Digital Transformation: Respond to missing fundamentals

Digital technologies at a faster rate are reshaping businesses in most spheres but only a few organizations are truly able to transform their core through end-to-end digital intervention.

?As per McKinsey Global Survey on digital transformations, more than 80% professionals say their organizations have gone through such an effort in the past five years. Yet success in these transformations is proving to be vague. While earlier research has found that fewer than one-third of organizational transformations succeed at improving a company’s performance and sustaining those gains, the latest results find that the success rate of digital transformations is even lower.

?Being a transformation leader, as I closely reflect on the Digital Transformation efforts right from ERP implementation, to implementing any new digital SaaS product or infra refresh leads me to believe that most of these efforts are not yielding desired outcome because of 5 very fundamental reasons.

?I am listing down these fundamentals below in no specific order and urge you to reflect on these in your organizational context:

?1.?The Digital Journey

Digital Transformation is described as a journey and we decide our path in every journey. In DT we begin to prioritize from Application and IT Infra uplift, Digitizing Front and back-office Operations and digital marketing for acquiring new prospects. All these paths are important for digital transformation and hence each organization should strategize what comes for them at what stage or in parallel as per organization maturity. If your DT program is not thought through of these paths and what you need to do in short term, midterm and long term than it lacks the core objectivity and informed aspirations. ??

?2.?Complicated IT Stack and lacking architecture vision

?Conventionally, many organizations have allowed business unit leaders to pick technology products and build processes in isolation. E.g., the account payables team needs automation tools to match invoices faster, so the marketing team buys automation tools to run digital campaigns and the compliance department buys risks software, while the cybersecurity team buys the best in breed products in every category. This goes on and on, all in the name of transformation/automation, big data, productivity & compliance.

?These siloed decisions, while well intentioned, create a complex web of systems, data and processes that are complicated to manage, connect, and secure. They require a high overhead to keep working, often requiring far more FTE’s and budget than they are worth. Those tools are often underutilized, generally using about a few (< 20%) of the functionality they provide and overlapping with many other products in the organization.

?The solution lies in trying simplifying, map the process to see where the most friction exists and how technology helps or hinders the productivity throughout. This means greatly reducing the number of systems in place and requires strategic systems thinking.

?Review your current stack and ask tough questions - what does this cost? who uses this? how is the experience for the user? what are the goals and business outcomes for using this? can we further utilize what we already have before adding more?

?3.Missing the fundamental Transformation in Digital Transformation

Organizations undertaking the path of Digital transformation have to have a mechanism of reflection i.e., purpose of your organization’s digital transformation? This should be at center of everything you’re working toward when implementing new processes. Comprehend your stakeholders (Including Customer) needs, and the pain points and friction areas in your products, and services. Analyze your baseline processes to identify outdated rules, structures, systems and infrastructure component for improvement.

?4.Digital Leadership

With changing paradigm, Digital leadership is not limited to one department or for that matter referring to CIO/CTO. Digital leadership is longitudinal and lateral leadership on Digital Vision/Interventions. Let me demystify my point of view, longitudinal is when you access impact of identified digital journey on end-to-end processes (E.g., Order to Cash, Procure to Pay, Hire to Retire etc.) and think about involving an infusing digital accountability across Individuals involved in these Operations. Lateral is having a functional outlook on Digital Vision/Interventions i.e., what are digital goals and KPI’s for the function and functional leadership.

?This could be structurally addressed through formulating a program governance approach and setting up layered digital councils. ??????????????????????????????????????????????????????????????????????????

5. Human Element of Digital Transformation

?First and foremost is democratizing innovation culture that supports both?disruptive and?incremental transformation and this requires a deliberate effort on cultural acceptance of failure as there is nothing first time right when you try to change. Organizational Silos do exist and that’s a reality but overcoming that by being transparent and sharing can be achieved by formal (written down) change management and listening process.?It’s a time-consuming process as trust can’t be built in a day and required constant harnessing from top down.

In nutshell structurally and methodically your transformation program should align directly with your core business goals. It should empower employees to be better with ease of adoption and restrict bottom line, make your customer experience WoW with more reachable relevant systems that solve more customer issues, and drive topline for organization.

I can be reached for constructive advice and speaking opportunity on this subject and more related to transformation in your business.?