Ask business people what they understand by digital transformation and most will reply along the lines of: changing the technology that our organisation uses to facilitate a more digital, more customer-centric way of operating.
They’re right, but it’s only half the answer. Successful transformation also looks at a more complex technology: the human mind.
Transformation or whitewash?
According to Forbes, 70% of digital transformations fail to reach their goals. A great deal of the blame for that can be laid at the door of those who misunderstand what the transformation should entail.
Matt Kearney, Senior Strategy Director for NTT DATA Digital, says that “digital transformation can lag or even fail due to lack of agreement and senior executive buy-in about what it means to the organisation. What some describe as digital transformation is actually digital business optimisation: using mobile apps, AI-based chatbots, analytics and other digital services to augment their existing services.”
What some describe as digital transformation is actually digital business optimisation
If the business model and the business mindset stay the same as they have always been, even if they now use shiny new technology, it’s not a transformation.
Nicola Mortimer is Three’s Head of Business Products, Marketing and Operations and she also chairs Three’s Business Transformation Team. She describes failed transformations as “the equivalent of whitewashing the cracks in a building which is not only crumbling but also unfit for purpose.”
A true digital transformation, says Matt, “is when the company is pursuing new revenue streams, products and services and business models which are primarily digitally based.” As such, the transformation should be root and branch, brain and culture, as well as tools and technology.
To achieve that, it needs above all to be strongly led in every strata of the organisation. Firstly from the top, of course, by a Board that believes in and encourages transformation. Secondly by Heads of Department who can see the bigger picture and understand how new ways of working will deliver more success. Thirdly by managers who appreciate the benefits of the new technology in terms of, for example, speed and efficiency and who realise the importance of encouraging staff to do new things with new tools in new ways. And lastly, by the customer — whether internal (your employees) or your target buyer. They need to embrace, use and benefit from the change.
Transformation should be root and branch, brain and culture, as well as tools and technology.
Seeing through the customer’s eyes
Technology is proving the truth of the maxim that the customer is always right.
Today’s business transactions are increasingly customer-led. Customers will be well-informed about your solutions or service before they ever make contact with your business, having researched extensively online. Then how they make contact — online, by email, by phone or face-to-face — is their choice, not yours.
If customers are ultimately the ones in control of the purchasing journey, how can they be wrong? That’s why it’s essential to adopt the mindset of seeing things through the customer’s eyes.
In the case of digital transformation, it’s also important to remember that the customer is not just “the customer”. Anyone and everyone who is a user of the new technology you are introducing is, in effect, a customer — even if they are your employee. Matt says that successful digital transformations focus on overhauling the organisation with a customer-focused goal in mind. “As such, there is no singular playbook, but empowering employees with fit-for-purpose digital tools and ways of working is always a vital component.”
As Nicola Mortimer points out, “Your employees will be the ones using the technology all day, everyday. If it’s too cumbersome or complex, unlike the external customer they can’t just walk away and do business elsewhere. However, they may be more inclined to seek alternative employment, and they can and will find workarounds that could put your organisation's confidential data at risk.”
Therefore it’s essential that your employees are on the journey with you, and they are ready to change the way they work, not just the tools they work with.
It’s essential that your employees are on the journey with you, and they are ready to change the way they work, not just the tools they work with.
The digital chicken and egg
New technology and ways of working are the chicken and egg of digital transformation. The pace which transformation demands means change can’t flow down from the technology to the end user, but has to be introduced in an agile and flexible way as part of the whole package. If your business is to remain competitive, you can’t delay adoption of the digital tools your competitors are already using. Therefore you need to prepare employees for change, even as that change is taking place.
If all that sounds like a huge challenge, it’s because it is. It’s likely you are already in the throes of going more digital, and a transformation project could take as long as two years to come to fruition. Patience and resilience are required on the part of those who are leading it.
In today’s worlds of business and technology, change is not an event but a continual process. Every new development will throw up potential new business models, more choices for customer journeys, more ways for customers to buy the way they want, whether or not it's how you want to sell. If you want to go on being in business, change has to become part of business as usual. Most importantly, change has to be ongoing in the only technology for which you can’t buy an upgrade — our minds.