Just when you think you have had it all figured out, a cunning face of change beckons…. shaking the foundations of your business. The new kid on the block – digital transformation is changing the way businesses conduct business.
So – What’s digital transformation?
Brien Solis, a principal analyst at Altimeter, defines it as “the realignment or new investment in technology, business models and processes to drive value for customers and employees and more effectively compete in an ever-changing digital economy.”
So ruthless is the change that businesses that fail to shape up are gradually forced to ship out. That’s how the mighty Kodak was humbled. Once considered the undisputed king of photography and controlling a third of the world’s photographic film industry, Kodak never saw the threat posed by Instagram and advancing Smartphone cameras. At its peak, it the company managed to pull up $16 billion in revenues. However, restructuring costs and recessionary forces ate into its liquidity, forcing it to file for bankruptcy somewhere around 2012. While are still operational, they haven’t recovered to their glory since then.
Challenges of digital transformation
Transformation = shifts in how things are done. And all systems are naturally wired to resist change. There are many leaders who don’t understand the change in the context of digital transformation. Instead of leaving room for experimentation and failure, they always want to see rapid changes when they decide to replace an old system with modern technology. Then there-there are agents of status quo and cooperate process cogs who are always there to sabotage new changes. While the top executives are putting up efforts at incentivizing them to embrace change, it may just serve to hurt the balance sheets.
What are the key technologies spurring digital Transformation?
Big data and analytics – The massive amount of data being generated on a daily basis and advanced analytics is producing massive business intelligence that is revolutionizing everything from, healthcare, manufacturing, transport, and education. For example, using the power of analytics, truck manufacturer Navistar reduced the cost of managing 1,80,000 trucks from 15 cents per mile to just 3 cents per mile.
Edge Computing – the speed and volume of data produced by computers, smartphones, and IoT need real-time data processing and responses that will become highly impracticable with cloud computing, making edge computing the new disruptor.
Mobile, web applications & 5G – The more of these we have, the more the amount of data will be produced. This data needs a higher level of hyper-connectivity, prompting a shift to 5G networks.
Blockchain – Blockchain technology is increasingly becoming popular. Committed to the transaction network’s recordkeeping and security, there are high chances that this technology will be a major disruptor in the financial sector and beyond.
Artificial Intelligence – As we move towards automation, we need intelligent systems that will power analytics, robots, 3D printing and even improve the way we communicate with others. For example, using the Virtual Reality technology, you can stimulate speaking in a virtual presentation space fully packed with audience.
Why does digital transformation matter?
According to Cisco CEO chuck Robbins, 40% of Fortune 500 businesses might collapse if they don’t embrace change.
it’s a panicky situation for business. To avoid writing your businesses obituary, you have to become the disruptor of the market you operate in. You must be willing to embrace change – fast.
Who can lead in this era?
For successful execution of digital transformation strategies, there are the people that will be putting pedal to the metal:
Chief Executive Officer – Digital transformation usually start with CEO, they initiate and lead ongoing executive sponsorship that will be needed to achieve that projected change. However, the 2016 report on the digital transformation from Altimeter found that only 27% thought CEOs are leading the digital transformation.
Chief Marketing Officer – Naturally, everyone thinks that a CMO should be the natural digital transformation leader. There some truth in it. Digital transformation often starts with customer experience, which is a playing field for content marketers. Even the Altimeter survey of companies gives CMOs 34% ‘rights’ to own digital transformation.
Chief Innovation Officer – They are great at linking informational silos and use the data to steer growth in the company. but as per Altimeter Survey, only 19% of respondents had CIO are taking charge of digital transformation.
Chief Human Resource Officer – While digital transformation is all about creating a better digital experience for your customers, that change doesn’t happen in space. So, for your organization to successfully implement change, they need to empower their workforce. That means you will also need to engage your Human Resource leaders(HR) as the co-players in the change strategy.
When is the right time to step-up?
You don’t want to look back and regret why you didn’t start earlier. Many industries, especially in the media, retail and telecoms, are embracing technology. However, that uptake only averages to about 40% of the digitized. If you don’t make these statistics, you could be creating a crisis which you might discover a little too late.
Increased digital revenues – The more companies invest in evolving technologies, more profits margins will be expected. And that trend is on the rise. If data from Gartner 2016 CIO Survey is anything to go by, heads of growth should expect digital revenue to jump from 16% to 37%. That means digital business will be a significant aspect that will be giving business a competitive advantage.
Burgeoning growth in enterprise expenditure – Changing business environment means more appetite for requisite technology. According to the survey findings (Gartner), expenditure on enterprise application software is on the rise. And is expected to reach more than $201 billion in 2019.
More people embracing technology – The rate at which customers are embracing technology is only getting faster. To compete in the facing of changing business environment, you need to enhance your customer’s business environment.
When robo-bosses rule – With the advancement of artificial intelligence, future business will install robots to supervise the workers. The robo-bosses will be making decisions that only be made by humans – measuring performances, and monitoring other worker accomplishments. As business switch to smart machine managers, business opposed to changes will give have to way to newcomers.
Where does your organization stand in digital technology?
As an organization, you are always fighting not only to increase your revenue, but also to stay on top of the competition. So, how are you responding to the new business landscape to avoid causing another Kodak accident?
Is your employee performance trackable?
Employees can make or break your business. Does your HR department have a system that tracks individual performance?
How are your campaigns performing?
Are you using tools to track and measure your campaign performance throughout the sales pipeline?
Are you getting actionable insights?
You need to collect business intelligence to establish where you are excelling and where you are failing. Have you integrated any tool that gives you real-time intel about your business?
How efficient is your accounts department?
Are you still using those cocky, old-school files that keep you busy all day with little gain?
Generally what changes are you making across departments to stay relevant, evolve with time and improve operational efficiency?
How digital transformation evolved so quickly?
The digital disruption means the evolution of employee and customer behavior, expectations, and needs. To stay relevant, businesses have to “adapt or die!” To avoid getting edged out, Nike, formerly a sports apparel manufacturer, has transformed itself into fitness and lifestyle brand.
Digital transformation is not just another buzzword that comes and goes with changing technology. If you want to remain a leader in digital transformation, you have to own change. Realize hiring a funky apps boutique is not going to deliver the disruptive change you need. And so is dipping your existing workforce in change program workshop.
Over to you
What are you doing to push your business out of comfort zone and become more disruptive in your industry?