Digital Transformation is an interesting concept — not because the idea is something novel, but because when a company asks itself, as it should, ‘What's the point?', the answers will vary wildly. Transformation will only be successful if companies first understand why they're doing it and what they hope to change in the world around them.
For nearly a decade now, companies have been trying to become more digital. But why? And for what? A herd mentality has resulted in many ‘failed' transformation efforts. So much so that just the word ‘transformation' has lost its meaning because very little change comes from these projects. It's how genuine promise turns into hype — that AI will revolutionize employment, or the cloud will revolutionize customer experiences.
Those things are possible, of course, but they don't happen easily. They require a company with a clear vision that can put technology to work in achieving its goals.
So, what is the point? Transformation should make something better — in real life. Whether that's for a customer, an employee, or a partner on the other side of the world, there should be a beneficiary. During 2020, 43% of IT leaders felt that customers benefited most from investments made in digital transformation, while 30% thought employees did. However, the real-life impacts are still the exceptions and not the norm.
A number of studies have documented digital transformation underperformance, or outright failure. Why is that? A 2019 HBR piece via Accenture offered clues: of almost 1,400 companies surveyed, "most reported poor returns on their digital investments." The primary culprit — "Unsuccessful efforts to scale digital innovations beyond early pilot work."
Clearly, we need to learn from projects on the ground. The healthcare industry is emerging as a source of innovation; embracing digital to change the world for the better. One of its biggest challenges at the moment is the production and distribution of COVID vaccine and technology makes every step of that process work efficiently. But it's not necessary for every instance of transformation to impact the world as dramatically as curing a pandemic. It could be about making something better that is small but tangible. For example, helping sports fans find their seats and order snacks from their mobiles, which the Miami Heat basketball team has done.
The ‘outside world' should remain the focus. If processes become more efficient, or costs are managed more effectively, the benefit is often felt by the company implementing them. It helps the bottom line and pleases investors. But if ‘transformation' can't make a meaningful change to real people in everyday real life, then what is it transforming?
How to make it work
Let's examine three key aspects of transformation projects that can help make their impact felt more quickly.
1. Avoid tech lag
New technologies carry a lot of hype but there is often a delay before they generate positive outcomes. We call this tech lag — the time it takes between purchasing a new technology and the point at which it's fully operational, at scale, across the business.
There are two reasons for this — the first is that enabling technologies like cloud or data integration are often not already in place or mature enough. For instance many forms of AI require a large data set, so if data is inaccessible it cannot function effectively. The second is that organizations have struggled to find the right balance between technology and industry focus. They spend too much time trying to build the technology themselves and not enough time applying it to benefit their customers.
Events like the Snowflake IPO show that there's value in taking away the burden of platform building, management or optimization. Snowflake removes the complex task of establishing data platforms in the cloud from individual companies. They can easily migrate their data to the cloud and keep their focus on outcomes for customers, partners or employees. This important building block means that new ideas (or new technology) can become a reality more quickly. This links to our next point.
2. Focus on doing, not managing
The more that automation can be brought into infrastructure management, for example through integration, process discovery or data management, the more than experts can focus on the really valuable stuff, like developing new services or customer propositions. In the past banks, retailers, energy companies etc have attempted to build their own platforms and commit a lot of resource to managing them. This is a distraction from their mission as a bank, a retailer or an energy company.
But far from shying away from technology, the role of the developer has never been more important. Technology becomes a differentiating factor for businesses when developers are given the opportunity to build something specific to their organization. Use proven platforms and tools to do the heavy lifting behind the scenes.
Digitally savvy leaders will create an environment where these experts can help build the business. Which brings us to our final point.
3. Get people involved early
It's been said many times, but technology is redundant if people don't use it. This is often a symptom of technology being developed in isolation and not matching the essential needs of people in the business. But where new tools help people do their jobs more easily, they will use them.
In addition, removing some of the complexity around everyday tools will help make people more comfortable with their new digital environment. Low- and no-code tools can help more people throughout the business engage with new systems that you want to be core to the business. Whether that's data dashboards or app management, many of these things can be set up on a mobile app in minutes.
In conclusion — digital transformation is never done
Technology projects over the past decade may have been characterized by delays or seeming procrastination. Now that businesses have gone through a period of rapid change — and still face a period of uncertainty — hopefully there are compelling factors for a new approach. One where the complexity is removed from the process and companies stay focused on building their own agility and resilience.