This article provides perspective on why Digital Transformation is an imminent need and sets context around ways to achieve it and why culture plays a central role in successful transformation. It also addresses some common mistakes while embracing such transformation initiatives.
Digital Transformation (Dx) is perhaps the most spoken, talked about, and ubiquitous buzzword of the current age. In this Digital World, Dx is vital to significantly transforming businesses and providing a holistic view of its operations. Digitalization is more important than ever; we have seen organizations genuinely keen to double down and accelerate Dx specifically in today’s global context. Thus, Dx is now seen as a necessity by any organization looking to stay nimble, agile, and relevant.
When we speak about Dx, it is important to understand the nuances that make it successful. According to a study, in 2019, big organizations poured spent $1.3 trillion as part of their transformation initiatives. Out of which, 70% ($900 billion) got wasted due to failed programs. From this, it is evident that the success rate is a mere 30% in an area where budget is not a challenge. Leaders, CXOs, sponsors, and investors across organizations in various echelons of the business world are sold on the need for Dx and are more than willing to spend a fortune to achieve it. However, the hard truth is most Dx doesn’t see the light of day, meet expectations, or yield desired results. We will deep dive into the reasons and prescribe measures to avoid making these expensive mistakes.
Let’s start with my favorite W’s - What, Why, Who, Where, and When. This should be taken into account while formulating a strategy for successful Dx.
WHAT?
Digital Transformation is the assimilation of Digital Technology, Information, and Process into all sections of a business and a company’s overall strategy to achieve goals. It results in structural changes to the way business functions and delivers immense benefits to the customers. We can understand Dx as a convoluted, multidimensional process that symbolizes an enormous cultural swing in the work environment and change that affects every facet of an organization. It is imperative to understand that ‘Digital is Business today and Dx is a continuous reset’. In short, a successful Dx serves as a composer that enables the contrasting digital channels to perform collectively as an assemblage.
89% of all companies have already adopted a digital-first business strategy or plan to do so.
WHY?
Companies are using Dx to re-imagine their businesses to be more efficient, profitable, customer-centric, and data-driven. This helps create processes fueled by technology to transform output and enable actionable insights. Dx brings efficiency and synergy so that process and system in conjunction drive business sense, decisions, and value to customers. According to Forbes, 56% of CEOs reported a direct increase in annual revenue after their company’s successful digital transformation.
WHERE?
Dx is not only an IT department initiative but an organization-wide transformation spanning departments, divisions, and processes. Further, it applies to any industry regardless of domain. Hence, organizations should identify and involve key stakeholders in all business areas that need transformation and identify the right mix of representation from directly and indirectly impacted business entities while devising the strategy. The goal should be to attempt and discover synergies among various units.
WHO?
Dx is a strategic paradigm shift in the way a company works, hence, all stakeholders must embrace this change fully. While it is the Leadership's responsibility to unite stakeholders towards the common goal of Dx, it is everyone’s obligation to maintain a consistent focus on the target and work towards achieving the same. Leaders nominate the executives responsible for driving the effort and empower them to make quick decisions. Strong, decisive leadership is desired for successful Dx– they imbue the object of change with meaning.
WHEN?
Yesterday! Many companies have shown a sense of urgency and are getting on the ‘Digital Transformation is No Longer an Option’ bus. However, some organizations are still driven by FOMO (Fear of Missing Out), which is not the right way to tackle this. It does not help the cause and often leads organizations to catch the wrong bus that takes them to an entirely wrong destination. While it’s good to undertake such transformation quickly, it is equally important to gauge the existing maturity level, formulate the purpose, understand the context, evaluate what needs to be done, prioritize, and start with the right intent. This is because for TRUE Dx, stakes are extremely high, and it is an extremely expensive affair in terms of Time, Effort, and Cost. The World Economic Forum suggests that digital transformation’s value for societies and industries has the potential to reach $100 trillion by 2025. Just imagine the scale when, as per World Bank, the global economy was an estimated $87.8 trillion in 2019.
HOW?
Dx is altering the way a company works. All related workflows, systems, and processes are scrutinized. This very change influences every stage of the company and enables a much mature, efficient, and cohesive use of discrete data. To embrace this change, reap the benefits of Digitalization, and lead Dx to success, one must change culture. If you are wondering why I mentioned culture and not technology, you are not alone! Let’s find out why organizational culture plays an important role in successful Dx.
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