The Future of Digital Transformation
Digital transformation should be at the forefront of every organization’s mind, and is defined as “the adoption of digital technology to transform services or businesses, through replacing non-digital or manual processes with digital processes or replacing older digital technology with newer digital technology”. However, this easily digested definition is not so simply implemented in the workplace. There are challenges to be overcome before the benefits of digital transformation can be realized by an organization.
Accenture, Deloitte, and McKinsey collectively have over half a million employees and have been at the forefront of digital transformation from both research and execution perspectives. They also have collectively harnessed the power of digital transformation to stay at the forefront of their industries.
Below are three summaries of their experiences in digital transformation related to people, processes, and technologies.
Accenture makes it clear that successful digital transformation is based strongly on strategy and having methods set on how you will transition the business.
Furthermore, it’s vital those important leaders in the organization support and understand the processes of digitally transforming their organization. It’s most certainly not something that happens overnight and takes a large sum of investment.
Accenture conducted a discussion group with organization leaders who have digitally transformed their organizations and these were the key themes that constantly came up during the discussion.
- Digitization improves efficiency – If digital transformation leads to improving your service delivery through new technological processes, it’s a no-brainer. You can save time and resources that benefit your own organization and please your customer with a quicker more efficient service.
- There is a skills shortage – Younger members of an organization may be more tech-savvy and understand technology better. However, the older more senior members of an organization have better business acumen. With this in mind, Martin Hess, Vice President of Enterprise Services Sales for UK&I at IT concern Hewlett-Packard states ‘the hierarchy of digital knowledge in organizations is upside down
- Only a few can moonwalk – This refers to the fact that not every company can approach innovation in the same way. Aiming for the moon will only get an organization so far when the daily focus is on targets and performance. One small step towards digital transformation is unfortunately unlikely to provide one giant leap to digitizing the whole organization…but a series of steps can get you there.
Deloitte sets out 4 key pillars that drive businesses to successful digital transformation and the benefits that come with it.
- Define ambition for the future – Aligning the digital strategy to corporate strategy and align talent, people, and change strategy via digital enablement
- Develop digital leaders – Create a plan to develop digital leadership capabilities and assess leadership’s readiness for change
- Rewire the organization – Develop a new organization design to embrace the digital culture and assess new capability needs to develop a digital talent strategy
- Engage and enable people – Transition the workforce to the new digital organization, align performance metrics, and plan to sustain
The benefits an organization can expect once transformed are as follows.
- Accelerated adoption
- Avoidance of costs
- Gaining a competitive edge
- Mitigation of risks
McKinsey’s article presents 21 factors that improve the chances of success of a digital transformation initiative, broken down into 5 categories, according to a McKinsey Global Survey on digital transformations.
- Having the right, digital-savvy leaders in place – Leaders of individual initiatives and leaders of the program-management or transformation office who are dedicated full-time to the change effort.
- Building capabilities for the workforce of the future – Redefining individuals’ roles and responsibilities so they align with a transformation’s goals, which can help clarify the roles and capabilities the organization needs.
- Empowering people to work in new ways – Reinforcing new behaviors and ways of working through formal mechanisms, long proved as an action that supports organizational change.
- Giving day-to-day tools a digital upgrade – Adopting digital tools to make information more accessible across the organization, which more than doubles the likelihood of a successful transformation.
- Communicating frequently via traditional and digital methods – Clear communication is critical during a digital transformation. More specifically, one key to success is communicating a change story, which helps employees understand where the organization is headed, why it is changing, and why the changes are important.
This all seems daunting, the good news is most organizations are already digitally transforming because the environments around them are already in motion. For example, the way products and services are delivered through the cloud virtually. The silver lining of working remotely is that it has driven many of these transformations.
Quote-to-cash and price-to-quote are not isolated silos in digital transformation, they are deeply integrated with other processes to achieve optimal outcomes, e.g. process improvements. All of our customers have moved from manual, non-digital systems processes such as time-consuming spreadsheets and manual data entry to digitally enhanced environments as part of their journey for optimization.