Drive the change of your Digital transformation

Digital transformation is an essential challenge for all companies, but it is played out in very different environments and through extremely varied problems for companies. Indeed, digital technology is invading society and the economy at an accelerated pace. Technologies and numerical channels are multiplying and their uses are increasing with end customers as well as companies. This brings about changes in operational models, economic models with sometimes very significant impacts on the entire value chain.

Moreover, digital technology is a source of simplification and automation of processes and interactions, which gives digital the power to reduce costs, which is particularly sought after by companies in a context of economic downturn.

As a result, digital has been invited for a few years in the priorities of the management committees and is today one of the important strategic imperatives in all sectors as well as in all functions. Beyond the trending subject the biggest challenge for executives is to execute these transformations and drive the process of change behind theirs implementations. Executive often receives business guidance reports, advices and recommendations from consulting firm, and they have to speed up the pace of execution. In this article I want to demystify the digital transformation process and go further in its implementation by proposing a framework that reduce the risk of failure during these transformations.

1. Digital Transformation is driven by strategy not technology

When we talk about digital transformation, we speak in reality of a very wide variety of transformations. They may relate to products and services, innovation policies, customer relations and service, operations, valuation of data capital, employees team work, management and culture of talent, and Strategy, most often with an impact that simultaneously covers several of these components. These transformations are complex because they are at the crossroads of technology, competitive strategies, customer expectations and regulation. They have to be done in agile ways combining a short timeframe, with a certain degree of risk given the shrinking technological cycles.

The main hurdle to cross is not to go for a crisis or reactionary scenario by rapidly start by solving discrete business problems with individual digital technologies, or go for big consultancy company and layout a predefined strategies without any implementation. The cost of theses moves can be very high and the change initiative beside can be very painful. The figure below shows the correlation between timing, cost and difficulty of change.

The ability to digitally reimagine the business is determined in large part by a clear and anticipatory digital strategy supported by leaders who foster a culture able to change and invent the new. What separates digital leaders from the rest is a clear digital strategy combined with a culture and leadership poised to drive the transformation

2. Three main areas of Digital transformation

  • Transforming Customer Experience

Customer Understanding — Many enterprises are building analytics capability to understand customers in more detail. They are taking advantage of previous investments in systems to gain an in-depth understanding of specific geographies and market segments. Some are exploring social media to understand the customer behaviour. Companies are learning to promote their brands more effectively through digital media.

Top-Line Growth — Companies are using technology to enhance in-person sales conversations. For example, financial services and Insurance companies are using tablet/mobile-based tools to help sales people and customers engage in analytics-based planning. They are also integrating customer purchasing data to provide more personalised sales and customer service, and also offering customised product packages.

Customer Touch Points — Customer service can be enhanced significantly by digital initiatives. For example, a bank established a Twitter account to answer client complaints quickly, helping customers avoid physically going to a branch. Companies with multiple channels to the customer are experiencing pressure to provide an integrated experience. Multichannel services require envisioning and implementing change across customer experience and internal operational processes. Several companies are offering customer apps to enhance customer touch points and self-service via digital tools.

  • Transforming Operational Processes

Process Digitisation — Modern technologies have transformed traditional workflows and have enabled organisations to become networks of these digital workflows. Companies historically have used automation to make processes more efficient and scalable. Some firms are going beyond simple automation to gain additional benefits. Automation can enable companies to refocus their people on more strategic tasks.

Worker Enablement — Individual-level work has, in essence, been virtualised — separating the work process from the location of the work. The tools that virtualise individual work, while implemented for cost reasons, have become powerful enablers for knowledge sharing. Salespeople and frontline employees, for example, are beginning to benefit from collaborative tools in which they can identify experts and get questions answered in real time. They are also increasingly gaining access to a single, global view of the company’s interactions with a customer.

Performance Management — Transactional systems give executives deeper insights into products, regions and customers, allowing decisions to be made on real data and not on assumptions. This is happening in both internal processes and customer-facing processes. The level of detail is also increasing, allowing managers to compare status across sites or reallocate product manufacturing capacity in ways they could not do before. Beyond being better informed, digital transformation is actually changing the process of strategic decision-making by taking inputs from wider employees.

  • Transforming Business Models

Companies are not only changing how their functions work, but also redefining how functions interact and even evolving the boundaries and activities of the firm.

Digitally Modified Businesses — The companies are finding ways to augment physical with digital offerings and to use digital to share content across organisational silos. Few companies are staying true to their traditional business but using digital to transform a new growth business. Other businesses are building digital or service wrappers around traditional products.

New Digital Businesses — Companies are also introducing digital products that complement traditional products. Other companies are changing business models by reshaping their boundaries through digital.

Digital Globalisation — Companies are increasingly transforming from multinational to truly global operations. Digital technology coupled with integrated information is allowing businesses to gain global synergies while remaining locally responsive. These companies benefit from global shared services for finance, HR and even core capabilities like manufacturing and design. Global shared services promote efficiency and reduce risk. They even promote global flexibility.

3. Technology in the service of your digital transformation

One of the key factors in the success of digital transformation is the relationship between business and technology. MIT Sloan Management Review and Deloitte’s1 2015 global study of digital business found that maturing digital businesses are focused on integrating digital technologies, such as social, mobile, analytics and cloud, in the service of transforming how their businesses work. Theses technologies have to use the existing legacy software and data. An assessment of the existing services and data is a mandatory step on this process. In this part of the article, as much as I would like to go to the bottom of the technological part (I came from a technical background), I prefer to keep the article less technical, I will just enumerate the existing technologies and certain trends that can help in the process of implementation Of digital transformation. There is a lot of documentation on the net that can help to detail these technologies.

4- A Change framework for digital transformation

1- Define the appropriate digital transformation for your business

  • Assess the existing: Start by assessing the business added values , the organisation, the skills and
  • Define a strategy and goals
  • Define business Objectives and KPIs
  • Communicate the vision

2- Establish digital culture and leadership

In order to change organisations, you have to start by changing individuals. Culture and leadership leads to an easy adoption of new technologies. It is important to put in charge a digital leader capable to spread the digital culture and lead the technology adoption.

3- Implement and execute the change in a lean and agile way

For every transformation execute the following iteration as a change initiative:

  • Articulate the required digital transformation process
  • Paint and align the picture of the vision
  • Build the leading team
  • Layout the path and bridges
  • Provide the tools and resources
  • Make the move
  • Reinforce early attempts and success: If people get tired of poor results from early change efforts, then you must ensure that there are champions at critical points.
  • Chart and communicate progress: Charting your transformation helps people not feel lost, you need to chart progress individually and collectively. Plan for, capture, and celebrate early wins Share the good, bad, and ugly. People must know how they and the company are doing what progress is being made? Keep messages simple, repeat them often and use multiple channels.
  • Align and celebrate
  • Articulate the next required digital transformation

5- Digital transformation is a change initiative

In order to drive the digital transformation in a business to a successful change, you have to start by laying out a strategy, build the culture, choose and promote a leadership, define the business goals, and drive a change initiative with a lean and agile methodology. Technology is a main part of the process but the change management is the key.

References:

1. Becoming a digitally mature enterprise (By Gerald C. Kane, Doug Palmer, Anh Nguyen Phillips, David Kiron and Natasha Buckley, 2015 MIT Sloan Management Review)

2. Leading Successful Change (lecture by Vibha Gaba,2016 INSEAD)

3. Nine Elements of Digital Transformation (George Westerman, Didier Bonnet & Andrew McAfee, 2015MIT Sloan Management Review)

CEO/CTO @MyAppConverter ltd