Across countries and industries everybody is either doing it or talking about it. Undoubtedly, digital transformation is the new hot trend in the markets today.
Being agile to evolving market needs and equip yourself to grab new opportunities is the key to success for any enterprise today.
Many industry experts have stated different reasons as to why most businesses fail in digital transformation. However, a recent article in Forbes investigates the question of who actually owns digital transformation; the survey results are displayed in the graph.
Digital platforms (social, mobile, big data, cloud) and virtual networks (customers, employees and suppliers) are replacing traditional product/service companies across different industry verticals. Companies transforming digitally are extremely flexible in disrupting new industries. Today, less than 2% of the global enterprises are network based.
To be successful, CEOs must have a holistic view of the digital threats and opportunities facing key parts of the business, and a solution leading to an overall vision leveraging digital technologies for reshaping the competitive landscape. Digital platforms must be unified across the entire organization, spanning every division, product, service and supplier. Doing this takes real leadership and board support.
By 2020, every company will be either digital predator or a digital prey, believes Nigel Fenwick from Forrester. However, the first step to success is to align the CEO and the Board in reallocating capital; the CEOs have to lead from front. Failing to do so will result in slow growth, diminished profits and reduced long-term valuations.
- Process fragmentation: Complex digital transformation projects demand changes to different business functions within the enterprise. For successful transformation, focus on changing one aspect at a time, without forcing a companywide change in one go.
- Lack of Vision: Projects driven by an unclear vision stalls unexpectedly. Instead, your digital transformation initiative must have a clear vision that is supported by company goals and milestones.
- Asking wrong questions: Many enterprises follow the rule ‘beg, borrow, or steal’ solutions from the existing enterprises and platforms. It is important to know how the existing business model works and what should be done to improve it.
- Redundant technologies: If you change the ways of doing business but continue using the old tools and technologies, you are bound to fail. Similarly, you cannot shift your existing employees to new positions without proper skills assessment. It will lead to lack of buy-ins to the transformation project and ultimately the project will fail.
- Lack of skilled professionals: To accomplish successful transformation, you require a team of skilled experts at key positions. If the existing staff cannot fill the gaps, your project will fail. Training, coaching, and education can help your employees upgrade their skills.
Learn from Other’s Mistakes
The downfall of Kodak remains a great example of lost opportunities. The American brand had talent, money, and foresight to make the change. Unfortunately, it became prey to the aftershocks of a disruptive change. Learn the right lessons, and you can avoid its fate.
Despite the number of failures in digital transformation, companies are increasingly shifting towards going digital. There is not much consensus of why these digital projects fail.
So, if you are thinking about a digital transformation, answer these three important questions:
- What business are we in today? The answer is not technologies that you are using currently or services you offer, or product diversity. Instead, you should identify the customer problems you are solving right now.
- What new opportunities are on offer by digital disruption? Previously, disruption was perceived as a threat; but actually, it is an excellent growth opportunity. Digital disruption leads to market expansion, markets and also transforms your business model. Enterprises perceiving it as a threat will be rigid in response, whereas those who see it as an opportunity will gain competitive edge.
- What capabilities do you need to realize the new opportunities? New entrants may have capabilities such as emerging technologies, access to new markets, and healthy balance sheets. Approach growth in new markets with appropriate pace.
In addition, you must consider the following lessons, if you wish to succeed in your digital transformation journey.
- To maintain a competitive edge, you must seek continuous improvement and innovation.
- Designing a new website does not mean digital transformation. A fresh look of your website improves user experience but you will achieve digital transformation only if you change the organizational modus operandi and automate processes using digital technologies and tools.
- Traditional approaches like research, strategy, change management and project management are still important for businesses. Digital disruption requires enterprises to embrace iterative and adopt customer-centric approaches to enhance customer value and employee experience.
- Post go-live planning is crucial for successful digital transformation. Answer the following questions:
- Why should people accept/use the new product/service?
- Which BUs will be impacted most?
- How will we measure success?
Just two weeks left for project delivery, and you haven’t thought about the above mentioned questions yet? It will result in knowledge gaps, slow adoption rates, and ultimately in abandonment.
I am sure you would not like your initiative to fail. Why wait, then. Take advice from our experts who will provide able assistance in your digital transformation journey.