Consultancy
The 4 key areas for the digital transformation of your business:
Digital transformation requires talent, for this you must assemble the right team of people in four domains:
1- Technology
2- Data
3- Process people
4- Capacity for organizational change.
Over the years we have participated, advised and studied many cases of digital transformations. In doing so, we gained insight into how difficult true digital transformation really is and what it takes to be successful.
Digital transformation is not for the faint of heart; The unfortunate reality is that to date, many of those efforts, like transformation programs in general, have failed.
The key to succeeding in this requires bringing together and coordinating with a strong leader a variety of efforts. Poor performance in any of the four interrelated domains (technology, data, processes, or organizational change capability) can sink an otherwise well-conceived transformation.
The really important things range from creating and communicating a compelling vision, to developing a plan and adjusting it on the fly, to the details, and all this always in interaction with the people on your team.
Let's explore the talent needed in each of the four domains.
Technology
From the Internet of Things to blockchain, data lakes and artificial intelligence, the raw potential of emerging technologies is staggering.
And while many of these are becoming easier to use, understanding how a particular technology contributes to the transformation opportunity, tailoring that technology to specific business needs, and integrating with existing systems is extremely complex.
To complicate matters, most companies have enormous technical debt: legacy, embedded technologies that are difficult to change
You can only solve these problems with people who have depth and breadth of technological knowledge, and the ability to work hand-in-hand with your business team.
As challenging as these difficulties are, an even more critical problem is that many business people have lost faith in their IT department's ability to drive major changes, since many IT functions are primarily focused on keeping hardware and software running.
Digital transformation must incorporate institutional IT, to regain trust. This means that technicians must provide and demonstrate business value with each technological innovation. Therefore, leaders in the technological domain must be great communicators and have the strategic sense to make technological decisions that balance innovation and management of technical debt.
Data
In many companies today, most data is not up to basic standards, and the rigors of transformation require much better analysis and data quality.
Transformation almost certainly involves understanding new types of unstructured data (for example: an image of car damage provided by the driver), massive amounts of data external to your company, leveraging proprietary data and integrating everything, while eliminating huge amounts of data, which has never been (and never will be) used.
Data presents an interesting paradox: most companies know that data is important and know that the quality is poor, but they waste enormous resources by not establishing the right roles and responsibilities. They often blame their IT team for all these failures.
As with technology, you need talent with great breadth and depth in data. Even more important is the ability to convince large numbers of people on the front lines of organizations to take on new roles as customers and data creators.
Thinking about and communicating the data they need now and the data they will need after the transformation means helping frontline workers improve their own work processes and tasks so they create data correctly.
Process
Transformation requires an end-to-end mindset, a rethinking of ways to meet customer needs, a seamless connection of work activities, and the ability to manage across silos in the future.
A process orientation fits naturally with these needs. But many have found process management – horizontally, across silos, and customer-centric – difficult to reconcile with traditional hierarchical thinking. As a result, this powerful concept has languished. Without it, transformation is reduced to a series of incremental improvements, important and useful, but not truly transformative.
When developing talent in this process domain, look for the ability to align silos in the direction of the customer and improve existing processes, design new ones, with a strategic sense, to know when incremental process improvement is enough and when radical reengineering is necessary.
Capacity for Organizational Change
In this domain we include leadership, teamwork, courage, emotional intelligence and other elements of change management.
Much has been written about this domain over the years, so we won't repeat it here, but it is worth noting that anyone responsible for digital transformation must be well versed in the area.
While we don't have firm evidence to support this, it appears that those who gravitate towards technology, data and processes are less likely to embrace the human side of change.
Of course, in our previous recommendations, we have urged leaders to seek out those with excellent social skills.
If you can't find them, a good alternative is to put some people who can work on both sides, articulating the technical and communication aspects in the transformation team.
Summing up
Until now, we have talked about the domains of technology, data, processes and organizational change capacity, as if they existed in isolation, and of course this is not the case.
Rather, they are part of a larger whole. Technology is the engine of digital transformation, data is the fuel, process is the guiding system, and the capacity for organizational change is the landing gear. You need them all, and they must work very well together.
Consider the “our systems don't talk” problem, which plagues most companies and is anathema to digital transformation. But what domain does it belong to?
As described above, it is a technological problem, but it also generates enormous inefficiencies in the processes. However, it stems from the lack of a robust data architecture and can involve policy and organizational structure issues that are difficult to change.
One could argue that any domain should take the lead. But the best solution involves all four of them working together.
Without a deep understanding of each domain, it is difficult for almost all business leaders to see the full potential of digital transformation, it is a contributing factor to many failed digital transformations. But, of course, no individual possesses all the necessary knowledge and ability. Hence our call to gather talent in each area.
Finally, work on technology, data and processes must proceed in an appropriate sequence.
- It is generally accepted that there is no point in automating a process that does not work, so in many cases, process improvement or reengineering must come first.
- On the other hand, some transformations will have large doses of artificial intelligence. Since bad data hinders the development and deployment of good AI models, in these cases, working on the data must come first.
- Start with your end goals, then develop the sequence of steps that best suits you to achieve them.
The most important thing is that the talent possesses the four types of experience we have described and has had previous success in creating and executing any form of technology-driven transformation.
Success in digital transformation is not based only on the efficiency of technology, but lies in the skill and adaptability of the people who manage it, within your company as a team and outside, with the user experience of your clients.
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