Digital Transformation – The Buzzword Simplified – Part 4
 

In my last post, I had detailed the key tips to do it right, pitfalls to avoid, typical Organizantion R&R in the quest for organizations to attempt digital transformation. In this post, I will focus primarily on the outlook, optimization, innovations that can be cornerstone of any digital transformation journey.

IDC estimates that 40% of all technology spending will be applied to “digital transformation,” with enterprises spending nearly $2 trillion by the year 2022. The trouble is, few businesses understand how to maximize their investment while also keeping the business at peak performance. Additionally, companies don’t always explore all the ways that services, processes and digital partnerships can support their digital strategy.

Quite often, executives spend considerable budget on digital programs, only to find they haven’t achieved the desired results. What’s more, digital investments have led to confusion among employees and partners alike, whereby teams are pulled in two very different directions: On the one side are technical and operational requirements, legacy technologies, tight timeframes and cost pressure; on the other are creativity, modernization, innovation and groundbreaking products or services.

Nowhere is the postmortem of troubled digital partnerships more evident than in Agile software development projects. Applied correctly, Agile can be an effective and game-changing collaborative tool to build applications quickly and deliver real business value. However, it’s not uncommon for partners to quickly assemble software that doesn’t fully align with business goals or fails to achieve a desired impact.

Optimizing Investments

We need to address how companies and executives can better understand the full implications of digital pursuits and devise a digital strategy to get the most out of these endeavors.

Before embarking on a digital initiative, it’s important to develop specific and mutually agreed-upon business metrics and goals. Doing so helps align companies and their respective partners. Additionally, three strategies ensure companies maximize their digital efforts, investments and experience:

  • Develop the business skills of your digital team. Digital talent should support more than just doing “digital stuff;” they should also ensure their efforts support company performance. Too often, teams don’t have the insight or training to align technology with business issues and concerns. Spend time with the digital team to ensure they understand how the company works, identify the  success metrics that are most meaningful to the health of the company, and choose the technology approaches to meet those goals.
  • Forge meaningful partnerships. Companies typically approach their digital challenges in one of three ways: build their own technology, buy technology and talent by acquiring a strong digital player, or find a partner that can synergistically help them grow and benefit from the combined strengths of both companies. Enlisting the help of a strategic partner is essential for companies that lack core digital skills to build modern, high-impact products and experiences.

Smart enterprises share risks and rewards with their partners while staying focused on a common vision. While selecting the right partner is often about operational and financial efficiencies, businesses today also expect partners to have “skin in the game” and be willing to share risks as well as reap rewards.

  • Build a culture of collaboration. Encouraging a culture of collaboration introduces new thinking and skill sets that enable both the company and its digital partner to work together to increase quality without compromising delivery. Internal and external teams are held to the same KPIs, measuring velocity, quality, product impact and autonomy, which allows for a seamless transition upon rollout.

One of the tangible outcomes of building a collaborative culture is the ability to put in place better processes and workflows, especially when it comes to testing automation. With our model, new product engineer sprints are implemented with a primary focus on building out an MVP (minimally viable product).  In turn, this allows for the rapid build and evolution of upcoming platform features, and the potential to reduce testing time from months to a handful of weeks – saving millions of dollars.

Innovating While Running the Business

In today’s fast-moving digital marketplace, companies don’t have the luxury of time. Businesses must incorporate new products and technologies swiftly and in parallel with ongoing commercial activities. No company wants to hit the pause button on revenue-generating services or products.

This represents the real opportunity with digital: transform your business for tomorrow without stopping your business from performing today. I’m willing to bet $2 trillion that you like the sound of that.

Please feel free to review my other series of posts 

Authored by Venugopala Krishna Kotipalli

Digital Transformation – The Buzzword Simplified – Part 3
 

In my last post, I had detailed the key approaches to Digital Transformation. In this post, I will focus primarily on useful tips, prominent roles, all the known pitfalls for any digital transformation journey.

The idea is to understand all the learnings from different customers experienced on their digital transformation journeys and ensure that one takes good care in not succumbing to known issues. The posts also lists some best practices that should be embraced for the entire journey, this will make the implementation more efficient and effective and less cumbersome for the people involved.

