It has become a challenge, even as individuals, to keep up with innovation. But for many organisations, the task is Sisyphean; while they struggle to get their technology to the top of the hill, new summits materialise in the distance. In 2020, digital readiness flitted from a competitive advantage to a survival imperative.
Entire business models are becoming obsolete. Only 11% of executives surveyed believe their current business models will be economically viable through 2023, while 64% expect that their companies need to build new digital businesses.
For many, digital transformation must be achieved if businesses are to prosper. It can mean different things to different people. Digital transformation might mean going from brick-and-mortar to online seller overnight, the deployment of a select new technology, or it could involve a radical transformation of the entire business organisation and structure.
Gartner defines it as the process of exploiting digital technologies and supporting capabilities to create a robust new digital business model.
A disruptive framework
Regardless of how you define it, digital transformation is “no silver bullet”, explains Altaz Valani, research director of cybersecurity solutions provider Security Compass. At its core, the framework is highly disruptive and should not be entered into lightly.
“The goal is to harness this disruption that’s taking place externally, bring it internally to the organisation,” Valani says. By developing new capabilities, companies can either improve the services they already offer, or produce entirely new sets of services — “Therein lies the value of digital transformation.”
It is disruptive, however, because companies and people have legacy technologies and legacy ways of thinking. “[And] we have a legacy-engrained culture that we need to overcome,” Valani explains.
Beyond the challenge of convincing employees to march towards a common vision, companies only have limited resources and funds. Jumping on a digital transformation initiative without the appropriate strategies in place can lead to pain down the line.
Many organisations know this all too well. Indeed, by some estimates, 70% of digital transformations can only be considered failures. Either they do not achieve their intended goals, they take far too long to realise them, or they go cripplingly over budget.
While new technologies can unlock incredible value, it can be the neglect of a company’s people that drags plans off track.
This can be a consequence of teams not receiving the right resources, Valani says. It can also be an issue stemming from the programme level, with decision makers lacking the information they need to make informed decisions — for example, about funding allocations.
Additionally, at the strategic level digital transformation has a lot of competition. Other initiatives such as cybersecurity, resiliency, compliance, and risk management can put strain on priority setting.
That is why an essential ingredient for delivering on digital transformation agendas is having at least one person in the organisation who is spearheading plans and pushing ideas in the C-suite.
“You will need at least an executive champion. And the executive champion will help you to unblock things at the organisational level,” Valani explains.
If there is an executive leading an initiative it lends credibility and importance, he says. Without one, digital transformation can become just one more programme lacking clarity about value delivery.
Executives must also consider three main axes of the digital transformation, Valani explains:
The first is operating models. Companies need to clearly define what they mean by value delivery. What is that definition of value?
Then the second is capabilities, driven by value streams, and ultimately leading to value delivery in the operating model.
And the third resides, at the project level, in delivery pipelines. How can new technologies and ways of doing things improve delivery processes?
It is important to understand, however, that digital transformation is not an end state, Valani explains. It is a journey, and any misconceptions about that can lead to headaches.
Traditionally, when digital delivery models and digital transformation began, the focus was largely on cost and speed, Valani says — “Now we’re starting to see that we have to inject in security, privacy, ethics: all of these things must be directed into our pipelines.”
Even the concept of digital transformation is evolving. Now, it is no longer enough to ask others, either internally or externally, to simply trust us, Valani says. Companies need to guarantee that their products are meeting compliance requirements, even while keeping up with the breakneck speed of change.