Digital transformation has been the ‘buzzword du jour’ across multiple sectors and industries over the last few years, with countless examples of success and failures in equal measure. But why are some so successful while others are destined to take pride of place on the digital transformation Hall of Shame? Is there a blueprint to digital transformation success or is it just a case of potluck? Aidan Dunphy finds out
There is no denying that recent global events have changed the digital landscape forever. The Covid-19 pandemic has forced many previously reluctant organisations to take the plunge and innovate in ways they never thought possible just a few years ago. Jobs which were traditionally ‘chained to the desk’ were suddenly able to be conducted remotely. Services or processes which previously could only ever be undertaken in a face-to-face setting are now occurring effortlessly via the cloud.
Digital transformation projects which had been gathering dust on the ‘let’s save this for a rainy day’ shelf were hastily gathered together and placed firmly at the top of the business critical list. Funding was made available to help businesses facilitate the shift to remote working, and the clock was ticking to ensure this was all done as quickly as possible to limit the losses faced. It’s fair to say the conditions haven’t been optimal for well-considered decision making, and the pressure has been immense.
Indications are that this has certainly been the case for a significant number of organisations. A recent survey by Software AG revealed that 97% of IT directors surveyed said that their company went through some kind of digital transformation efforts in 2020. The same number said that they expected that investment to continue in 2021.
While the vast majority of those surveyed believe that technology will help them to tackle future challenges, there were mixed views when it came to issues such as whether to prioritise product and process or focus on customer support and service improvements. There was also uncertainty over who the biggest beneficiary of digital investments has been (or will be in the future), with customers, employees and ‘the business’ all cited as top priorities.
Covid-19 has undoubtedly added further pressure to organisations who, often through a case of FOMO (fear of missing out) have been desperately scrambling to innovate and utilise technology in an attempt to improve processes, experiences and contribute to the bottom line. But one of the key challenges faced by businesses across the globe has been to determine which projects will add value to their customers in a way that is profitable to the business. It has to deliver generously in both areas, otherwise it’s simply doomed for disaster.
Considering that up to 84% of digital transformation projects fail to deliver their expected benefits, it’s clear that whilst there is much to gain by getting it right, there can often be even more to lose by getting it wrong. Many companies have famously failed at digital transformation (see Ford’s 2014 attempted digital transformation venture Ford Smart Mobility) and whilst this did not mark the end of the company, it did cost a significant amount of time, resources, money and credibility.
A recipe for disaster?
Most digital transformation projects are destined for failure because it is wrongly assumed that the digital transformation itself will deliver the desired outcome. In many cases, it is an afterthought, or a ‘bolt-on’, to an existing and usually outdated system. The business then sits back with bated breath, hoping that a quick sprinkling of fairy dust will help solve a major issue that’s likely been a thorn in the side of the business for quite some time.
Reality check, digital transformation is rarely the solution. I prefer to think of it as an ‘enabler’, something which helps your business to achieve the best possible experience and outcomes for your customers. If you have one or more systems or processes that have fallen so far behind the curve that they are costing you time and money, are no longer serving your overall strategy or are no longer serving your customer as well as your competitors, then it’s time to go back to the drawing board. It’s essential to understand what is required in terms of delivering customer value first, so that the right digital transformation projects can be selected to help achieve the desired goal.
Forget the tech, focus on the customer
You must put the customer at the heart of your strategy if you want to stand any chance of creating a solution that truly meets their wants and needs. This involves stripping everything back and asking fundamental questions about what your customers actually want from you.
The next step is to deep dive into your key markets. This could include ensuring that you are recruiting people who are in your target market (insider info is a major value add). Detailed UX research is essential, as is the need to take your UX design seriously. Too often businesses are blinded by shiny new products or services but appear to neglect how the overall design actually impacts the user experience.
It can also be useful to look to fringe technologies and solutions for inspiration. Adopting best practice from other industries and sectors can help to encourage ‘out of the box thinking’ and can lead to innovative ideas which your competitors are yet to fathom.
Last but most definitely not least, it’s essential to embrace innovation rather than simply paying lip service. Investing meaningfully in the medium and long term can be particularly challenging for more mature companies that are facing declining growth and are ‘stagnating’. Solid and sustainable long-term growth is only achieved when the needs of the existing business are combined with the room to explore opportunities for future growth. I’d recommend taking a look at McKinsey’s Three Horizons of Growth if you’re interested in reading up on this point further. It provides some useful insight into this specific challenge.
A question of value
Apple founder Steve Jobs once famously said: ‘You have to start with the customer experience and work back to the technology, not the other way around.’
It’s not about how you make things faster, but how you generate more value. Customer value really is king. True digital transformation comes from a combination of modern product management techniques: customer research and collaboration, agile development, data-driven strategy, empowered delivery teams, and flat(ter) management structures, all working together to help you reach your desired outcome.
Ultimately, businesses looking to succeed with digital transformation need to avoid focusing entirely on the tech. The winners will be those organisations that recognise that what used to be important is no longer relevant. What matters now is incentivising anything that makes your customers fall in love with your products, if you can master that then the future will certainly be a bright and prosperous one.
Aidan Dunphy is founder and Principal Consultant at Samepage, a digital consultancy focused on transforming business through the strategic deployment of the right digital tools. For more information visit https://samepage.digital