DIGITAL TRANSFORMATION TIPS

Let us briefly cover the six tips that govern a successful digital transformation journey

The question remains: when should you make preemptive changes? The observation of biological systems teaches us that it is optimal for companies to begin searching well before they exhaust their current sources of profit, and that firms should use a mix of ‘big steps’ to move to uncharted terrain and ‘small steps’ to uncover adjacent options at low cost. Regardless, having a strong bias toward change is critical.

ESSENTIAL DIGITAL TRANSFORMATION ROLES

While emerging tech and revamped processes are crucial, having the right skills on staff is essential to any digital transformation.

Software engineers, cloud computing specialists and product managers remain key roles for companies seeking to roll out new products and services. DevOps leaders galvanize software development by merging development with operations, enabling companies to continuously iterate software to speed delivery.

Data scientists and data architects are also in high demand, as companies seek to glean insights out of vast troves of data, and transformations lean increasingly on machine learning and artificial intelligence.

Plus, IT departments supporting business-wide transformations also require UX designers, digital trainers, writers, conversational brand strategists, forensic analysts, ethics compliance managers and digital and workplace technology managers.

DIGITAL TRANSFORMATION PITFALLS

Digital transformations are lagging or even failing for several reasons, including poor leadership, disconnects between IT and the business, lagging employee engagement and substandard operations.

The primary obstacles include the ability to move fast and to innovate while stripping down legacy processes and technical debt investments that have served us well for a long time. The key culprits of a derailed digital transformation are obsession with big bang change, focus on cost cutting as a business driver, and failure to loop in the business.

Boardrooms and C-suites talk about digital and there is pressure to show something and show results, which creates wrong expectations about how quickly what can be done and when. When the investments don’t pay off, people blame the CIO, who finds himself or herself out of a job.

Moreover, approaching digital transformation as a technology journey independent of the business is a recipe for failure. If a clever CIO comes up with a clever idea to change something with new tech, that’s great. The next step is bringing it to the business and having the business own the process. When they own the process, you drive end-to-end transformation that includes processes, people, policies and tech.  The siloed approach always fails.”

A typical role distribution for digital jobs within a company is depicted below for reference.

Adapting to change is nothing new in our industry. But the unprecedented pace of change and colliding trends like the internet of things, digital partner ecosystems, rapid cloud adoption, and machine learning are creating the perfect storm. A storm that is changing the business landscape. There is no one size fits all approach to digital transformation, each strategy will be unique to each organization. However, a focus of balancing activities across the right business model, right partners, right technology, right mindset provides the compass to guide a successful transformation.

Stay tuned…. Part 4 of this foray, we will look into some of the outlooks, optimizations and innovations that are key to any Digital transformation journey.

Please feel free to review my other series of posts 

Authored by Venugopala Krishna Kotipalli

Digital Transformation – The Buzzword Simplified – Part 2
 

In my last post, I had quickly given a glance to my readers a brief on Digital Transformation – its definitions and elements. In this post, I will look through the Key approaches involved in the digital transformation journeys

Present and future shifts and changes, leading to the necessity of a faster deployment of a digital transformation strategy, can be induced by several causes. This is often at the same time, on the levels of customer behavior and expectations, new economic realities, societal shifts (e.g. aging populations), ecosystem/industry disruption and (the accelerating adoption and innovation regarding) emerging or existing digital technologies. In practice, end-to-end customer experience optimization, operational flexibility and innovation are key drivers and goals of digital transformation, along with the development of new revenue sources and information-powered ecosystems of value, leading to business model transformations and new forms of digital processes. However, before getting there it’s key to solve internal challenges as well, among others on the level of legacy systems and disconnects in processes, whereby internal goals are inevitable for the next steps. The human element is key in it on all levels: in the stages of transformation as such (collaboration, ecosystems, skills, culture, empowerment etc.) and obviously in the goals of digital transformation. Since people don’t want ‘digital’ for everything and do value human and face-to-face interactions there will always be an ‘offline’ element, depending on the context.

