The Why, What and How of Digital Transformation
No industry is immune to the transformational impact of digital technologies, but only people with sound strategies and a digital roadmap to harness the opportunities will be among tomorrow’s leaders.
There is a stark difference between people thinking they have a digital enterprise and digital enterprise thinking. Possessing digital technology is only a fraction of being a digital enterprise, and thinking otherwise is akin to avoiding the challenge of becoming a true digital enterprise that generates new value and revenue from digital resources, which involves going beyond simply digitalising current ways of working.
The Trouble with Digital Technology
Digital devices and apps lull leaders into a false sense of security by feeling they are riding the digital wave and keeping up with progress. Too many leaders feel they are digital when they touch their tablet or smartphone for some company data. Perhaps a little like people who feel they are well-traveled because they watch a lot of TV travel shows.
The Digital Wild West
The random subscription to cloud services is all it takes for people to find themselves venturing off into the perilous land of the Digital Wild West. A place where digital cowboys sell their wares to the unsuspecting staff who have the best of intentions to help their departments benefit from the latest digital offerings.
The Digital Wild West is no place for technology leaders to want their business partners to venture into. The Digital Wild West is where security and other business-risk breeds and it is akin to a can of worms waiting for its day. Without digital strategy and governance, many organisations will find themselves in this unsavoury territory, and until the can of worms explodes in front of them, most leaders won’t even know that their people have been taking the firm there. But if the CIO is not seen to be strategically driving digital transformation and proudly communicating their digital roadmap, people will feel they have no alternative but to brave the Digital Wild West alone.
Digitally Enabled Business Transformation
Successful business transformation is not simply derived from the implementation of new technologies; but from taking advantage of the possibilities that digital technologies provide to increase competitive advantage. Digital technology creates opportunities and challenges for every organisation and leaders need to prevent themselves from being blinded by the promises of the bright lights of digital delights, and think strategically when contemplating the future of their digitally enabled organisations.
Digital transformation done right requires answers to fundamental questions about customers, capabilities, workforces, operations, economics and business models, etc. It is therefore prudent to create a Digital Transformation Strategy, which gives rise to a Digital Transformation Roadmap and Digital Business Cases. From there the Digital Transformation Projects and Programmes can be launched, implemented and their business value realised.
What is Your “Why” of Digital Transformation (Strategy)?
A digital transformation strategy is the guiding north star that helps leaders chart a course after making some tough transformation choices. This north star steers the huge number of decisions to be made around the opportunities and challenges if successful digitally enabled business transformation is to be achieved.
What is Your “What” of Digital Transformation (Roadmap)?
A digital transformation roadmap is the overview of the digital use cases that will contribute towards the realisation of the digital transformation strategy over the next three to five years. Prioritised Digital Use Cases are key to the roadmap and they facilitate a best-practice business-orientated approach to the digital transformation roadmap, as opposed to a technically orientated “cart before the horse” approach.
What is Your “How” of Digital Transformation (Business Case)?
A digital transformation business case explains the value of the planned investment along with evidence that the value can realistically be achieved. It needs to articulate how you intend to successfully orchestrate the transformation while placing the planned benefits and return on investment at minimal risk.
How Mature Are Your Capabilities?
While many people urge executives to get started with their digital transformation journey and list the latest and greatest technologies, few accompany their digital evangelism with a framework or methodology of how to undertake the transformation in a holistic, integrated and business-orientated manner.
If digitally enabled business transformation is part of a CEO’s strategic objectives, they need to accompany these objectives with a commitment to providing their people with the support and investment required to secure and mature the right capabilities.
CEOs should not announce to their people that they will embark on a journey across the Atlantic Ocean and do it in the same 20ft sailing boat that they use on business-as-usual team-building weekends.
Transformation leaders need to understand how to use the new breed of strategic management tools and methodologies such as the DCF and BTM². These are what will ensure that business, innovation, people, process, technology, risk and other fundamental elements of successful transformation are adequately managed throughout the process.
Just the Beginning
To some people, randomly signing up to apps, social media and cloud services might seem cute, sexy, fun and innovative; but true digital enterprise transformation is when a digital transformation strategy is focused upon creating viable digital use cases that give rise to business cases that will build value, create competitive advantage, and help secure the viability of the company over the next five to ten years.
Digital Capability Framework – CXO Weekly – Rob Llewellyn