Digital Transformation is occupying many business leader’s minds as they grapple with the increasing speed of change. Digital Transformation can mean different things to different people. In essence, it is how to best adapt to the impact of technology. The influence of digital technology inside and external to your business is therefore rapidly changing.
CEO’s face the challenge of leading organisations wanting to be relevant to their customers and profitable in uncertain times.
The tell-tale signs
Here are some tell-tale signs for the need to embrace change projects:
- Multiple clunky data systems that do not work in harmony
- Too slow at detecting changing trends from data within the business
- Not responding quickly enough to changing customer needs
- Fearing a disruptive influence that has not been predicted
- Increasing overhead costs that erode profit margins and cash flow
- Never communicating well enough internally or externally
For many CEOs the solution appears to lie in new technology. However, a clear challenge for many businesses is capturing relevant data to enable faster predictive decision making.
The influence of AI is a major opportunity as well as a concern in some sectors and whilst the digital outcomes will open new possibilities this is not without significant risks.
Common risks in Digital Transformation
Common risks we see are:
- Business strategy appears secondary to digital transformation
- CEO’s rely on multiple experts who can give conflicting advice
- Technology Vendors often lead Digital Transformation initiatives and set IT frameworks
- Promises and benefits are vague with many uncertainties
- The transition process for the organisation is not clear
- By the time implementation happens, the competitors have made further advances
- Younger teams are technically strong but often lack market experience
A lot of wasted money
Harvard Business Review has reported that about 70% of Digital Transformation initiatives fail to meet their objectives. It is estimated that in 2018 of the $1.3 trillion spent on Digital Transformation projects about $900 billion was wasted.
Digital Transformation sounds like an attractive solution. It will undoubtedly be a major part of any change process, however, it must be seen in context.
One of the most significant risks lies in the assumption that technology alone will supply the answer.
If only the business world was so simple. Experience tells us that silver bullets and buzz words seldom work.
Business First – Digital Second
The first step in embracing a Digital Transformation initiative is to have a business strategy in place.
Without a clear strategy of the short- and long-term business objectives more uncertainty will exist.
Business leaders and teams can become distracted if business goals and Digital Transformation goals are not properly aligned.
If too much delegation is given to the technology experts, they are likely to specify what they think is best for the business.
Vendors may sell what is within their knowledge and capability rather than what you really need. Vendors do not understand your overall business strategy.
Remember, technical experts maybe exceptionally good at what they do but they do not run the business.
People Transformation the Digital Transformation
Secondly, remember that despite the promise that technology will solve many business issues, people are still key.
Change will impact people, whether they are employees, customers or suppliers and therefore it is vital to predict and plan for the these changes.
Preparing an organisation for change is never easy as many people seem to instinctively resist change.
With Digital Transformation this resistance can come from the employee’s fear of being replaced. After all we hear many stories of how robots and AI will replace certain jobs.
Preparing the organisation to accept change and finding ways to reduce resistance will aid all stages of the Digital Transformation process.
Helping employees adopt a positive attitude to change is a vital part of business change management.
If you would like to know how Lindfield Partners could assist you in your change process please email brendan@lindfieldpartners.com.au or call 0401018282