Going digital is a buzzword in the boardrooms. According to the 2020 Digital Transformation survey by BDO Digital, almost 100% of the middle market organizations have either developed or are developing a digital strategy. According to an Accenture survey, over 60% of the C suite executives had digital transformation as one of the top 5 priorities for 2020. 40 percent of all technology spending will go toward digital transformations. These are big numbers pointing to the fact that digital is set to accelerate. In order to cater to customers who are more connected and have greater demands, companies plan to invest in technology that helps them connect better with their customers, increase engagement, reduce costs and create efficient and resilient supply chains.
There is no doubt that technology adoption will increase manifold and digital will emerge as a key focus. However, in spite of the fact that technology brings huge business benefits, there are many digital initiatives that fail and do not deliver the right returns. One of the reasons for this is that most enterprises think of a digital transformation as new technology deployment. The fact is that it goes much beyond that. It is equally about developing a culture that embraces change and digital thinking. Digital needs to be a part of everything that an organization does and needs to be embedded in its DNA and goes much beyond mobile apps, AI chatbots, etc.
As much as it is about technology, it is equally important to understand which technology or solutions will help the organization achieve its business goals. Cloud, big data, mobile apps, internet of things (IoT), AI, Machine learning, blockchain, etc. are amongst the many solutions available today. Howsoever promising, it is quite possible that blockchain does not address the specific challenge a company is facing or that the mobile app is not required for the intended outcome to be achieved. We have seen companies building a plethora of digital solutions including mobile apps for their consumers, staff, sales enablement solutions, etc. but all built without a defined objective. Every enterprise's needs are unique and they need to figure out the best solution that addresses their needs and helps them achieve the business objectives.
1. Digitization vs. Digital transformation- While the two are interrelated, yet these two are completely different. In simple words, digitization simply means using technology to digitize the existing processes e.g. digitizing employee records using an HRM software, automating the sales processes using mobile apps for real-time reporting, etc. However, digital transformation is a strategic exercise involving radical rethinking of how an organization uses technology, people, and processes to fundamentally change business performance. It means using technologies such as mobile apps, websites, blockchain, SaaS products, etc. to either increase revenue or customer engagement. A key distinction is that digital transformation has to be linked to key business objectives. Any exercise not linked to business objectives cannot sustain over time and will eventually die.
2. Management Support- Digital transformation is indeed difficult. It calls for radical new thinking and approaches to the way business is carried out. The employees can feel the discomfort as they move out of their comfort zones and adapt to new ways. A successful digital transformation has to be sponsored by the leadership and needs management support right from the top. Just they way CIO was responsible for driving modernization and migration from legacy systems to cloud, it is not a bad idea to have a special position Chief Digital Officer (CDO) to drive cross-functional collaboration. The CDO should report to the CEO and be responsible for all digital initiatives. If not, the CEO has to drive the change and it has to be monitored at the board level. While most transformation exercises start with huge enthusiasm, the excitement usually dies down over a period of time, and hence, the transformation becomes just another failed experiment.
3. Technology and Digital Transformation- Technology is a great enabler and is imperative in any transformation exercise that the enterprises may undertake. However, technology cannot solve all business problems. Whenever a new technology surfaces, there is huge excitement amongst the enterprises to embrace new tech trends and follow others without considering the impact of these deployments and how these help them achieve their business objectives. As a result, we have many companies building mobile apps, web portals, deploying AI and blockchain solutions, etc, but without any return on investment. A sound technology partner can help enterprises understand which technology helps them meet their business objectives and address their concerns best.
4. Human-centric design- Any transformation exercise involves people, who form the backbone of any company. Similarly, technology cannot exist on its own. It needs skilled teams to design, implement, and manage it. Digital transformation will struggle to succeed if the people are not ready to embrace these. Companies need to consider the impact of deploying the technology on its people and need to adopt a human-centric design. People are a fundamental pillar of any digital transformation exercise.
Digital transformation is irreversible in the new world, especially in the post COVID environment. Consumers expect a consistent experience across online and offline channels and expect the brands to up their digital game. Enterprises need to continually reinvent themselves to meet ever-changing customer needs and need to plan for the new wave with a renewed enthusiasm and a key focus on business needs.
Innovantes is a global digital transformation organization focussed on providing technology solutions to Fortune 500 enterprises and next-generation startups. Our key areas of strength are developing custom hybrid, cross-platform mobile applications, cloud deployments, and business consulting. Get in touch with us to explore how we can help your business outperform the competition and emerge as an agile digital enterprise.