The term digital transformation is getting a lot of airplay, but for businesses on their digital transformation journey, it is much more than just a passing trend. In a recent survey of over 1,600 business decision makers, 86 per cent saw their company’s ability to transform as being crucial for its success in the future.
However, digital transformation isn’t achieved simply by implementing a new technology or turning manual, paper-based process into automated, digitalised ones. Successful digital transformation is complex and involves aligning technology with business functions, integrating new technologies with legacy technologies, and delivering innovation in places that are uncomfortable with risk.
Organisations can often be misguided by their belief in common digital transformation myths, making it difficult to achieve meaningful improvements. Dispelling these myths and gaining a clear view of what’s required for digital transformation is essential for success.
Seven common myths impeding digital transformation are:
1. The idea is everything: Innovation processes often focus on ideas generation. However, generating the business model, executing and scaling the solution are far more important and difficult.
2. Only digital natives can innovate: Most companies rely on legacy technology that can’t easily be switched off. However, that doesn’t mean transformation is impossible; it only means the business must review its technology and consider what incremental changes can support transformation.
3. The more data, the better: Different types of data require different types of technology to turn them into value. This requires business knowledge and domain expertise. Organisations can then apply learning techniques to the data to recognise new patterns. In this process, it’s not the amount of data that matters but the relevance and quality of that data, as well as the business actions the organisation takes based on the insights delivered.
4. Digital transformation requires buzzword technologies and cloud deployments: While many think digital transformation must involve artificial intelligence (AI), blockchain or big data, some of the most successful transformations simply find new uses for existing technology such as enterprise resource planning (ERP) systems, or create value by joining systems together. It’s not necessarily essential to invest in emerging technologies for transformation.
5. The CIO is irrelevant to digital transformation: While business leadership is highly important to digital transformation, the role of the CIO remains critical. This is especially true when it comes to identifying and orchestrating the technologies to support the transformation journey.
6. Digital will replace the physical: Online activities continue to expand and increase, but there is still strong demand for physical interfaces such as stores. For example, online and self-check-in helps improve traffic flow in increasingly busy airports, leading to a merging of the digital and physical.
7. Not all industries are affected: While most high-profile digital transformations have happened in the consumer world, all industries can benefit.
With data driving transformation and value being created around customers and consumers, companies that aren’t looking to change the way they operate are likely to be left behind. Businesses that embrace an ecosystem approach to co-creation will have the greatest potential for success.
Successful digital transformation is complex and involves aligning technology with business functions, integrating new technologies with legacy technologies, and delivering innovation in places that are uncomfortable with risk.
These myths create a disconnect in organisations when it comes to technology projects. In looking at organisations that have delivered outcomes from digital transformation projects, six factors consistently stand out as important, regardless of industry or geography. These are:
Leadership: building strong leadership and strategic direction, alongside a culture that supports innovation and change, with a shared vision and purpose.
People: bringing together the right people with different skillsets.
Agility: having the ability to work quickly and incrementally.
Business integration: integrating business and technology to connect the digital and physical parts of the business.
Ecosystem: building an ecosystem of partners.
Value from data: being able to use data to deliver benefits while keeping it secure.
For digital transformation success, businesses need to take steps to focus on execution, build digital capabilities, unlock value from data, find the appropriate technologies, look to the CIO as a key leader, align the physical and the digital to create real change. With strong leadership and by following these steps to success, businesses in any industry can achieve meaningful digital transformation.
Dr Alex Bazin is vice president - global connected services at Fujitsu
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