Secrets of Digital Transformation

Technology is certainly one of the greatest forces changing how business gets done. There is no business today (B2C or B2B), that is impervious to pressure from increasing expectations of powerful and digitally savvy customers. Given this new environment, to become a customer-obsessed organization increasingly translates to a need to transform into a digital business.

According to Gartner, “Digital business is the creation of new business designs by blurring the digital and physical worlds. Digital business promises to usher in an unprecedented convergence of people, business, and things that disrupts existing business models”. Just imagine the possibilities: Smart machines can now reliably predict outcomes; customer needs can be anticipated with greater certainty; physical experiences can be greatly enriched with digital experiences; operations can become more agile and dynamic to market realities; and product innovation can now include customers and partners throughout the value chain.

Your digital business strategy needs to be your business strategy and here are three key things an organization must do to become a digital business:

1. Adopt a digital-first mindset

When everyone in the company embraces what is now digitally possible, the business can respond faster and deliver the experiences customers expect. The more successfully a company builds a digital workplace, the more likely they are to attract the talent they need to establish a digitally-minded culture to support transformation of the business.  However, where leaders lack urgency and fail to share a vision for how technology can change the business, these organisations face competitive obsolescence.
A good tool is to be able to ask and answer two key questions as part of your digital transformation:
1) How is your business being changed by digital technology?
2) How is your core business model being changed by digital technology? Answering these questions requires the mindset of a digital company.

Business units other than IT are leading the digital transformation

Although IT should be integral to the process the reality is that Marketing, Sales, Operations and other business units are often leading the digital transformation. In fact, business-funded technology is expected to account for more than 50% percent of total IT spend. A big problem for IT is that although they have solid development methods in place for solution delivery, those methods are often geared to well-defined requirements and mature technologies but not to emerging disruptive digital technologies and practices. This poses a larger challenge for organisations (of which there are many in my native South Africa), where much of IT was outsourced because of automation and efficiency were satisfactory goals for IT. However, this is no longer sufficient goals because organisations now want consulting partners to help with innovating and Improving Customer engagement, Empowering Employees, Radically Optimizing Operations and even to Transforming their products.

2. Reimagine your business

More than simply digitizing traditional processes, digital transformation requires a complete rethinking of how a business operates in the modern world. This includes reimagining the customer journey to enhance how people experience your company across marketing, sales, and service, as well their experiences with your products and services. It means rethinking your operational processes to not only improve efficiency and cost savings, but to speed time to market and differentiate your business.

It may mean evolving your business model and overcoming corporate anti-bodies

It may mean evolving your business model to redefine your industry or take on new market opportunities.  This ability to digitally reimagine the business is largely influenced by a clear digital strategy supported by leaders who foster a culture where it embraces change and seeks to invent the new. Many organisations fail at this because they fail to address anti-change antibodies in the form of people (often old guard mangement) that hold on to the status quo and can drive a business into irrelevance faster than even the most poorly designed digital strategy.  It is culture and strategy, not technology that drives real digital transformation (source).

3. Connect everything

Connecting people, processes, things and data securely across the company is the cornerstone of digital business. It’s what enables you to make the invisible visible and discover unprecedented insights. When everyone, and everything, from R&D to operations, to marketing and sales to the end customer are connected, the business can move faster and deliver exceptional, differentiated customer experiences.  For example, previously businesses designed, built, produced and shipped a product, then customers bought it. That was the end of the cycle.

Organizations are building in continuous feedback loops through IoT

Now organizations are building in continuous feedback loops – sensors in product, after-market services, customer feedback from a variety of channels. Transformation requires these rich systems of intelligence that represent the combination of technology, people and process (not just technology) that enable these feedback loops, and define an organization’s competitiveness and ability to change the entire landscape of the industries in which it participates. The internet of things (IoT) is today a practical and cost effective way to connect things, people and software to drive the digital feedback loops a digital business needs.

So in closing, technology is litterally everywhere, and it is shaping growth, disrupting industry landscapes, and providing the catalyst for new business models, products, services and experiences. Through technology, businesses are able to digitally transform themselves and this is the key to innovation and growth.