I’ve had a handful of excellent conversations in the past few weeks about digital transformation – what it really means, the distance between recognizing its importance and knowing how to take action, and the biggest barriers that stand in the way of success even once you have a clear idea of your digital objectives. Based on what I’ve heard, it seems that for many organizations it is time for a digital rebirth.
There are a handful of reasons why I believe this, the first of which is that it is undoubtedly a critical aspect of your company’s success or failure in what is our digital present and our digital future. So, it’s incredibly important to get this right, and similar to our conversations around Servitization and business model shifts, doing so is trickier than it sounds because it is a matter of making some foundational changes. Digital transformation isn’t about a never-ending quest of technology investments, it’s about reshaping your business to compete in the digital era. My recent conversations have illustrated that there’s in many instances a missing of the urgency that is very real, and/or a lack of clarity on what it takes to make the changes needed.
In a recent conversation I hosted with Philip Carter of IDC, he spoke about a company’s digital identity and digital destiny. I’m curious – do you know your digital identity? Have you considered your digital destiny? My bet is many do not and have not, and that’s because we haven’t properly defined what digital transformation means for our business. The first step in your digital rebirth needs to be defining these terms, for your business, in a way that only you can do. Only then you can determine what your digital transformation needs to look like and take meaningful steps toward achieving success. If when you think about digital transformation and what it really means your head just spins, here are four surefire signs you need to consider a digital rebirth.
#1: You Haven’t Yet Realized/Admitted Your Company is a Technology Company
Every company today is a technology company, and this truth will only be multiplied as we step into the future. Out-and-out resistance is futile, and even hesitancy is putting you significantly behind. At one point we looked at digital transformation from the perspective of using technology to automate manual processes, but at this point the definition of digital transformation has broadened to becoming a digital company.
This can mean digitizing internally in a way that optimizes your use of resources, automates tasks to maximize output, streamlining the customer journey to create a seamless customer experience, and enabling the level of fast-paced, data-driven decision making that is needed today. But it can also mean using digital tools to create outcomes-based service offerings and even digital services for your customers. The options are limitless and unique to your needs and goals, but the truth is universal.
In Accenture’s Technology Vision 2021 report, the firm states, “Amid the challenges of 2020, two truths became evident. More companies than ever have embraced the axiom that every business is a technology business, and they’ve ignited a new era of exponential transformation as technology continuously reshapes industries and the human experience.” The report goes on to highlight the difference in performance between companies who embrace and take action on this reality versus those who lag, stating that digital leaders (the top 10 percent of companies leading technology innovation) achieve 2–3x revenue growth as compared to their competitors. Accenture refers to this widening divide as the “Digital Achievement Gap.”
#2: You Lack Technology-Adept Leadership
Who then is leading us into this new world of digital potential? That’s a very important question. I see all too often leadership within organizations that holds its company back from success for a variety of reasons. Sometimes it is overall resistance to change – the, “we’ve always done it this way and it works just fine” mentality. Other times it is overwhelm – not knowing where to start. And sometimes it is ego standing in the way of admitting the need of more digital expertise. It can be many different things, but to keep pace in the way you need to in the digital era, you must have technology adept-leadership.
As Accenture’s report states, “During the pandemic, it became starkly clear that there is no leadership without technology leadership. Rapid digital acceleration during the pandemic has cemented technology as the cornerstone of global leadership.”
To be clear, this doesn’t mean every leader has to be a technology guru. But it also doesn’t mean that every leader should go out and hire a digital leader just to shirk the responsibility of a foundational understanding, vision, and acumen. Technology-adept leadership also isn’t the be-all and end-all of digital success – we know that we know that people and processes are what most commonly foil these efforts. Today’s leaders need to combine keen technology awareness with agile and courageous decisions and ample amounts of emotional intelligence.
#3: Your Digital Transformation Efforts are Siloed
In the recent IDC conversation I mentioned earlier, Carter pointed out a statistic highlighting the fact that only 26 percent of organizations achieve ROI with their digital transformation efforts. The number one reason for this is the widespread existence of organizational siloes. There will be no true digital success if these siloes aren’t broken down to where the company is working toward an aligned vision for their digital destiny and working collectively on the digital transformation initiatives that will get them there.
You hear many conversations about how the business and IT are working closer on technology decisions. The Accenture report states that “83% of executives agree that their organization’s business and technology strategies are becoming inseparable—even indistinguishable.” The closer the communication and partnership across all functions of the business, the greater the impact your digital transformations efforts will have.
We discussed here the topic of building a digital dream team. The idea is that a team is formed that combines stakeholders from each function of the business with someone designated to “coach” – often a head of innovation-type title. This team approach helps to ensure that there are common, measured objectives; that duplicative investments and efforts aren’t taking place; that digital decisions are being made with the customer journey in mind; and that true progress is being made in prioritizing the efforts that will best help you reach your digital destiny.
#4: Your Tech Stack/Strategy Are Antiquated
This one may sound obvious – it might be time for a digital rebirth if your technology is aging. Well, yes. But you might be surprised just how many companies or leaders have outdated technology strategies or systems and simply don’t see them as such. It’s important to stay abreast of how digital has evolved, and continues to evolve, and evaluate how that evolution should impact your strategy.
We did an article recently with Cimcorp, discussing the five tenets of their modern approach to IT. We discuss the need to rethink the role of IT within your business, the benefit of relinquishing some control, the value of a platform approach, and more. The premise of Cimcorp’s thinking is to determine how to work smarter rather than harder so that the IT team has the bandwidth to focus more on the company’s digital strategy and digital future rather than its time being all-consumed by hands-on IT management. This thinking is incredibly smart, and what will set apart leaders from laggards.
In terms of the tech itself, Accenture states that “90% of business and IT executives in our survey agree that to be agile and resilient, their organizations need to fast forward their digital transformation with cloud at its core. Building a competitive technology stack starts with accumulating technical wealth—cloud strategies and microservices are the key. Enterprises need an adaptive technology foundation, and they can’t afford to be weighed down by legacy systems. As enterprises merge their technology and business strategies, they will start to play a bigger role facilitating people’s relationship with tech. This requires building trust—not just in products and services, but in the technologies behind them.”
I can imagine for someone reading this that is thinking a digital rebirth may be warranted, the idea likely seems very daunting. I won’t lie to you and say that it isn’t, but it is imperative. There is so much that rests on a company’s ability to be not just digitally competent but digitally competitive that it isn’t something you can ignore or delay. Daunting or not, mastering digital is simply a must.