The recent International Customer Experience Awards in Amsterdam was a reassuring reminder of the quality of thinking emerging in the digital transformation space.
As a judge in the Digital Strategy category, I had the privilege of presiding beside fellow judges, and was impressed by the level of enthusiasm and progressive vision displayed by the finalists, such as DBS Bank, Saudi Telecom Company, T-Mobile Austria, and Multichoice, among others.
Most heartening, though, was the evident understanding of digital transformation as an enterprise-wide process, rather than the siloed approaches that are driving most digital transformation initiatives in today’s markets.
But not all companies have this same understanding of digital transformation.
In fact, many companies report disappointing results, or outright failure, when implementing digital change initiatives. Often this is dropped at the CIO’s feet but, perhaps ironically, this is precisely why so few digital transformation programs succeed.
Growth and development require unified purpose and operation – in an organisation this means collaboration and alignment across all business areas. The CIO has a limited remit and cannot guarantee transformative implementation throughout the company – this requires enterprise-wide commitment. Seeing digital transformation as the CIO’s exclusive responsibility represents a misunderstanding of transformation itself; any initiative emerging from this perspective is going to be piecemeal at best.
Piecemeal application of digital transformation principles will only yield piecemeal results; the business needs to have digital at its core. According to a global study by Harvard Business Review, 53 percent of enterprises regard silo mentality as one of the leading causes of failure in fostering sustainable change.
Digitization is routinely seen as a way to optimise the operations of business areas like IT or Marketing, solve discrete business problems with standalone technologies, and as a way to plump up current service offerings. The customer satisfaction may improve but the business does not gain the market shift it is looking for.
Why? Because isolated or thinly-integrated digitisation projects are being confused with transformation. Evolution does not operate in isolation. Silos exist in direct conflict with this natural law and stymie any attempt at sustainable transformation. More specifically though, the alignment we are speaking about is not just conscious – it is also unconscious, written into the fabric of the organisation’s DNA, as it needs to be with any company implementing a digital transformation program. Mature digital businesses are integrating digital technologies into the way their businesses work, not simply what their businesses do.
Without this shift in mindset, the odds are stacked against the CIO. In research by Vanson Bourne on behalf of HCL, only 10 percent of CIOs say that they will be able to fully deploy their digital change strategies, with 46 percent admitting that digital transformation does not cover the whole of the organisation. Of course, this is partly attributed to poor strategy formulation and execution, but the report’s conclusions strongly suggest that the fault is systemic, not individual:
The problem is that, in many cases, these are isolated initiatives, often undertaken in response to narrowly defined issues and existing apart from any comprehensive digital strategy. To transform business processes in the manner that digital transformation demands, organisations first need to gain complete end-to-end visibility into the processes, the systems that support them and the people who make them run.
And this is what set our finalists in the recent awards apart. They viewed digital transformation as enterprise-wide.
Enterprise-wide digital transformation requires more than maximising digital channels and bundling digital products with the main product offer; it demands a genomic alteration of the company’s way of being. For incumbent businesses in mature markets the challenges in this respect are greater than those facing startups, and a proven framework is critical to ensure the gradual development towards a more cohesive digital engagement.
A well-planned digital transformation program works on the primary business and digital adjacency growth areas concurrently, creating a system that funds digitisation through cash cow operations while promoting long-term change as the business embeds digital DNA.
For more information about our insight on digital transformation, download Synergy Consulting Group’s White Paper: The Digital Transformation Imperative.