Category Archives: Digital transformation

A digital paradox

We human beings are very adaptable and resilient especially when it comes to the use of technology. Think back to the introduction of new technologies such as telephony or the personal computer. To add to the picture, technology adoption rates are also getting faster. A recent Flurry Report suggests that adoption rates for smartphones are 10x the adoption rates for PCs in the 1980s, and 3x faster than the recent adoption of social media. Flexibility, ease of use and perceived real benefits are major drivers in this explosion of speed for technology adoption.

Enterprises have also taken to the technology revolution, and we see this in day-to-day activity. Our lives have changed dramatically with features like internet and mobile banking, online shopping and so on. Many enterprises have embraced the technology revolution in so many ways, and provided consumers with much greater utility and convenience.

The report card for enterprises

Yet on closer examination, the report card for enterprises in both government and private sector is not as rosy as it may seem, with digital transformation still needing a long way to go. Many enterprises are still organized in vertical towers that don’t easily communicate yet alone collaborate with each other. Their technology platforms are geared to support this orientation and are inflexible to change and response to the market. Many cultures are still built around traditional organization structures and environment, and capabilities are still shaped by this thinking. These are not just impediments to doing things better and smarter, but are also compromising value that can be added to customers, citizens, employees and shareholders.

Consider the struggle that some retailers have in re-aligning their strategies to be focused around omni-channel than simply multi-channel. Financial services enterprises are still challenged to fully gear themselves both organisationally and culturally to the concept of the customer segment of one. Many service organisations still have a so-called “online” division that is separate from the rest of the enterprise. In many instances, we have a long way to go to embrace the mantra that digital business is the business.

The gap between industry leaders and laggards in digital transformation will grow rapidly over the next decade with major implications for shareholder value. This is a key finding from the recent compelling report from IBM entitled “Reinventing Australian enterprises for the digital economy”.

So what can enterprises do? There are three things that enterprises need to consider differently.

1. Treat digital as the business not just a part of the business

Digital transformation is about the entire enterprise embracing all elements of the value chain – customers, employees, suppliers and stakeholders. It is not about an online division that might be considered a somewhat quaint part of the enterprise. Digital needs to underpin all aspects of the enterprise, and there should be a mindset that embeds this thinking in everything the enterprise does.

2. Frame a different starting point

Typically, there is a natural inclination for enterprises to start with what they have today and apply a “projection” mentality. This is understandable given the information that they have available. But if organisations started with a point in the future (say ten years out) and work backwards, they will see their challenges and opportunities in digital transformation in a totally different frame.

3. Embolden the narrative

In one of my recent blogs, I spoke of the need to create a digital transformation narrative. This is not a plan, but rather a view of what digital transformation would look like for an enterprise in 10-15 years time. This needs to challenge the thinking of the enterprise to make a real difference in this space, and drive a clear departure from incremental thinking.

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Filed under Business model, Digital transformation