The One Thing Everyone Keeps Getting Wrong About Digital Transformation - Procurement News

Technology | by Alice Sidhu on 26/08/2019 01:43 | 0 comments |

While digital technologies have made the pathway to digital transformation the opportunity that every organisation is seeking to capitalise on, what many organisations get wrong is the focus on the technology…

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There’s no doubt that we have been in the digital revolution for a while now. It may have been a slow start as we came to terms with the power and capability of our smartphones that precipitated the customer centric, anywhere-anytime shift.

Futurists pre-empted the transformation that was coming by positioning a future of mobility, IoT and artificial intelligence, while tech savvy organisations made some early investments and experimented with analytics and automation, learning very quickly how to capitalise on technologies many of us were still trying to define.

Fast forward 10 years and we surely must have everything worked out and locked down. After all, we have had enough time to observe those who have gone before and experiment ourselves, both as consumers and as leaders in organisations, irrespective of our role or industry. It should be the very definition of a no-brainer.

The Current State

Taking a look at the current state, things seem to be a little different. Yes, there have been tech-savvy organisations like John Deere who have managed to leverage digital capabilities and redefine their business model to open up new revenue streams. And we are all familiar with the digital disruptors coming from digital natives like Google, Amazon, Uber and Tesla.

And we have all heard the catch cry of Disrupt before you are disrupted. Indeed, it has probably been the opening for many a workshop on digital transformation initiatives making their way into the leadership programs of organisations.

Is it a money question then? There’s no doubt that the global financial crises, combined with the impact of increasing customer expectations and global competition have exacerbated financial pressure on organisations.

The internet has proven to be a double edged sword for many; enabling access to markets of consumers that would have previously been impossible, while also giving the very same consumers access to competitors, feedback and reviews of others, and pricing transparency that has not previously been possible. Everyone has had to up their game.

All About the Money?

With spend in digital initiatives estimated in 2018 at $1.3 trillion, it’s a tough position to advocate that the investment and focus has not been there. Digital initiatives are defined as any digital capabilities aimed at improving customer value, new growth and monetization opportunities and driving improved efficiencies.

So the categories are pretty broad, and the digital capabilities equally so. Moving from a spreadsheet to a web based form could be loosely termed digital, as could automating a process flow, experimenting with RPA, or enabling customers to order from a website. In essence, there are a multitude of different options before we even get to chatbots, customer preference insights, predictive asset maintenance and hypotheses generation.

So why do we keep hearing about how hard it is to execute effectively with consistent research telling us that 70 per cent of transformation efforts fail?

While digital technologies have made the pathway to digital transformation, the opportunity that every organisation is seeking to capitalise on, what many organisations (70 per cent of them as noted above) get wrong is the focus on the technology.

As an innovator in the early stages of the digital era, that may have been understandable. Working with the unknown, and by definition and nature, first-of-a-kind initiatives, it was important to understand what the technology could do and its limitations.

But in 2018, why does this still account for such an overwhelming focus of an organisations digital transformation agenda? The best way to deal with that question may be by taking a look at what the organisations that are in the 30 per cent who achieve success actually do.

People and culture matter

Watching my 10 year old nephew master the iPad with a skill and confidence I can only aspire to is an exercise in amazement and humility; amazement at all the functionality he is able to access to expedite what he is doing, and humility knowing that I am not ever going to come close.

Taking the ego aside, it reflects the very important point that the technology being used has degrees of perceived value generation and productivity firstly, only when it is used and secondly, with an increasing value the greater and more extensive the use.

So when we say people matter, what we really mean is digital transformation is a change to the way a company works and for the intended value to be realised organisations must incorporate education, training, and adoption strategies that help employees understand why the transformation is happening, how it will impact them, and how accepting and adapting to the initiative will enhance the way they work and the business performs.

Process Matters

It’s very easy to dismiss the process of any function or model as the thing that happens behind the scenes. It’s not usually the subject of an extensive marketing campaign and the people in many process areas may not even have a line of sight to the end customer. 

There may be an instances where consumers may complain about steps in the process that they may need to navigate to get something resolved. I need to admit at this point to being one of those annoying customers that will challenge how something works if I am caught up in a cycle of bureaucracy with some unfortunate contact centre assistant.

But process matters because so many organisations will deploy a technology solution and not or re-engineer a process to reflect the new way of working that the technology should enable.  As a result teams end up complaining that they are stuck with a new technology which does not work at best, and creates more work at worst.

The criticism then gears towards the technology not the implementation strategy that supported it.

Challenging Fundamentals

Business models matter: How organisations arrange themselves in a digital transformation matters. Traditional models are hierarchy based and decisions are made on positional authority. Team and role structures define who does what, and everyone’s role is clear and supported by a position description. Digital transformation challenges many, if not all of these fundamentals. 

Implementing change on this scale, for at its essence this is what digital transformation is, requires different ways of working and different mindsets. It requires acknowledging that your nephew may have more experience even at 10 years old, then you do, irrespective of a long career as an executive.

It’s about who knows what, not credentials that may be impressive, however not best suited to that particular piece of work. And it involves understanding that teams are dynamic, decisions need to be made differently, and a shared focus on outcomes is how digital value is generated and how digital transformations succeed.