by Greg Satell, Andrea Kates and Todd McLees
It is clear that digital transformation is no longer an option, but an imperative. In fact, recent Accenture research found that, in the three years leading up to 2018, companies that led their industry in adopting the technology grew twice as fast as laggards. Today, they are growing five times faster. The risk is no longer just that of being left behind, but of being eliminated altogether.
But beware, digital transformation isn't just about technology. Success involves more than just sourcing competent suppliers and training users. These initiatives can no longer be left to the sole discretion of technology leaders and IT experts, but must involve a variety diversified of stakeholders ecosystem.
We desperately need a shift in focus. We need to do more than just implement the technology. Basic goals such as optimization of the costs and the improvement of the processes they can no longer be the ultimate goal. Leaders must inspire and empower their entire organization to boldly reimagine their work environment, customer needs, product offering and even the purpose of the company.
In our work to help some of the world's best performing organizations overcome the challenges of digital transformation, we focus on four key principles:
Digital transformation is not synonymous with innovation
The pace of digital innovation over the past few decades has been shocking to say the least. Ecommerce, social media, mobile web, and even video streaming didn't begin to have a real impact on businesses until about a decade ago. They are now significant components of the environment competitive for almost all businesses.
So it should come as no surprise that with the advanced technologies available today, such as robotic process automation, machine learning, cloud computing, and more, it's easy for leaders to get lost in all the incredible possibilities. Nevertheless, digital transformation is not about innovation. It's about getting better business results. That's why we advise our customers to start with business-related questions, such as "How could we better serve our customers through faster and more flexible technology?" or "How could we leverage artificial intelligence to improve employee experiences and retain top talent?". Once you have identified your business goals, you can work backwards to making decisions in technological matters.
For example, one of Andrea's customers in the online apparel industry sought to improve cost efficiency by reducing inventory. This simple goal led them to invest in systems that formed the basis for a much larger transformation that leveraged data analytics to reduce the costs of maintaining excess inventory in their warehouse while improving customer satisfaction. customers and profit margins.
Enlist the enthusiasts
The first thing any transformation must go through is the resistence. The status quo always has inertia on its side and never gives up its power gracefully. However, no organization is monolithic. There are always pockets of enthusiasm that can be identified and exploited. You always want to start in an area where the enthusiasts are in the majority.
For example, when Experian's CIO tried to move from traditional technology to a cloud-based architecture to offer his customers real-time access to data, he knew some within the company would not like it. However, because he started with already cloud-enthusiastic product managers, he was able to get around the initial resistance.
A Japanese bank had a similar problem with blockchain-related technologies. Senior leaders were thrilled with the possibilities. But they knew that many middle managers would see it as a distraction from more proven lines of business. So instead of focusing their efforts on existing customers, they moved to a new segment of tech-savvy young entrepreneurs who would be drawn to the novelty of the offering.
Start with a change
Each transformation is driven by a sense of vision and destiny. Change leaders can try to articulate that vision, but it is often difficult for people to internalize the potential enough to overcome their innate tendency to lose aversion. Many will need to see the idea achieve some success before they are willing to buy it.
That's why we prefer to start with a change that is a keystone that can pave the way for one major transformation. At Amarillo College in Texas, it started with a simple desire to understand why students dropped out so often. Its president, Dr. Russell Lowery-Hart, has decided to invest in data analytics for better understand the key drivers of dropout rates and get to the root of the problem. The survey results showed a range of causes, from ongoing financial challenges, housing and food insecurity, anxiety, depression and stress, access to transportation or having to be a caregiver primary, to the simple exhaustion of the availability of money.
That investment led to one vision completely new how the school could understand, serve and support its students. As a result, completion rates have increased significantly. "When systems are built to drive students to success," Lowery-Hart told me, "the whole model changes, including not just economics, but our conception of the core mission."
Likewise, Experian didn't move to the cloud all at once, but started with the implementation of internal APIs. Once the transformation team could demonstrate the business value of better access to data within the organization's boundaries, it was much easier to build a case for the full implementation of cloud technologies.
Technology at the service of the company
Technology is not an end in itself, but a means to an end. It should be at the service of the company, not the other way around. The real value of digital transformation cannot be achieved in one particular initiative or another. The ultimate goal should be a large-scale reinvention of the business that transforms the way the organization creates, delivers and captures value in the market.
Andrea's apparel customer found that improving data systems allowed them to completely change the way they thought about how to design their product line. Rather than trying to react and adapt to fashion trends in the market, they were able to proactively design the apparel based on the insights they were seeing developing with their own customers on their platform. This new business model has become a key competitive advantage, has enabled the company to take a leading position in its category and has led to double-digit revenue growth.
Experian's cloud transformation has led to Ascend, a platform that allows its customers to make data-driven credit decisions in near real time. It is now one of the company's most profitable products. For every dollar that Amarillo College invested in services and resources such as food, transportation and childcare, $ 16 in tuition was withheld, tripling completion rates. That initial success led to the funding of innovative new programs focused on democratizing skills-based education in underserved communities. Each of these transformations has been enabled by digital technology, but has had the human beings at the center.
Ultimately, the most powerful use of digital tools is not to cut costs, create efficiencies, or even move faster and with greater agility, but to ask fundamentally different questions. It is through exploration of these new ones possibility that we can solve complex problems and have a more meaningful impact on the customers, employees and communities we serve.
Greg Satell he is a consultant, author of the bestseller Cascades: How to Create a Movement that Drives Transformational Change. His previous effort, Mapping Innovation, was selected as one of the best business books of 2017.
GregSatell.com website; Twitter @DigitalTonto.
Andrea Kates is an innovation transfer expert and best-selling author Find Your Next. He has led significant transformations for organizations in the Fortune 500.
Website: suma.com; Twitter @Andrea_Kates.
Todd McLees is a partner of Innovation Outpost, where it is building an ecosystem of more than 50 higher education institutions to align their efforts with industry needs and create $ 100 million in workforce impact each year.
Follow him on Twitter @ToddMcLees.