the digital context.

Timing is key; a rapid and hard push to leapfrog the next stage has the chance to succeed so long as the time window is short; usually three-six months, and the subject is focussed; a product, a service, or a process.?

This leapfrog must be integrated into a digital fabric that is able to integrate the management and on-going development of the service. This mitigates the risk of business or process changes.

However, the evolutionary approach permits this rapid advancement, and permits business and process change. In this way the evolutionary approach mitigates the risk if the stage lasts longer.

To read more about how to Digitally Evolve towards Digital Transformation, download your free copy of my whitepaper called "Unlock your Banking Digital DNA"

By Bianca C. Patru

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