Digital Transformation = Reimagining of the Business for the Digital Age
I had the opportunity to host Mr. Vijay Sethi (CIO, CHRO and head of CSR at the world’s largest two wheeler manufacturer – Hero Moto Corp) on a meeting and request him to share his his insights and learnings about digital transformation. He also busts some of the myths about digital transformation. If digital transformation is a topic of interest for you, I highly recommend that you watch the entire session here.
Once upon a time:
The CIO had a very peaceful life and were very happy running the applications that they were responsible for (SAP, networks, security, email, etc). But in the last 10 – 12 years, things have changed and that too significantly. There has been an avalanche of buzzwords taking the world by storm.
- SCAM – Social Media, Cloud, Analytics and mobility.
- BAR – Blockchain, Artificial Intelligence and Robotics.
These buzzwords move from just being buzzwords to becoming a reality of our lives. Digital is pervading the entire organisations from top floor to the shop floor.
Add to this, the generation of people that have joined the workforce are the internet native generation. Given the current situation of the pandemic, children are attending school on a mobile device from the comfort of their homes. Imagine the kind of expectations these citizens will have when they enter the workforce.
What this has all done is to bring the conversation around digital transformation to the forefront of all the businesses. If you are not thinking and working towards digital transformation in your organisation, you might already be missing the bus.
Why should one care of digital transformation:
- Digital transformation programs have the potential to provide disproportional return on investments to the business.
- Enabling growth in the business by enabling new business models or channels or capabilities.
- In many cases, survival of the business will depend on how well digital transformation efforts play out in the market. The current pandemic has clearly shown that being digital is not just a nice to have side project for businesses but in many cases, has become the core of the business model.
- When customers experience digital native businesses, their expectations from all businesses change, which means that if a business wants to survive or even thrive, digital transformation of business is inevitable.
What is Digital transformation:
Before we understand what digital transformation is, it is important to understand what it is not.
Automation of business processes is not Digital transformation.
When asked for examples of digital transformation, the common names that come up are that of Uber, Ola, Oyo and AirBnB. They are not examples of digital transformation but are examples of digital disruption. They are born digital and enabled new business models leading to disrupting entire industries.
Too often, Digital transformation, feels like a buzzword. As companies rush to streamline operational efficiency and impress end users with slick new interfaces, without a focused approach to solve the real challenge at hand, which is, how to deliver a superior customer experience in the digital age.
So, what is Digital Transformation?
Digital transformation involves defining a roadmap with a sequence of capabilities that should be developed, with the specific purpose of leveraging digital technologies to drive business to a different level!
Digital Transformation is about using digital technologies to create new – or modify existing – business processes, culture and customer experiences to meet changing business and market requirements!!
Digital transformation is when you enable a non-digital native business to leverage digital technologies to transform themselves such that they are able to not only compete but also thrive in the new business environment.
Digital transformation is a process and a journey and not a destination. One can’t say that now I am digitally transformed. So, how do we embark on this journey?
Defining a roadmap:
Every business needs to develop a clear vision of what would it be like to do business with them. Based on this vision, the team then needs to come up with a roadmap of what new capabilities will this vision need to come alive and by when do we need these capabilities and in what sequence.
Leveraging Digital Technologies:
Once we have the roadmap, we then go looking for the best technologies available in order to bring the roadmap and the capabilities alive and not the other way around, as a lot of businesses attempt.
Business models, Culture & Customer experiences
The move from status quo to the vision laid out at the start usually requires the digital transformation program to address at least two of these three areas. The result of the digital transformation effort should either
- Create or enable new business processes and business models, which can lead to outsized increase in efficiencies and profits or enable the business to target new markets or customer segments.
- Create a new kind of culture or modify the existing culture within the organisation. Culture of the organisation is like the operating system on a computer. All other programs will need to work within the limitations of the operating system. Just like the operating system is always working behind the curtains, culture of an organisation is also always working behind the scenes and controls what can be done and what can’t be done.
- Create new or modify existing customer experiences. The reason for a business to exist is to create and satisfy a customer and her needs/wants/desires. So, digital transformation programs need to significantly change (hopefully make it better) the customer experiences in order to provide the disproportionate returns on the investment.
All of this is now possible as the convergence and the maturity of digital technologies has significantly evolved over the years.
If a digital transformation project has to have any chance of the impact that it can have, customer experience has to be at the center of digital transformation programs.
Most digital technologies provide possibilities for efficiency gains and customer intimacy – but if people lack the right mindset to change and the current organizational practices are flawed, digital transformation will simply magnify those flaws.
So, if you really want to run digital transformation, you need to start with the mindset and culture change.