Industry TalkRegular Industry Development Updates, Opinions and Talking Points relating to Manufacturing, the Supply Chain and Logistics.
How to succeed in digital change?
Agility, flexibility, adaptability. These three characteristics have taken centre stage as the qualities needed for business to remain competitive. Time and time again in recent years, innovative use of digital technology has been shown to be capable allowing trailblazers to be creative with their business models and disrupt the market to their advantage: Airbnb, Uber, Hasbro, Pfizer to name but a few.
However, research by consulting firm McKinsey claims that the vast majority of organisations are only operating at a small fraction of their digital potential. At the same time, our own research has shown that over 50% of IT decision-makers believe they’re not transforming at the speed employees and managers expect.
So – what is going wrong?
The assumption is commonly made that start-ups, dot coms and Silicon Valley-born unicorns get this right, while the old guard – legacy monoliths, traditional enterprises and non-digital natives – get it wrong. In reality, neither get it right.
Established multi-nationals often have the resources needed for digital transformation but sometimes lack the ability to make it happen quickly and suffer from internal resistance to change because of scale. Start-ups might have the brightest data scientists, the coolest workspace and limitless enthusiasm but often lack the ability to create impact at scale.
Executing digital change can problematic for all organisations but we have found that three things can greatly increase your chance of success:
A leadership who is unified around a strategic digital capability ambition
Digital transformation needs to be led from the very top of an organisation The ambition needs to be bold and strategic and the implementation needs to be driven by agile-enabled interdisciplinary teams that combine the necessary design, data engineering, analytics, workflow, integration, UX & visualisation skills paired with function & domain expertise empowered with the appropriate authority of the CXO’s of the impacted business units to deliver against the Digital strategy.
Transformations that are either founded from purely operational ambitions, such as cost savings or improved end-user experience, or driven from a single business perspective, e.g. IT or a specific business unit, will, at best, simply achieve a technological enhancement to traditional ways of working, or, at worst, fail to deliver any value at all.
Organisation-wide buy-in for the change
Most organisations are matrixed, and a very practical issue is getting enough time from the contributing business units. However, for a digital transformation to succeed it needs to be highly-focused on the needs of end users with high expectations around functional depth, ease of use and domain relevance – this means that end-users need to be fully bought-in to not only provide their domain expertise at the design stage but also to make sure that any changes are fully embedded at the operational level.
Successful digital transformations also need to be flexible enough to meet diverse needs of user communities and environments as well as a fast paced, changing market or environment – which means that whilst they need to be based on bold strategic objectives they also need to be coloured by operational realties.
Sufficient critical enablers in place to prove the value of the transformation proposed
One of the key determinants of whether a digital transformation will be successful or not is the ability to abstract from, and then, obfuscate an increasingly complex network of back end systems and cloud based microservices. Hence, forming, training and proving a core Digital transformation capability that demonstrates the value to all up front is a wise investment.
However, it is a very rare organisation that has a consistent way of working right across every business unit. Likewise, there are many flavours of agile, service architectures, project planning & reporting. Therefore, rather than spending too much time arguing which one is best when any would be good enough successful digital transformation teams simply just get on and prove by doing.
Besides, the Digital marketplace is fragmented and complex and architectures must be dynamic and evolve over time a digital transformation without an accompanying on-going design and development capability is just asking for trouble.
Change implies unpredictability, complexity and risk that could hold the potential for disruption, so it’s natural for the operational and tactical levels within businesses to have an aversion to it. However, in todays world businesses must go digital or perish.