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Why Digital Transformation Needs To Stay On The CEO Agenda

Tuesday 19 July, 2022

Most executives understand that nearly every part of their organisation is either dependent on, or significantly enhanced by, the digital technologies employed: whether it is to maintain strategic advantages, enable operational efficiencies or provide the information that helps shape future decisions.

That being said, many organisations are challenged by digital transformation in several ways, and the purpose of this article is to highlight some of these and offer guidance on how organisations can be influenced to deliver a different outcome.

But before we consider how an individual can influence their organisations digital transformation journey, let’s be clear on what we consider the phrase “digital transformation” to mean, as there are varying opinions on this topic. Simply put it is business change that requires IT enablement, coupled with such things as organisational change, operating model, supply ecosystem, governance, and potentially revenue stream change, which combined are far more complex and often outweigh the effort of IT enablement. The second point to emphasise in this respect is that it is continually evolving journey, it will have milestones and deliverables along the way, but it will continue all the while the business is changing, which is why the topic of digital transformation needs to be properly framed and lead prior to its start.

Acknowledging the work that has gone before - Digital transformation has been with us for some time as a concept, many organisations will have done something in this space, some will feel they did not achieve the desired outcome, some may even feel they have completed their transformation. Any of these will create a barrier to progress and overcoming reticence based on these factors needs to be firmly anchored in business value, opportunities of further transformation and maintaining competitive advantage.

Managing the hype - There will be lots of talk of doing digital, rebranding projects as digital and claiming we  are already digital. Whilst not exclusively, these are normally just words for public consumption (or budget appropriation) and do not reflect the delivery of genuine transformational value, as the objective of digital transformation like any investment is the delivery of true business value. 

It's not just a project - A lot of organisations consider digital transformation a project they must complete (not that projects don't play their part where appropriate) or a "once and done" activity that they undertake and hopefully declare success on. This is not the case, to truly deliver value, digital transformation needs to be embedded in the organisation’s culture with a significant and consistent leadership message that empowers the organisation to think and act in a transformative way, embedding continuous digitalisation.

 

Delivering timely value - Most executives and leaders will understand about delivering value, it's after all how most organisations stay in business, but few organisations truly understand how it’s delivered across every aspect of their organisation. An integrated view of how value  is created across an organisation will make all the difference when it comes to digital transformation, between knowing what to do to improve value delivery and thinking you know what to do. This is such a common issue with organisations, that if we were asked to identify the one thing that should be done, this would be it.

Competing transformation plans and priorities - It's very easy for organisations to fall into the trap of having multiple transformation roadmaps, each division setting out its vision and implementing the projects they think will deliver value, with little or no alignment with other parts of the business. As stated, this is a trap, and one that senior leadership need to work hard not to fall into, normally requiring a significant cultural shift to place the organisation into a collaborative mindset, develop a shared set of priorities and maintain an enterprise-wide perspective.

Rushing to deliver something - You will certainly have immediate and obvious pain points in your organisation, and whilst we are not advocating that you do nothing about these, be careful that you don't let the "fire fighters" in your organisation over engineer the remediation of these. Digital transformation is about delivering value, this needs thought and consideration to make sure you are identifying the right thing to do in the longer term, which then provides the context for how to manage immediate issues.

It's not all about new business - Whilst developing a new digital business can come with great acclaim and applause, organisations need to consider their existing businesses equally when thinking about digital transformation, as significant value can also be derived from transforming existing business processes.

Starting in the right place - There is no right answer on where to start realising your digital transformation.  Some of the best practices are mentioned above, but the primary focus should be delivering significant value to the business and avoiding low hanging fruit just because it’s quick and easy. So, consider activities expected to give a good return on investment and deliver significant top or bottom-line growth, while focusing on a particular area of the business where the priorities have been agreed. If you get this right, you can demonstrate benefits, build significant momentum for change, and make progress with the cultural shift.

Embrace the disruption positively and proactively – to deliver transformational benefit there will inevitably be disruption, this process and organisation disruption shouldn’t be feared but does need to be managed with proactive communication and care whilst maintaining a business wide objective view to benefits.

Getting the measurements right - This is always a challenge to get right, since "what gets measured gets done" so ensuring you drive the right behaviours the metrics need careful consideration. Obviously, there will be some financial metrics, since you can't avoid these, but you need to look wider, as your objective is delivering and sustaining improvements to business value, and as mentioned before, there are cultural and organisational aspects to this that need to the power of measurement to be applied as much as the financial aspects.

Managing the transformation – This  splits broadly into two, the high-level leadership keeping digital transformation and its guiding principles front and centre with the policy makers, and the impacts and consequences of the transformation activities on the people within your organisation and the ecosystems within which you operate. This runs across such areas as organisational change, talent management, operating model change and provider change, all of which will need to be planned for.

• Avoiding the stop start of transformation activities – any transformation will naturally have considerable internal & external dependencies, with the inevitable complexity challenges, it’s important to proactively manage these elements to assure the appropriate pace, rhythm, and momentum.

Evolution journey – when delivering transformation over the duration there could be multiple ways of working, processes, and solutions, all of which will be a challenge to the business. Therefore, managing the evolutions between past, current and future is key to success.

In summary, digital transformation is IT-enabled business change, co-ordinated and lead from the top, communicated to enable everyone to understand its impact and how they can play a part in its delivery. For an organisation that is looking to start its digital transformation journey or indeed reassess what is currently underway, this article identifies a number of things to consider. However, for most organisations this is not something they can easily manage on their own, so it is important to find the right partner who can bring digital transformation best practices and experiences from other organisations to deliver the right approach with the correct mix of flexibility, challenge & leadership.

Find out more about Coeus Consulting's services here.