The Three Dimensions Of Digital Transformation
The fourth industrial revolution or the industry 4.0 has been compelling the enterprises to rethink, reimagine and reinvent themselves. Digital disruption is the cornerstone of Industry 4.0. It’s most unique aspect is the pace that’s never been seen before. This time around the customers of an enterprise, both internal and external are demanding much more, much faster with the bar being set by industry leaders like Apple, Google and Amazon. Fortunately, the design principles of the industry 4.0 like interoperability, information transparency, technical assistance and decentralized decisions remain relevant despite technology being continuously changing.
The Digital disruption is an opportunity to transform. Technology has always been used by business to improve efficiency, customer delight and often to reinvent itself. This stands true from the wheel to steam engine to digital technologies today. The question has never been “if” to use the technology but “how” to use the technology. Those who asked “if” perished in oblivion. The challenge involved with “how” aspect of digital technology comes from the rapid pace of technology evolution and also its disruptive impact on the existing business processes that forces business leaders to think their business a new.The paradoxical situation a business leader faces is that the very unique business process that he created, that helped build and sustain a business so far need to be challenged, enhanced or at times completely abandoned. Nevertheless, a true business leader knows that business needs to change with change in needs and wants of the market.
A complete change in the appearance or character of something or someone is transformation. For me the digital transformation of an enterprise is a complete change in the Process, Product or service, Price, Place, Promotion, People, Physical /virtual evidence and productivity/ quality by using digital technologies. Such transformation may be a gradual journey to the envisaged target state for a company over a defined planning period.
Evidently neither the digital transformation planning nor the journey is easy. Availability of numerous choices leads to decision impairment and delays. Top up the numerous choices with a lack of clarity on the needs and priorities. This becomes a sure shot recipe for chaos. This is the state that many CIOs and business leaders find themselves in. As if, what to transform, how much to transform was not challenging enough, the numerous choice of technologies and platforms,with many more coming and beingin different stage of evolution make sure that the CIO’s decision making is anything but simple. Not to mentions that while the CIOs often take a technology-first approach and CMOs may be taking a customer experience first approach, as part of an enterprise’s digital journey.
What could be a simple and common sense approach that may guide one through the chaos. Back to basics, think of intelligently breaking the big problem in small pieces and then solving the smaller ones relatively easily. The Digital transformation journey may be looked on three dimensions with each dimension having three states.
These considerations will lead to possible 27 areas of consideration. Depending upon business some of these 3X3X3 combinations may not be relevant and hence may be dropped from solution set after prudent consideration and elimination.
Any business with have three set of people considerations namely customers, employees and suppliers. Operationally the enterprise may be divided into front end, mid office and back end operations. Digital transformation for an enterprise to envisaged above may be powered by business process transformation, use of new packages or platforms or use of simple new technologies. While use of package/platform e.g. SAP HANA S4C or Oracle or SFDC etc. are easy to envisage just like basic technology e.g. mobility, social media, cloud etc., the process needs some explanation. An enterprise may choose to be anywhere on the business process transformation spectrum, from just digitizing its existing business processes to going totally digital native.
Let’s look at some of these consideration blocks. A customer may have expectation from an enterprise’s front end operations. Let’s consider a case where a banking customer who has an issue with his loans payment uses twitter to share his complaint or disappointment. The bank’s front end should get to know about the tweet working with its mid and backend and comes out with a resolution. The customer needs to be contacted and suitably handled using suitable technology channel. The above front, mid and back office intelligence comes from altered processes, use of right platform (CRM, ERP, AI and ML) and right channel technology to connect with customer. In a similar way all 27 combinations may be considered for their usefulness. Based upon these considerations right priorities may be assigned to projects and also right technology selection decision may be made.
Having written all the above, let us be clear that digital transformation in reality has less to do with technology and lot more to do with age old change management. The digital technology implementation is deterministic but the organizational change management needs a lot more planning and re-planning, humane touch and exemplary leadership.