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Mastering Digital Transformation
Digital transformation can lead to more revenue, higher profits, increased market share, and improved efficiency for your organization. And because such transformation initiatives involve digitizing processes and workflows, staff will be outfitted with modern tools that can help them more rapidly resolve problems, leading to improved customer satisfaction, and loyalty.
However, to get all these benefits, don’t expect to approach a digital transformation project as an IT-only effort. Although IT and the network are integral to digital transformation success, they are not the only pieces of the puzzle.
A recent Deloitte Insights report, “Pivoting to digital maturity,” identifies seven “digital pivots” -- defined as capabilities that, when developed, contribute toward a business successfully bringing about positive growth through digital transformation.
The report covers a survey from November 2018 consisting of 1,200 U.S.-based senior executives who are knowledgeable about their organization’s digital transformation efforts. The organizations surveyed employed at least 500 people and had global revenue of $250 million.
Digital maturity is attained when organizations systematically and broadly execute the digital pivots, the Deloitte authors found. Digital maturity comes when the assets and capabilities are implemented and adopted, which creates a condition where the organization will experience significant, positive business impact.
Lower-maturity organizations usually take a narrow view of digital transformation, Deloitte found. They may decide that supporting omnichannel customer interactions or adding robotic process automation for call centers is enough. Higher-maturity organizations take a broader view across the whole organization and do not limit their horizons.
Top 3 Digital Pivots
While there are seven pivots for digital transformation success, three are foundational:
Flexible and secure infrastructure -- The infrastructure design needs to balance security and privacy with the ability to respond to business changes as well as agilely support new capabilities. Considerations include evaluating a cloud infrastructure, having agile/DevOps methodologies implementing technology platforms instead of ad hoc applications, and deploying a cybersecurity strategy.
You need to look at digital transformation as a totality, not as set applications. A platform is a reusable collection of assets and capabilities working together to make it easier to produce a product or deliver a service.
IT should be the leader of this pivot and pursue it with an evangelical spirit with the goal of wide organization adoption. The Deloitte report found that more than 60% of higher-maturity organizations had implemented this pivot in at least five functions, while about 15% of lower-maturity organizations adopted this pivot.
Data mastery -- This involves data usage and analytics to discover insights that help improve efficiency and pursue new business opportunities. Data mastery is not just constructing data lakes. It’s also about structured and unstructured data. This is where artificial intelligence (AI) surfaces in organizational processes that enable decisions at the enterprise edge.
Data mastery allows the organization to make micro insights widely available. The chief data officer should identify and evaluate data assets and build or acquire (with IT support) the necessary platforms and competencies. Eighty-eight percent of higher-maturity companies reported that they attained a positive impact from their use of data, compared to lower-maturity organizations, at just 24%. IT is the driver of this pivot as well.
Talent -- Many consider the most important operational and cultural challenge organizations face is finding, training, and retaining the right talent. This reminds me of the current skills gap in cybersecurity experts; there are more jobs than people to fill them.
To reduce the talent gap, organizations have to retool training programs to focus on digital competencies. Higher-maturity organizations are about five times more likely to strongly agree that their organization excels at assisting employees develop digital skills. Human resources departments are the key in architecting this pivot, using incentives and rewards to guide talent to behave more like staff at digital-native organizations.
The Other Four Pivots
Although these remaining four digital pivots that Deloitte identified are not as foundational, they cannot be diminished or ignored:
The ecosystem engagement pivot is defined as working with external partners. This can include startups, R&D organizations, and other groups that are technology incubators. This is important to gain access to resources such as people to help obtain talent and intellectual property, as well as new technologies.
Intelligent workflows consist of balancing people processes and technology capabilities that can produce positive results. Done properly, intelligent workflows can release talent and resources for higher value projects.
Unified customer experience deals with delivering a 360-degree customer view that is available to the entire organization. This includes digital and human interactions that produce an enjoyable and satisfying experience.
Business model adaptability means that an organization has more than one business model and has an optimized revenue stream that can positively respond business and market changes.
Get the Pivots Right
There will be many challenges. One barrier could potentially be the existing business model, even if it has been successful. Properly executing the pivots requires cross-functional coordination and shared asset use that may not be supported. The Deloitte report found that a poorly suited operating model/structure was the most common challenge to digital transformation success.
Other factors to limited success are a lack of leadership support, budget, or focus. There are also the problems associated with acquiring and developing talent.
About 40% of survey respondents reported “upgrading legacy systems/processes” as one of their top three challenges to digital transformation. This is no surprise. Digital transformation projects amplify these issues when executing pivots such as intelligent workflows and unified customer experience.