Digital transformation is having a huge impact on all organizations—large and small, private and public.
Competition from new market players, fast-changing consumer and citizen demands, and the proliferation of new business models is disrupting the status quo. To meet these challenges, organizations are investing in digital technologies to transform their legacy environments and connect them to new digital business models.
Digital technologies are enabling organizations to integrate their lines of business across the enterprise, continuously collect and analyze valuable customer data, and turn that data into actionable insight, with the end goal of becoming customer-centric, agile and value-driven enterprises.
But, the hard truth is that 8 out of 10 digital transformation initiatives fail to deliver the value that’s expected of them. One reason is that when it comes to digital transformation, technology is only part of the answer. Realizing the promise of digital requires transformation across three areas—organization, business model and technology. All three areas are inextricably linked, and it’s important to include each as part of a holistic, enterprise-wide digital transformation strategy.
Transforming your organization
Organizations that have the right structure and mindset are better able to put customers first. Only when organizations are curious about what customers (or citizens) want and need, can they optimize the customer experience across all their touchpoints and create innovative new products and services.
To survive and succeed in an age of disruption, organizations need to move from a centralized, hierarchical organizational structure to autonomous, cross-functional teams close to and centered on the customer. This kind of transformation requires building a workforce not just with the right skills and experience, but with the right mindset—a mindset that is curious and collaborative, with leadership focused on driving innovation and overcoming resistance to change.
Transforming your business model
Business model transformation involves exploring and investing in new business and operating models—business models that are customer-first and agile, and operating models built on integrated, automated and real-time processes.
It involves thinking outside-in and reaching out to partners, not just for technology solutions, but for help in building customer relationships, opening new sales channels, sharing information and other assets, transforming the supply chain, creating new market opportunities, and driving innovation.
Through business model transformation, organizations become lean and agile, capable of responding quickly to changing customer and market demands.
Business model transformation also drives frugality and simplification across the enterprise, so that the organization can do more with less—and faster—while focusing more on its core business, as well as strategic activities that add value.
Transforming your technology
Technology transformation centers on leveraging digital technologies that automate data capture, analytics, decision-making, processes and customer interaction across the enterprise. These technologies are creating fantastic opportunities to do things differently, driving efficiencies, collaboration and innovation. They’re helping organizations to reduce the cost of running their business and free up funds to invest in changing it for the future. The end result is new products and services, an enhanced customer experience and increased competitiveness.
However, these technologies can’t just be bolted on. True digital transformation is where an organization’s business model is digitalized from end-to-end with embedded security—and the culture morphs to adopt new values and behaviors.
If you’d like more details on this approach to digital transformation or have questions, feel free to email me. I also invite you to watch a brief video, Seizing the opportunities of digital transformation, that describes the approach.