Digital Transformation Does Not Start With Technology
Partners in Performance is a Business Reporter client.
A staggering percentage of digital transformations provide meager returns for their organizations. Where does the blame lie and what can be done to ensure the best chances of success?
Perhaps you are reading this and thinking, “I know exactly how to embed digital across my business,” or you have just embarked on a transformation and are extremely confident of success.
Sadly, the cold reality is that most organizations fail to effectively realize the benefits of digital transformation. To flip the odds, organizations must understand that no technology offers a one-size-fits-all solution—a crucial reality often overlooked in favor of speed or assumed convenience. Simply automating a bad process does not fix its underlying issues.
The first step is to understand where value can be generated; this will help identify the right technologies for the organization to deliver and sustain excellent outcomes, whether that is increased production, improved revenues or growth in new markets.
Our firm defines digital value transformation as the process of leveraging the right digital technologies to achieve high performance that delivers and sustains excellent outcomes (revenue, growth or operational results).
Finding the value
Perceptions of value vary greatly, and there is an industry-wide misconception around why organizations need technology.
Not every business will require the same solution, and none should leap into action until it has fully defined its needs. This is easier said than done for organizations bombarded by vendor promises of the “perfect solution” and media pronouncements of new advancements that will cure all ills.
To make your organization a success story, do less and do it really well. Simplify technology by first clearly defining the tangible benefits to the organization. Begin by focusing on understanding the root causes of operational inefficiencies and key cost drivers, and how to better serve consumers to generate higher margins and capture greater market share. Only then can you determine the right technology that is fit for purpose to optimize across cost levers while improving processes and customer experience. To get a clearer picture, engage the front line—those who are doing the doing, every day—to understand their pain points and end-user needs.
This critical first step is key to thoroughly evaluating how, and if, vendor promises will deliver results that satisfy both organizational and customer needs.
Further, it lays the foundation toward building the organizational alignment needed to drive change; understanding needs and selecting value-focused technology is only the first phase of the transformation journey. The next phase, integrating new solutions effectively into established operations, is often the greatest challenge.
Talent and culture, not technology
If an organization would rather take the path of least resistance, it may feel that the latest technology is a silver bullet that can somehow implement a digital process without the initial pangs of change; it cannot. Undertaking a digital transformation is about talent and culture, not just technology.
All too often, technology is implemented before procedures and processes are fully aligned to realize maximum value—if they are altered at all. For example, a sophisticated AI-enabled reporting tool is implemented, but the information output follows the legacy process of exporting to a spreadsheet and manually emailing to a manager; or an advanced customer management tool with chatbots is rolled out, but the information gleaned from interactions with customers is not fed back to operational teams to drive improvements.
Successfully embedding new technology requires processes to be adapted and behaviors changed. Typically, this requires new procedures and adjusted targets, as well as intensive team training to ensure that teams can adopt and sustain the new technology to its full extent.
In our experience, the most successful digital transformations have begun with thorough introspection to gain understanding. To the outside world, an organization’s success may look easy. In reality, its “seamless” transformation required a layered and comprehensive approach, ensuring the right steps were taken, at the right time, toward the right application of technology.
Today, industries that best weather disruption in terms of short-term liquidity, and that maintain a largely positive outlook on future profitability, are the ones that have the greatest means to successfully digitalize their organizations.
While prospects for success can seem daunting, organizations that successfully transform and then continuously improve are built on technology solutions that generate value, are fit for purpose and are powered by forward-thinking leadership and an inspired front line.
Partners in Performance is currently enhancing its research on the importance of digital transformations to organizations. To receive industry-wide results, including emerging challenges, insights and best practices, take part in our Digital Value Transformation Survey.
— Ali-Reza Moschtaghi and Juan Ferrara, Partners in Performance
This article originally appeared in Business Reporter. Header Image credit: Shutterstock id1633125442