Hence A digital transformation strategy aims to create the capabilities of fully leveraging the possibilities and opportunities of new technologies and their impact faster, better and in more innovative way in the future. A digital transformation journey needs a staged approach with a clear roadmap, involving a variety of stakeholders, beyond silos and internal/external limitations. This roadmap takes into account that end goals will continue to move as digital transformation de facto is an ongoing journey, as is change and digital innovation.

The way we successfully strategize will be based on we ask the right questions and collect right/adequate responses. The illustration below depicts this in a detailed fashion.

Many executives feel like they are viewing a good jigsaw puzzle that they have to finish, and they have a bunch of pieces but they don’t know if they have all the pieces, and they don’t know what the finished picture looks like. As mentioned this doesn’t happen overnight and requires a series of incremental steps. And here the goal or ‘the what, why and how’ becomes a mix of intermediate goals and broader objectives within which they gain more significance.

5 Steps in Digital Transformation

Finally, the reason why we would prefer to speak about accelerated business transformation or, if needed, digital business transformation, is that it’s just a matter of time before no one makes a distinction between digital and physical or offline and online. Customers, for instance, don’t think in these terms at all, nor in the terms of channels.

How to lead a digital transformation

To meet shifting customer expectations, many CIOs are aligning with key executives, making sweeping organizational changes, reskilling employees, setting up innovation labs and experimenting with emerging technologies to meet strategic mandates issued by their CEOs and boards.

One of the first things companies should do in embarking on a digital transformation is answer the critical question: What business outcomes do you want to achieve for customers? It definitely starts   with the business outcomes and the new business models you are going after and working backwards from there. Here, a keen understanding of your customer journey map and lifecycle is key. Consider the process of settling an insurance claim, which typically takes 7 to 14 business days and requires a lot of paper shuffling. Thanks to algorithms and mobile applications, consumers and claims officers can resolve claims in minutes.

Approach to Digital Transformation

Digital transformation hits each industry. But it can also affect all activities, divisions, functions and processes of the organization as it can impact the very business model as such.

CapGemini Consulting was one of the first to come up with the concept of digital transformation and a digital transformation framework as you can see below. The company did so in collaboration with the ‘MIT Center for Digital Business‘ during a three-year study which defined an effective digital transformation program as one that looked at the what and the how.

The McKinsey chart below shows just aspects where digital transformation can play:

  • The (digital) customer experience (as said, de facto a key element with many digital transformations being a mix of customer experience optimization and process improvement – and cost savings).
  • Product and service innovation where, for instance, co-creation models can be used.
  • Distribution, marketing and sales: another usual suspect and in practice an area (along with customer service) that is often one of the earliest areas undergoing digital transformations.
  • Digital fulfillment, risk optimization, enhanced corporate control, etc.

Others we can add include:

  • Intelligent information management (with information, data and the processes they feed being key and a focus on activation).
  • Customer service, customer experience management and contact centers, customer relationship management.
  • Work, human resources, new ways of collaborating, workforce engagement and enablement (agile working, social collaboration, enterprise collaboration, unified communications).
  • Learning and education.
  • Procurement, supply chain management (with the digital supply chain) and supplier relationships.

It’s important to remind that in a digital transformation (and, for that matter digital business) context, all these aspects, functions, processes, etc. are interconnected and silos have less (or no) place, not from a technological perspective but most of all also not from a process and people perspective.

Stay tuned…. Part 3 of this foray, we will look into the tips, key roles and pitfalls to any Digital transformation journey. Please feel free to review my earlier series of posts 

Please feel free to review my earlier series of posts 

Authored by Venugopala Krishna Kotipalli

Digital Transformation – The Buzzword Simplified – Part 1
 

In this series of posts, I will take a deep dive into Digital Transformation – the word/feeling/term that has taken the world by a storm. I have this word being referred to at lunches, coffee catch ups, and informal meets round the street corner and not to forget in almost all formal leadership summits. Hence I felt it will be very useful for me to indulge further upon this subject for the sake of all you netizens. In this series of posts, I will look through the evolution of the digital economy and then follow it up with its elements, approaches, areas, Strategies, industries specific implementations and last but not the least its importance beyond technology.

