Digital transformation has helped companies to improve their processes, gain new capabilities and adjust their business models to stay ahead of the competition and meet consumers’ rising expectations. This process is rarely linear and it has no end point. Along the way, a firm will sometimes find itself asking: what next? This is particularly likely when the digital strategy misses its targets for cost-efficiency, say, and/or when parts of the plan are rendered obsolete.
Navigating such situations and making the changes required to restore momentum can be difficult. How can business leaders readjust and reinvigorate their firms’ transformation efforts with the right mix of focused ambition and realistic risk awareness?
Don’t lose sight of your business objectives
Tony Farnfield is a partner and country leader at BearingPoint UK, a management and technology consultancy. He stresses that, while digital transformation is a matter of urgency and powerful tech such as generative AI is increasingly alluring, a business must never lose sight of what it and its customers actually need.
“The temptation is to let these exciting new technologies drive requirements – a ‘tail wagging the dog’ situation,” he says. “That would be costly, time-consuming and counterproductive. It would dilute your potential competitive advantage.”
The temptation is to let these exciting new technologies drive requirements
Farnfield reports that BearingPoint UK has been helping a firm in the financial services sector to stay focused on its strategic needs over the four years in which it’s been adopting various cloud technologies.
The client is “moving into a run mode, focusing on continuous improvement and innovation, when new technologies that support competitive differentiation can be tested and developed”, he says.
The changes that a firm must make will vary depending on the type of business and the scope of what it’s attempting. But any company should review and adjust its plan regularly, remembering that a digital transformation is a continuous, iterative process, rather than a single big bang.
Build upon success and don’t be afraid to get creative
“The guiding principle should be that a digital transformation is a programme of work entailing incremental changes planned over some time. Each change should build on the previous one. This is not about trying to undertake one large-scale piece of work.”
That’s the view of Steve Grainger, founder and managing director of digital development agency Enigma Interactive. He says that, “if your transformation efforts have been successful so far, you’ll naturally have created momentum that you can build on”.
Grainger thinks that any successes should “increase a business’s ambition to be more creative in its thinking about what digital can help it achieve”. Crucially, these should give the firm greater confidence to consider “breaking” existing processes, even if they seem to be working adequately.
“When you see digital transformation as bringing together small changes that align with the agreed business strategy, it becomes a low-risk, high-reward process,” he adds.
Take the whole organisation with you every step of the way
Domestic & General, a specialist in appliance insurance, maintenance and repair, began its digital transformation more than a decade ago. The process initially entailed a few iterations of change powered by data. It gained momentum early last year when the company replaced several old systems and processes while adopting a more product-centred approach.
“Our focus used to be on functional or team-based targets. Now the whole company focuses on an outcome or an experience – the ‘product’,” explains the firm’s CEO, Matthew Crummack. “This way of thinking evolved from when we stopped viewing a product as something a customer buys in a single moment and started thinking of it as what that customer experiences over a period.”
You can change either a system or a process, but not both at the same time
Domestic & General has made significant progress in instilling the required changes over the past 18 months, but Crummack admits that it hasn’t been straightforward.
The first challenge, he says, was to ensure that the technology team was organised correctly and had the right people in the right positions. Then it was a matter of “getting out of their way so that they could execute. The right team will always figure out the answer, even as the technology evolves.”
But the greater challenge has been to ensure that the whole organisation understands the need for change and is on board with what’s going on. Crummack explains that a digital transformation “is not something that happens to others. It’s an initiative that everyone, from the CEO to the newest graduate recruit, must embrace.
This has required the leadership team to allocate enough time to ensure that it fully understands every operational process that had been enabled by the legacy systems it was seeking to replace.
“You can change either a system or a process, but not both at the same time. You’d lose everyone by attempting the latter,” he says.
The business has reached the point at which it can explore the full capabilities of the new tech it’s been adopting. This has raised ambitions and created further potential for change, according to Crummack.
Leaders must not become complacent
Even where transformation efforts have delivered outstanding results, business leaders are often wary of moving up a gear. This is understandable, because change fatigue is a genuine risk, yet such reticence could jeopardise any competitive edge their firms have gained. It’s a tricky balancing act, as Rodolphe Malaguti, product strategy and transformation specialist at software firm Conga, notes.
“Companies will often rush their transformation programmes because they feel that they must stay ahead of their competitors. As a result, they execute them poorly,” he says. “But there are risks when companies feel that they have done enough and so put their activities on hold.”
Recent leaps in generative AI have highlighted how technologies are constantly advancing and offering ever more opportunities to improve efficiency. Firms that don’t remain ambitious therefore risk getting left behind, Malaguti stresses.
“At a basic level, digital transformation is all about reconsidering the relationships between people, processes and data,” he says. “Technology does not need to be ground-breaking. Integrating systems and streamlining processes should be the priority to ensure that data management and workflows are properly structured and fully optimised.”
Does your business need a digital transformation officer?
Given the importance and complex nature of the transformation process, there may be a strong business case for creating a dedicated role overseeing it and appointing an experienced specialist as digital transformation officer.
Lee Frame, managing director of consultancy TAL Partners, says: “If your strategy involves a lot of small, manageable steps, you may not need to think about this just yet. For those that might entail overhauling the work of a whole department, say, it could be worth getting someone in to ensure that the process goes as smoothly as possible.”
One option would be to hire someone temporarily to cover the immediate changes being planned, but firms in sectors where the technology advances particularly quickly would probably be wise to seek a permanent appointee.
As Frame notes, an effective exponent of this role will “not only help with your existing digital transformation efforts. They will also look for new tools and strategies that can in turn be implemented to further your business’s transformation.”
