How to maximise value from your digital transformation initiatives

Digital transformations are complex and require organisations to change their strategy, ways of working, organisation culture and much more. Digital transformations are different from digitisation/automation initiatives where the focus is limited to a new technology roll-out or a specific process automation. Digital transformation affects multiple business units, processes, and people and hence, leadership alignment is of utmost importance for the success of such a program. Also, as these programs have an enterprise-wide impact, a holistic view of the organisation support required, customer/partner involvement in program definition and an agile approach to the transformation can increase the probability of success multi-fold.

Digital means different things to different people in an organisation. To a CFO, it may mean real-time visibility into a company’s finances, to a CMO, it may mean knowing the effectiveness of marketing spend, to a CHRO, it may mean knowing your people supply chain and so on. Hence, it is very critical to define the right measurement KPIs to calculate the value delivered by digital initiatives. Also, each organisation has a different digital ambition, maturity and risk appetite and hence a ‘one-size-fits-all’ approach is not suitable for such initiatives.

To maximise the value from complex digital transformation initiatives, organisations should focus on 4 actionable E’s: Educate, Engage Empower and Evaluate.

Educate:

Technology is changing rapidly, and businesses are not only threatened by traditional competitors adapting to the change faster but by value disruptors coming in from outside the industry and creating new segments. In the current environment, continuous learning frameworks need renewed focus. Organisations must invest in digital awareness for leaders and employees to enable a homogenous understanding of technology, create a higher ability to detect threats and build competencies to execute complex programs.

Building a ‘collaborative digital vision’ helps in creating a consensus across the enterprise and gets all stakeholders equally invested in the desired future state. Creating a path that excites people while giving confidence in an organisation’s execution abilities is critical to the success of digital programs. Designing custom digital learning initiatives including digital coaching for the leadership, program and stakeholder management for mid-management and hard technical skills for the execution team can help build the right competencies within the organisation.

Engage:

Engaging diverse stakeholders (e.g., customers, partners, employees, regulators, industry SMEs etc.) to understand the current digital maturity and define the future state helps in creating a holistic program scope. Understanding customer expectations, competition roadmap and regulatory/policy framework help build a comprehensive agenda for digital transformation.

Continuous stakeholder engagement helps in tweaking organisation strategy to include the changing environment, evaluate ongoing initiatives for current priorities and align organisation efforts towards revised goals. An ongoing voice of customer program, a periodic competitive benchmarking and an objective internal capability assessment can help build an excellent engagement framework

Empower:

Organisation empowerment is critical to any digital transformation success. Any large transformation program is high risk and organisations must have the risk-taking ability to challenge the status quo and the trust that wholehearted support will be available if something goes wrong. The mindset of ‘always has been done in this way’ can only be challenged by empowered employees. Organisations must empower their employees and promote a culture of experimentation. ‘Build-fast-fail-faster’ approach and transparent fact-based communication help build an empowered, trusting agile organisation.

Evaluate:

Digital transformation programs have diversified goals and quantifying all of them may not be always possible. For example, fending off competitors or perceived risk of inaction are valid drivers for a digital transformation program, but it is difficult to have objective metrics for such drivers. Also, as different people have different definitions of digital, it becomes even more challenging to get a consensus on success metrics.

Defining the right measurement KPIs is critical to justifying the investment in any transformation program. A simple exercise of writing vision and top 5 KPIs from an individual leader’s perspective will go a long way in generating consensus and creating a sense of ownership towards delivering the program. As the transformation program progresses, contextualising the progress, risks, issues and dependencies for the agreed KPIs will help the organisation see the total value being delivered and not focus only on easily quantifiable metrics

Digital Transformations are unchartered territories for many organisations. Leadership must avoid analysis-paralysis by engaging customers/partners in collaborative value definition, defining clear goals & metrics and adopting an agile approach for digitalisation to be effective, sustainable and value accretive. Organisations must empower the broader teams, promote a culture of risk-taking and encourage the teams to take on the new challenges as learning and growth opportunities.

Source: Express Computer