Digital transformation is the thoughtful transformation of business and organizational activities, processes, competencies and models to fully leverage the changes and opportunities of a mix of digital technologies and their accelerating impact across society in a strategic and prioritized way, with present and future shifts in mind. Just to keep it simple, an alternate definition would mention it as something that refers to converting processes, activities and models to meet digital economy requirements until the company is a fully networked digital organization.

Businesses have always been changing and innovating, technologies always came with challenges and opportunities, regulations and ecosystems have always evolved. That’s nothing new. It’s in the degree of interconnectedness and of various accelerations, which require profound enterprise-wide change, that digital (business) transformation is to be seen as more than a buzzword but as a challenge, force and most of all opportunity for organizations that will enable them to achieve the core business competencies they need to succeed in rapidly changing environments. So Why is it needed? Let us see below.

We need to make sure we speak the same language and it’s important to emphasize that digital transformation is not just about:

  • Digital marketing, even if that’s an important part of the business activities and if it’s the context in which digital transformation is often used.
  • Digital customer behavior, although it plays a role and customers are increasingly ‘digital and mobile’.
  • Technological disruptions because the disruptions are always about customers, workers, markets, competitors and stakeholders, even if related to technological evolution and knowing that ’emerging’ technologies indeed can have a ‘disruptive’ effect.
  • The transformation of paper into digital information as originally meant nor the digitization of information (flows) and business processes, which is simply a condition sine quod non.

Components of Digital Transformation: The basic seven elements of digital transformation that are required for you as an organization to lead a digital change is below.

  1. Leadership and Vision: It’s required for you as an organization to inculcate the thought process and clear vision in leadership. This particularly means that the leaders and management must stimulate the right digital culture. They should focus on improving the organizations operations, revenue, customer experience and competitive position. They should have   holistic view of the digital threats and opportunities. They should be able to utilize the collective intelligence to reshape the competitive landscape.
  2. Formulating strategies: The organization should be able to define the outcome or result to help achieve the business goals. It should then work backwards to make a compelling digital transformation strategy. It should optimally harness technologies to deliver the value proposition. It could then utilize the niches like augmented reality, geo-location, and social media integration to extend the overall capabilities of the journey
  3. Information Governance: The organization should have formulated a strong governance plan and apply a strategic approach and then move to cloud applications to expand the reach
  4. Focus on Customer Journey: The organization should be able to identify customer needs with an accurate study of customer behavior and then should diversify customer experiences by utilizing the customer data, advanced analytics, online customer surveys and data mining tools.
  5. Define Technology Road map: The organization should align the strategic priorities towards long term planning before the actual tool investment with a well-defined technology road map. This should be followed up to enhance the existing technology stack with the latest tools to match current and future business needs.. This will help leverage technology to increase RoI, improve product and service portfolio, boost productivity and enhance customer satisfaction
  6. Business Disruptor: Businesses need disruptive elements like digital automation, collaboration tools, and enterprise analytics platforms. These help optimize, evolve or transform the entire value chain. Disruptive elements help organizations by modifying or replacing told methods with more faster and integrated ways of working across all the levels.
  7. Utilizing Technology: Big data allow businesses to have an incredible amount of data to analyze and guide business decisions. AI carries out precise predictive or prescriptive analysis for active strategy development

In overall essence the components help seek your way around the digital transformation to drive the digital way of change for your business.

Let us also quickly take a look at the general challenges that we face in the digital transformation journey so as to keep them in mind when we look at key approaches.

The right approach to digital transformation hence allows companies to adopt new technologies that meet the ever-increasing customer expectations. Additionally, cultural transformation is also critical as part of the digital transformation process. It must align with organizational norms along with their risk-taking capability to define and deliver compelling customer experiences. Based on these experiences, the new business models and operational processes are derived, which, in turn, drive the investments in technologies. 

Stay tuned…. Part 2 of this foray, we will look key approaches to Digital transformation.

Please feel free to review my other series of posts 

Authored by Venugopala Krishna Kotipalli