Charting a path toward Digital Transformation in the face of uncertainty
Thu 10 Dec 2020 | Tom Kiblin
In order to stay competitive in today’s market, IT leaders must focus on business outcomes for their employees, customers, partners, and suppliers, and work backwards on planning and execution from there
COVID-19 has accelerated years-long digital transformation initiatives for enterprise teams into a span of months.
But digital transformation in business today isn’t just about supporting a remote workforce. We can’t continue to rely on in-person engagement for any business processes. Digital-first operations for employees, customers, partners, and suppliers are no longer merely a differentiator; it’s table stakes for surviving during the pandemic economy and beyond.
Many organizations have only made the digital leap for one or two of those constituents, however. Once these basics are addressed, the hard work begins. How do you transform all components of your business into a digital model to meet rapidly changing market demands while mitigating risk?
For IT leaders, this may be uncharted territory, but the winds are blowing steadily in one direction and they’re leading all ships toward a digital future. Here’s what to consider when embarking on a digital transformation to ensure your organization is on the right course.
The stakes of Digital Transformation: Survival
First, what exactly is the goal of digital transformation for organizations today?
To put it mildly, the goal is for companies to stay competitive while fighting tooth and nail against competitors, from big versus small to traditional versus non-traditional. While a global pandemic may have been the disrupting agent that moved the workforce remote practically overnight, the pressure to meet customer demands online 24/7, for example, long predates COVID-19. Digital disruption across industries is nothing new. The stakes are just higher than they’ve ever been.
But being digital-first extends beyond the product-to-service model. It’s true that service-focused companies were better positioned to weather the storm of COVID-19 from the start, but market demands have pushed small and mid-market enterprises to radically rethink all the ways they engage with their stakeholders.
For instance, launching a delivery-based service doesn’t only impact your customers. If you’re in pursuit of a business model that delivers your products and services to your customers’ door, you must think about how and where your partners, suppliers, and employees execute all business processes. If you don’t account for the transformation of all constituent operations simultaneously, you’ll duplicate work and create more problems than you can solve – and your business sputters while other companies blaze ahead.
Before you take action, identify target business outcomes
Before you begin your digital transformation of any scale, you must first answer this critical question: what business outcomes do you want to achieve?
You’ll want to land on an answer that ties innovation to the core of your business – your constituents. How can you leverage technology to improve the experience of your customers, employees, partners, and suppliers, the stakeholders directly responsible for your growth?
Outcomes might be enhanced customer service, improved internal processes, increased time to market for new products or more consistent partner communications.
Survival isn’t a business outcome, though it is a motivator. The market tells you that digital transformation is do or die, but what you do hinges on what you want to achieve. Tactical technology objectives like “adopting cloud storage” or “introducing AI” aren’t business outcomes, either, but they can support them.
The answer to that initial question will guide how you make decisions in planning.
To plan digital initiatives, listen to your constituents
The present challenge in pursuing your business outcomes through digital transformation is that resources are limited. Unlike the business giants operating with infinite amounts of capital and wide margins of error, you must strategize scrupulously before you invest in anything. The stakes are too high not to – the giants will only get bigger if you fail.
The best way to balance high risk and a high demand for change is to gather information about which business processes have and haven’t been working for your organization until now. Here’s what you might investigate for each of your constituents:
- How have your employees fared during the remote work transition? Are the systems in place adequate for sustaining their engagement and productivity?
- What have your customers told you in the past six months? Are they satisfied with the value of your products or services? What are they asking for that you aren’t offering?
- What are your shareholders’ or investors’ expectations?
- Has your supply chain been recently disrupted? What are the sources of the disruption, and how can technology help? Do you need to rethink supply based on geographic availability?
To get the answers to these questions, you’ll need to talk to your constituents. If you want to plan thoroughly, you’ll need to align all central business functions, especially IT and finance, and seek external opinions from customers, partners, and suppliers. Only then can you identify the areas most important to your desired outcomes and begin to allocate the necessary budget for innovation.
Redesign or reinvent: decide which is the more feasible path toward success
After planning comes execution, which will look different for every organization. The question of reshaping IT infrastructure boils down to this: will you redesign or reinvent existing frameworks? Which process is a more feasible means of achieving your business outcomes?
The reality for many organizations is that resource limitations will mean a redesign is the only feasible option. An IT infrastructure redesign, for instance, might be more realistic when a reinvention of your business with cloud-native applications may be prohibitive from a time and cost perspective. But a redesign is still a viable path toward dynamic business outcomes like streamlining the customer experience or improving operational efficiencies.
If you do decide to reinvent, you’ll still need to tie every step of your IT restructuring to your business outcomes. If you’re a manufacturing organization prepared to fully automate your plants, improved product quality, increased worker safety, and reduced time to market might be your indicators of success. Executing automated production alone is not.
Whichever route you choose, you will likely end up with a complex set of deliverables to meet. That’s okay. Digital transformation is incremental, and you’ll need to be open to an agile execution strategy to consistently ensure you’re on target. IT leaders should feel empowered to reallocate talent, funds, and time on a monthly or even weekly basis.
Leverage digital transformation to improve outcomes for your constituents
Digital transformation is no longer a nice-to-have. It has become a must-have tactic for organizations looking to compete with business giants who are constantly raising the bar for digital service levels.
But IT leaders shouldn’t fall into the trap of simply doing something because everyone else is doing it. In order to stay competitive in today’s market, IT leaders must focus on business outcomes for their employees, customers, partners, and suppliers, and work backwards on planning and execution from there.