As published in Business Express, November 12, 2021
In an organisation’s race to adopt the latest digital tools and channels to build competitive advantage and boost profitability – whether it’s IoT, mobile, cloud or AI – there can be a very natural tendency to approach digital transformation technology-first. But there are essential foundational considerations that must come first (or run in parallel) if the end goal is to achieve value-driven business outcomes, rather than straightforward technical modernisation.
A digital transformation is rarely a complete overhaul of business systems. It is more typically a key goal (or set of goals) that leverages a digital process or capability to deliver an outcome most efficiently and effectively. One analogy that works well is to consider the primary goal of a facilities organisation responsible for keeping city centre bins empty. You have two options to deliver this outcome. The first is to send a garbage truck on a route to empty every bin in the city centre. Or alternatively, you could deploy ‘full’ sensors on each bin and a smart GPS route-planner to automatically create a route each day that only includes the bins that need emptying. By building the capability in the second approach, you can deliver that goal in potentially half the time at half the expense.
Examples like this illustrate how easy it is to articulate the potential and value of digital transformation projects – but it’s harder to know where to start. However, there are five essential foundations that really help organisations achieve and sustain advantage from digital transformation:
1. Board level buy-in
Having a team of senior business leaders who are bought-in to the transformation at a cultural level will ensure that the project is aligned to business objectives. Transformation is a long-term strategy, which involves culture and process. To embrace evolving scope, risk, cost and value, projects must work on a value-driven, rather than cost-driven, basis. Clear goals should be established, with measurable KPIs so that performance can be assessed at any point.
2. A single customer view
Enhancing customer experience and engagement is a core focus of many digital transformation strategies. Creating a single customer view across all touchpoints is critical to connect the consumer to the brand via multiple channels. This means connecting data from multiple points in the customer journey, such as billing, marketing and sales, to one single known entity. Only through delivering information to the customer in the way they want to receive it, and optimising customer experience, can an organisation build trust, loyalty and revenue.
3. Integrated data
Another key foundation for digital transformation is data quality and integrity and where this data resides. If data is held in silos and can only be retrieved from disparate departments, such as HR, finance, sales, then their reporting systems will remain unconnected, rendering it useless for creating actionable insight across the business. A clear data strategy, with the use of data modelling and data management strategies, will be the best basis to develop new digital capabilities.
4. Service-driven technologies
As new technologies become available, more niche/ granular solution areas emerge, such as user authentication, payment gateways and media streaming. It’s therefore critical for a business to understand and leverage service-driven technologies. This typically means many layers of technology systems, and needing to connect together various off-the-shelf modules and services into one coherent system. The beauty of a cloud platform ecosystem like Microsoft Azure is that it comprises a wide range of component solutions as a service to plug in, which you can instantly access. Through leveraging service-driven technologies, and avoiding a raft of disparate peripheral solutions, a business can focus on building meaningful capabilities.
5. Strong internal reporting
Another critical success factor is setting measurement and reporting goals. Reporting must be understood, trusted and actionable – without this, it’s hard to measure impact beyond the macro levels of revenue. Data quality needs to be high for reporting to be effective and reporting is critical to be able to assess the project at any stage and keep the project on track.
Digital transformation only means what it means to your business. The factors outlined are common to most projects which aim to keep the customer front and centre and rely on data to provide actionable insight for real business advantage. Implementing these core foundations will set the project on the right path to success.
You can read the published article here.