Digital Transformation is more than just a one-off "Denksport"

Today, innovative technologies like AI, cloud , 5G or mixed reality can create better, customer-first businesses, improve enterprise management, even build a next generation of intelligent industries. However, many organizations struggle to materialize the value of innovative technologies. Many see the adoption of new technology advances as a one-off activity, resulting in the creation of future legacy systems that delivers only nominal business value.

Digital transformation (BT) is referring to the change that is needed to increase the use of information system for an organization to gain an advantage, and there are 3 main challenges when it comes to DT:

1.?????? Seeing DT as a one-off activity

2.?????? Assuming technology is the answer

3.?????? Not having a solid value case

DT is B.A.U : Some organizations see DT as a one-off multi-year program that delivers the DT at a particular date for the organization to use over a 5 – 10-year period, after which a new DT program is being initiated to deliver the next DT a year or two later. Whilst the initial deployment might deliver some value to the organization it will most likely result in creating legacy systems that will further slow any future DTs. Organizations that successfully “deliver” their DT see it as an ongoing activity and not as a one-off. These organizations have established a people centered change structure; for them DT is BAU (business as usual).

Tech alone is not the answer : Another aspect is the fact that technology alone is not the answer. Cloud, 5G, or AI are all key ingredients, however, can only be a means to an end and not the end itself. Many DT get stuck as people and process changes are being neglected, most notably the cultural aspect. We noted in several reports that leadership teams were failing to get their employees to collaborate and to actively involve them in the digital transformation journey. They also failed to invest in people analytics and employee skill development. Culture is the result of how a company works and operates. It is composed of the collective experiences of employees and leadership; what they believe in and what they value. We define digital culture based on set of seven key attributes: agility and flexibility, collaboration, customer centricity, data-driven decision making, digital-first mindset, innovation, and open culture.

Show me the value : The third hurdle is struggle for companies to clearly outline a value proposition of their DT. Some initiatives can be justified in the traditional way, through quantified economic business cases. Other initiatives are funded as strategic foundation investments that build infrastructure and capabilities to be used elsewhere. These investments rarely go through the rigor of developing a quantified business case, but rather are undertaken as strategic bets. Collaboration tools or the establishment of shared services, for example, were often justified as relatively low cost/ low risk infrastructure investments to smooth cooperation and synergies among a distributed workforce. Other investments are truly bet-your-company, do-or-die propositions, in which the financial case of adopting an innovation is harder to establish. For many the real value of digital transformation comes not from the initial investment, but from continuously re-envisioning how capabilities can be extended with digital technology to increase revenue, cut costs, or gain other benefits. Key to success is the definition of a value case for the entire DT.

Summary

Successful DT organizations plan, design and deploy change all the time; they see and embrace DT as BAU. In addition, these companies understand that the answer is not just technology based. To successfully transform digitally means adopting new ways of working across people, process, and technology. And when they change, they know why and what for, as understanding the value of any change is critical to success.?

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