Understanding digital transformation

Digital transformation is more than cloud, big data, mobile and social. These technologies are simply the triggers and tools for change.

The necessity for businesses to become more digital is not new. As far back as 1996 Steve Jobs said:

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“A small company can look as large as a big company and be as accessible as a big company on the Web. Big companies spend hundreds of millions of dollars building their distribution channels. And the Web is going to completely neutralize that advantage.”

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What has changed is that incrementally, new and improved technologies have made it easier and cheaper for startups to enter businesses and for customers to connect with businesses digitally.

These technologies are disruptors to traditional ways of doing business.  A tipping point has occurred: the technologies and ways of interacting with customers are now so different that all businesses, traditional or otherwise, are under threat if they don’t evolve. Digital transformation is about adapting and organising your business: firstly to use digital and secondly, and critically, to achieve the required cadence of innovation to stay ahead.

The digital transformation opportunity

High profile brands like Uber and Airbnb have disrupted traditional businesses and rewritten the rules in their respective sectors. There is widespread awareness of the potential impact of digital transformation.

This presents a unique opportunity to get buy-in for organisational change. Executives understand the threat of disruption, and want to address it. What better time, then, to take a holistic look at what your organisation does and how you do it, and evaluate how you can use digital technology to drive change, improve efficiency, add value and innovate to remain competitive.

As a thought exercise, consider how your business model might be disrupted by a competitor. How will they use digital technology to package, promote and price products better and deliver greater customer value? Now imagine everything you are currently doing could be done in that different way, and next year it might be different again. This is the opportunity for you to be the disruptor.

Ready for digital?

When change is the norm, being responsive to that change comes down to organisational culture and leadership. Here are four characteristics of an organisation that’s ready to make the most of digital transformation opportunities:

• Willingness to try new things and recognition – from board level down - that the risk of doing nothing is often greater than the risk of innovating
• Ability to work and innovate at pace – this may require a re-evaluation of everything from business strategy/planning to your software development lifecycle. Where are the bottlenecks? Often it’s not technology that slows you down, but process.
• Prepared with the right structures and skills to deliver – e.g. cross functional teams and awareness of digital across the business.
• Data savvy - where data has a central role within the organisation.

Six tips for successful digital transformation

Empower your people

Don’t get too hung up on technology, or think that just technology will be the answer. People, not technology, are the most important part of your digital journey. Support your staff as they innovate with a flexible and agile organisational culture that’s open to change. Facilitate different ways of working. If you want innovative staff you need to adopt innovative ways of working to attract those staff. Break down existing silos and encourage cross-functional teams.

Integrate to innovate

If you have a large legacy system, the thought of replacing it can be daunting. Instead of replacing this system, digital allows you to rethink how you expose different parts of it and how customers interact with it. You can add interfaces to improve the user and customer experience, without wholesale, costly and time-consuming system change.

Consider how you interact with your customers

Start digital transformation with the customer experience. It’s the most visible part of your business. And we are all digital citizens now, with high expectations for our online interactions. By transforming the way you provide customer service using new digital tools – including bots, apps, social media, streamlined purchasing and more – you can exceed customer expectations, deliver high perceived value and save money at the same time.

Look to the cloud

Consider how cloud technologies can help you meet your goals. Cloud is an enabling technology that can help you reduce time to market, minimise fixed costs, start small and scale seamlessly, and experiment with new services.

Be data-centric

The best decisions are data driven. In a time of rapid change and increasing competition, it’s ever more important to make good decisions. So make sure your systems are capturing the data you need to support that. And to help you make sense of your data, don’t be afraid to explore new methods like machine learning and advanced analytics to help with more rapid and meaningful insights.

Innovate faster and smarter with DevOps

Because speed is everything: automate time consuming tasks. DevOps encompasses the practices, tools and policies for improved quality and automated digital delivery – embrace it!

In a world where everything your organisation does could potentially be done differently, embracing digital innovation is essential.