Digital transformation is one of the most hotly-debated topics for businesses of all shapes and sizes across a wide variety of industries. Everyone seems to be talking about it, but there is a common perception that the phrase itself has limited potential to reinvent and reinvigorate businesses.
In the opinion of some, digital transformation is really nothing more than simply getting rid of outdated equipment and adopting new technologies in their place — and to some degree this is true. Some businesses might see digital transformation as an opportunity to implement Office 365 to create a more dynamic workforce, for example, while others might decide to move their servers off-premise and locate their data in the cloud.
But this would do the phrase a disservice. Digital transformation is about much more than a simple technological upgrade: it is a comprehensive change in attitude that enables businesses to remain relevant and competitive by keeping up with the fast-changing industry landscape, while also helping to retain existing customers and attract new ones. While the adoption of new technology of course forms part of this, it also involves a significant cultural shift which will have an impact on everyone within the workplace.
It is not entirely surprising that so many hold a limited view on what digital transformation is. There are plenty of emerging technologies — from artificial intelligence (AI) and machine learning to big data and the Internet of Things (IoT) — that are constantly being touted as the next big thing, and so it is easy to become overwhelmed and distracted by all of this public discourse and eventually develop a blinkered view of the potential for transformation.
Instead of focusing solely on technology, organizations need to take a step back and adopt a more holistic approach to digital transformation that inspires a genuine re-engineering of their business.
Specifically, this new approach requires reviewing and updated three areas in particular. The first is technology, commercial and business strategies, the second is the customer engagement approach and finally — and perhaps most importantly — is the organizational culture, with an emphasis on the importance of digital transformation being driven from the top down.
If digital transformation at this scale is to prove successful, it requires strong leadership, and there are several tips that can help to successfully achieve this change.
Focus on the bigger picture
As with so many hot topics in IT, it can be all too easy to get lost in the sea of buzzwords that surrounds the digital transformation process. While of course there will be a certain amount of jargon that organizations must contend with, the process is much more high-level than some of us might first imagine: it effectively involves rebuilding your business to adapt to the digital landscape, while interacting with customers in a modern, innovative way.
Successful digital transformation cannot be achieved by simply moving to the cloud or embracing new technologies for the sake of it. Rather, it’s about enabling both your business and your customers to be a part of the wider paradigm shift, and to benefit from the changing industry around them. Technology will always form the backbone of this, but it should never be the sole focus of digital transformation initiatives.
In order to unlock the value of technology and have it form part of the modus operandi of your business, it’s imperative to get the culture and change program right to begin with. However, many currently struggle with this because they don’t realize the full extent of the changes required. If the human elements of change aren’t addressed, then successful digital transformation is unlikely to happen.
This wider shift in approach involves rejigging all departments and areas within the business accordingly. While the specifics of this will vary depending on the business, it often involves reconsidering and redeveloping the sales approach, retraining sales staff, adjusting to new revenue and remuneration models and ensuring compliance.
Once this cultural and organizational shift has been finalized, businesses can then focus on the inevitable: technology.
Looking ahead to 2018 and beyond, there are likely to be three main technology components of transformation to focus on: hybrid, security and compliance, and data transformation. These are all particularly hot topics of the moment, and will play a big part in defining the majority of digital transformations moving forward.
Consider your own transformation path
With this in mind, organizations must ask themselves three questions that will help them to further guide their own digital transformation journeys…
- What is the compelling business reason for digital transformation? — As previously discussed, this involves taking a step back and defining the reason why transformation is necessary in the first place. For example, an independent software vendor might need to do so to start selling more modern, cloud-based and SaaS offerings.
- What is the technology challenge that the organization must comply with? — In other words, what issues needs to be overcome? To continue with the example of an ISV, they need to be able to deliver these new cloud and SaaS offerings to clients while remaining compliant with new regulatory changes, such as the General Data Protection Regulation (GDPR) and revised Payment Service Directive (PSD2).
- What technical solution can be put in place to solve it? — This final stage is self-explanatory. For the compliance-conscious ISV, they might consider adopting a modern, hybrid technology solution that is suitable for cloud consumption, while also maintaining compliance. It also allows them to take the data they use regularly, consolidate it and make it useful in a modern application sense.
Many people see digital transformation as nothing more than a buzzword; a catch-all umbrella term championed by the IT press to describe the adoption of new technologies. But in reality, it is a total overhaul of a business to accommodate the changing needs and demands of consumers, employees and the wider business landscape. Yes, technology forms a large part of this change, but it is also driven by cultural and organizational changes that makes each digital transformation journey totally unique.
Stuart Nielsen-Marsh, Microsoft Cloud Strategy Director at Pulsant