The business world is constantly adapting. In just the past 10 years we have seen dramatic change driven by the rise and fall of global economies, regulatory revisions, globalization, and political upheaval just to name a few. But, one driver of change stands out more than any of the others - Digital Transformation. What makes this fountainhead of change so significant is that Digital Transformation could fundamentally alter the way ALL goods and services are delivered to customers.
Simply put – digital transformation is a certainty. The very rules about how business is performed are being rewritten right in front of us.
Hitachi Consulting has identified 6 Key Digital Imperatives that leaders should be following to make sure their organization can stay ahead of the wave of disruption that is coming our way.
Digital Leadership – Change of this nature is best driven from the top of the organization. Even though technology is often the enabler of success for these types of initiatives, the CEO and his leadership team must embrace and drive the organization down a digital path or these programs tend to get stuck in POC/POV purgatory and have limited impact. Unfortunately, only 26% of CEOs have set a clear vision for digital for their businesses. (Forrester/Odhers Berndtson, 2015)
Challenging Value Propositions & Business Models – Simply using technology to improve the overall efficiency of an existing process is not Digital Transformation. To change the landscape organizations must be willing to embrace new business models and associated processes. Trying to “pave the cow path” will not drive transformation. Many companies have a very hard time abandoning successful business models and adopting new models. Yet, history is full of stories of companies once proud and successful that quickly fell out of tune with the world around them.
Enhancing Customer Engagement – Many people would argue that the key instrument of change in the Digital Transformation is in our hands each and every day – the mobile phone. These devices provide a new platform and have allowed business to change the way they engage with their customers at every step in the value stream. Companies at the front of the wave are constantly trying to identify different/better ways to engage their customers.
Improving the Operational Environment – Digital Transformation is about much more than just customer engagement. It is about leveraging new technologies such as AI, machine learning, robotics, 3D Printing and AR/VR to drive dramatic improvements in throughput, efficiency and quality. These solutions can fundamentally change the way companies make and distribute their products. Winners are constantly trying to leverage technology to drive different outcomes.
Evolving Core IT architecture – The critical factor in enabling Digital Transformations is technology. Companies must evolve their core IT architectures beyond the existing transaction level ERP applications and create digital services and revenue streams that provide the appropriate information back to the key decision makers and even monetize these new assets.
Creating and cultivating a culture that encourages a digital market – these changes typically cannot be implemented with the existing work forces – companies must retool their work forces and interject news skillsets and capabilities into the organization to help think outside the box. Finding, hiring and developing these resources requires a different mindset and support systems as well.
Digital Transformation is here to stay – you can bet on it. In every single business transformation there are winners and losers. While we can’t predict exactly how it will play out across the board you should be asking yourself – what steps am I going to take to harness the power of this transformation for myself and my organization?