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Cloud: the dangers of transforming too fast

Coronavirus has doubled or tripled the speed at which businesses around the world are digitally transforming, but a lack of data skills and worker buy-in could trip up efforts before they get started

Never before have businesses, even the most risk averse, had to transform their strategy so rapidly. When the coronavirus pandemic hit in early-2020, businesses had to digitalise fast. With employees shifting to working from home overnight, executives had to find ways to keep their teams working, engaged and productive, while supplying valuable services to their clients, without ever meeting face to face. 

Businesses that had transformation strategies and plans for adopting digital technology in place had to reassess their approach and those without any digitalisation in place had to get on board doubly fast. This instant adoption of approaches that may have otherwise taken years made old ways of working obsolete. 

Accenture’s Technology Vision 2021 report recognises this acceleration and lays out some staggering figures. According to the research, we are seeing unprecedented levels of digital transformation, with leading enterprises compressing a decade of change into just one or two short years. Some 92 per cent of leaders report their organisation is innovating with “an urgency and call to action” and 77 per cent of executives state their technology architecture is becoming “critical to the overall success of their organisation”.

Sometimes being forced to evolve is the only way many companies, particularly those set in their ways, were ever going to do so. However, moving too quickly can mean businesses aren’t getting the best from their new digital strategies. 

The Accenture report explains that digital leaders – the top 10 per cent of companies leading technology innovation – achieve two to three-fold revenue growth compared to their competitors. They call this chasm the “digital achievement gap”. However, it is not enough to transform digitally without recognising and analysing what you’re doing and why. 

Steven Darrah, chief executive of European Technology Risks, believes that while changing things quickly is exhilarating, it can create unexpected problems in other areas. “When innovating in more traditional sectors, such as insurance or banking, it can take a little while to generate traction, both with service providers and customers,” he says, adding that companies need to be aware of customers’ reticence to try something new.

It is risky to set any new business course without knowing first where you start and where you think you may land

It’s important to be aware of the disconnect which technology can create too, especially if the transition isn’t handled correctly. Service providers may think they are doing a good thing by integrating a new piece of technology, but it can lead to some users feeling unloved and cast aside.

Darrah believes data is the best way to track insights, which can be invaluable when hoping to disrupt a sector. “Data can also tell you when you are going wrong. Even the smallest of changes in the user experience can result in a dramatic dip in sales performance, so analysing the data can keep you on the right track,” he says.

Marketing analyst Jo Gordon helps businesses make the best decisions with a data analysis approach of econometrics-marketing mix modelling to measure outcomes. “It is risky to set any new business course without knowing first where you start and where you think you may land,” says Gordon. 

She believes data analysis is the clearest way to help business leaders avoid falling flat on their race to evolve. “There is now enough data to analyse and measure the impacts from one company to the next,” says Gordon. These differences can be complex, as some effects may be positive for one company, but negative for another. 

The boundaries may also shift, whether due to consumer habits adjusting or the impact of long-term lockdowns. “Companies that already had analytics in place are in a much better position to navigate this complexity. They could not better control how they were hit, but they were able to unpick the multiple threads and game-play likely scenarios to minimise uncertainty,” she says.

Lua Cooper at digital consultancy Greengage pre-empted these growing pains. “For a long time, we talked about the digital revolution that was coming and the ‘future’ of work,” she says. “We knew we needed to prepare. More often than not, this was a problem to solve tomorrow, for tomorrow’s budget and on tomorrow’s timeline.

“Last year, digital transformation programmes that were set to roll out across years, were suddenly signed off and speedily rolled out in the days, months and weeks ahead. Working four times as fast, with a fraction of the resources, left room for mistakes to be made.”

Cooper references the failure of the NHS Track and Trace database, arguably a notoriously expensive mistake, as emblematic of the drawbacks of transitioning too quickly. “With little time left for testing, data collection and analysis, the surety of the solutions remain in question, but even more damaging than a bug or two are the rumblings of the lack of staff buy-in and frustration,” she says. 

The most “expensive misconception” is believing that the term digital transformation relates only to rolling out tech and systems in your company. The reality is far more comprehensive. “It’s the complete reimagination of your business in the digital age,” says Cooper.

Digital transformation encompasses many key areas: artificial intelligence, new hardware, cloud deployments, remote-working solutions. Data analysis can be an invaluable tool when avoiding pitfalls, but it’s important not to forget the humans involved in business, especially at a time when we don’t always see them. 

“When your teams are not able to handle the changes that come with digital transformation, then you could actually slow down instead of accelerating. You should upskill your teams and at the same time update your systems to cope with the changed landscape,” say Antonio Marsocci and Sebastian Kraft, managing partner and digital director of Think Positive Agency respectively. 

It’s also key to prep your clients or find new ones as your existing clients might be used to finding you on the shelves of their local supermarket or retailer, but now you sell direct to consumers, how do they find you?

Cooper agrees, citing a statistic from the Lloyds Digital Skills Index that notes 52 per cent of the workforce still lack workplace digital skills. This isn’t a failure on the part of the individual, but on the employer. Digital moves quickly and employers need to actively train people inside their business to evolve. This has been nearly impossible in a year without face-to-face office-based contact.

“The best tools in the world will gather dust unless they have a team willing to get behind them and work diligently to help optimise them over time. Digital transformation starts with your people; you can implement the tech, but don’t forget the people who have to use it,” says Cooper.

Digital transformation is both exciting and necessary, but without properly assessing the data and factors, businesses will find they lag behind or encounter damaging pitfalls. The lessons learnt from the last year point to a couple of ways to insure yourself. 

One, invest in data analysis to understand the slightest changes to your business, even incremental ones. Two, don’t forget the people involved. Even if you move everything to digital processes, your clients, customers and employees are still human beings who need to adapt. Without being taught how to adapt to new ways of working and consuming, they’ll fall behind and your business will too.