Successful digital transformation is by no means guaranteed. Undertaking transformation doesn’t equal success. Research firm Gartner has found most organisations don’t have a clear vision of the initiative, especially in a way that is easily understood by employees at middle management and below. And the process sometimes takes the focus away from operational excellence, which can result in visible, avoidable failures that hurt the reputation of executive leaders.
While undertaking a transformation process, designed to capture the benefits of digital technologies and improved performance, requires commitment and focus, five key digital transformation success factors have been identified. Leadership, capability building, empowering workers, upgrading tools and communication are integral to a successful transformation, according to research by McKinsey & Company.
In 2020, the coronavirus pandemic has dramatically accelerated the need to reshape in order to meet the challenges organisations are facing across the board. According to Gartner, the pandemic has forced rapid digital innovation and created the need for cross-functional teams that bring together technology experts with business analysts to work collaboratively and at speed to develop new platforms and solutions.
Here leaders from across the spectrum expand on the digital transformation success factors in 2020 and beyond.
1. Leadership in the transformation process
Leading a successful digital transformation and avoiding common pitfalls is not a destination, rather it’s a mindset and a journey. Effective leadership builds confidence in the transformation process and is paramount to a company staying competitive in the future, says Ian Kieninger, co-founder and chief executive of AVANT Communications.
If the decision-makers within an organisation don’t fully buy in to the journey, it will hold back innovation and growth. “Leadership doesn’t necessarily need to understand the technical aspects of all digital transformation initiatives, but they need to have the foresight to encourage and embrace change, setting a vision employees can
follow, carry out and believe in,” says Kieninger.
He believes the leadership needs to evaluate if it has the right skills to bring a new vision to light. And while these capabilities and skills can come from within, investments in the right people are essential.
“If the organisation doesn’t have the necessary skills, successful digital transformation can still be achieved by investing in outside partnerships that can get you where you need to go. Whether this involves hiring different talent or partnering with a trusted adviser who has the necessary expertise, there are many ways to get this right,” says Kieninger.
2. Digital innovation through capability building
Developing the right talents and skills is one of the important transformation initiatives. While some people might immediately say digital technologies are the key success factor, those who are experienced in the process would say that’s not necessarily so. Chan Suh, chief digital officer of business transformation specialist Prophet, warns against being seduced by the promises of technology’s magical tools for creating revenue growth.
While businesses may need digital innovations such as artificial intelligence for deep insight, tech stacks are just tools and, without the right operating instructions, they either lie fallow or become money pits. Suh says it’s a mistake that has cost global businesses billions of dollars in wasted investments.
“We need the conceptual strategies and innovations to guide our tech investments as well as the human expertise to use it properly. However, that human expertise is especially rare when it comes to navigating the highly complicated interdependencies of digitally powered businesses,” he says.
With building capability, the key is the right mix of human expertise and technology working in a coherent, flexible operating model with the customer at the centre. “The goal of digital transformation should not be to become a more digital company, rather it is to transform into a modern, powerful enterprise capable of generating uncommon growth,” says Suh.
3. Empowering workers is a human success factor
Managing change and setting the scene for the new landscape can’t be understated in the transformation process. And as continuous improvement becomes the norm through the coronavirus pandemic, it’s critical leaders focus on collaboration, communication and building a culture that supports speed and agility in the face of so much uncertainty. It’s why empowering workers is one of the digital transformation success factors.
Taking an employee-first approach is no longer a nice to have, but a need-to-have strategy for businesses navigating the current uncertainty, according to Andi Britt, senior partner, talent and transformation, with IBM. “However, engaging and empowering a wide variety of audiences is a skill; one that can be cultivated with data-powered insights and in-the-moment coaching,” says Britt.
“That means businesses need to implement design thinking, experiential learning and co-creational models that incorporate agile feedback loops with continuous learning and improvement. These methods can be applied for both internal and external best practices.”
The pandemic, with the rapid adoption of remote working tools and the need to ensure employees’ wellbeing and productivity, has only emphasised that leaders who prioritise collaboration and open communication pave the way for individuals to experiment and trial new technologies. “This open environment to trial and re-examine outcomes inherently fosters a more agile team structure, which we have learnt supports efficient and effective digital transformation efforts,” says Britt.
4. Upgrading tools with the right digital technologies
In the digital transformation process, the right tools are an effective suite of digital technologies. However, it’s crucial to avoid the pitfalls of rapid digital innovation, particularly when it comes to data management.
Data is now at the core of every digital business. Irrespective of the industry, a growing movement towards an increasingly privacy-centric environment is now our new reality and consumers are taking note,” says Prateek Dayal, chief strategy officer of Aqilliz.
“With the swathes of consumer data being ingested on a daily basis, organisations need to place greater emphasis on investing in technologies that can ensure greater compliance and transparency in how customer data is collected, stored and used in accordance with relevant privacy frameworks,” says Dayal.
Yet when it comes to upgrading tools and infrastructures, one of the common pitfalls is over-investing in single solutions, which are ultimately inefficient and lead to technology duplication. Instead, businesses need to select technologies that are inherently private by design, offering infrastructures built with compliance in mind.
“The lesson to be learnt when upgrading tools is choosing new technologies wisely, opting for solutions that can offer long-term holistic offerings, while placing precedence on those that can ensure greater compliance with an ever-evolving regulatory environment,” he says.
5. Closing the communication loop brings continual improvement
Why is it important to have everyone in the loop? Effective communication binds all the other digital transformation success factors into a cohesive whole. But businesses are now under unprecedented pressure to provide a comprehensive digital offering, running the risk of insights being overlooked in the race to get to the finish line.
A digital transformation is an opportunity to open conversation channels with both customers and employees. “It’s the only way that digital offerings can understand and meet the shifting needs and expectations of customers,” says Gillian Mackay, head of consulting in Asia-Pacific at InMoment.
Mackay says the biggest mistake a business can make is assuming it knows what its customers want. “Digital transformation can only be truly realised by first collecting feedback to validate customer expectations. Communication prioritises what matters to customers and informs the channels to deliver for maximum
benefit,” she says.
By implementing fully informed changes to the business, it communicates to customers and employees they’re being heard and builds trust, a valuable business commodity. “Having the trust of your customers and employees generates support and understanding towards the implementation of your digital transformation,” Mackay concludes.