Digital transformation is in the eye of the beholder
Digital transformation is at the top of the list for many in 2020. While definitions vary, most agree that digital transformation involves using technology to change business processes and practices. But what does that actually mean? In conversations with IT, CX, and HCM professionals across industries and geographies, I’ve found that digital transformation, much like beauty, is in the eye of the beholder.
Although digital transformation is often most closely associated with customer experience and commerce initiatives, there’s just as much opportunity for transformation in HCM and supply chain. Obviously, one’s view of digital transformation depends on existing systems and technical debt, skills and resources, vendor partners, and several other technology factors. However, ultimately the scale, steps, and relative success of digital transformation depend heavily on four other elements:
Appetite for risk. The more comfortable leadership is with taking on big changes – and, perhaps more importantly, with delegating risk management – the greater likelihood a digital transformation can be executed. Appetite for risk is not just about top or middle management, but all the way down to the individuals impacted. I’ve found appetite for risk is often directly related to the relative success or failure of recent big IT projects, management’s comfort level with decentralized decision making and accountability, and the depth and quality of relationships with key IT partners.
Cultural patience. Beyond taking on the risk, organizations must balance the desire for rapid results against the time needed to drive real change. The right pace depends on a few considerations including geography, industry, capitalization, and history – the composite of which is cultural patience. Learning about a company’s committee and board structures, RFP and proposal processes, and access to and reliance on real-time data for decision making will tell you a lot about its relative cultural patience, and the realistic pace of its timeline for any transformation.
Product temporality. A manufacturer of a product that has slowly evolved over time has a very different view of the meaning of digital transformation than one with a short or relatively new product lifecycle. Product temporality impacts the pace and success of digital transformation not just because of the longevity or market experience with the products themselves. The longer a product has been around with relatively minor changes, the more ingrained and culture-bound the processes – and people – around development, sales, and servicing of those products have become.
Workforce tenure. Ultimately, digital transformation comes down to people and how likely they are to be willing to embrace change and adopt new technologies and processes. A key indicator of the challenges to effective transformation is workforce tenure: not just the age of the workforce, but their relative years of experience in the same role, cross-departmental and regional mobility, and activity in extra-role employee groups and cross-functional teams. Those with a more flexible perspective beyond their department and their way of doing things can better contribute to meaningful digital transformation.
When you look in the mirror, what do you see? There’s no one-size-fits-all roadmap for digital transformation. A realistic view of where your organization sits on the continuum for risk, cultural patience, product temporality, and workforce tenure can help you set the right cadence, focus, and investments to make your 2020 digital transformation goals achievable reality.