The need for transformation on the other side of the pandemic is as existential as it was in 2020. The changes required to get you there, however, are typically so broad and all-encompassing that it’s hard to get your teams to agree on what needs to be done, let alone coalesce around anything as difficult to define as “digital transformation.” What your business and technology leaders likely need is a set of universally understood business outcomes that are predefined, easy to understand, and, taken together, can become a road map to your transformation efforts.
Digital transformation used to be about foundational elements like data modernization, core technology enhancements, and back-office automation, but companies today often face new digital challenges. Now, as Nadella wrote, “Every organization is looking to digitize their end-to-end operations—from sales and customer service to supply chain management—so they can rapidly adapt to changing market dynamics.” This new work is generally orders of magnitude harder because you’re shifting from optimizing to reinventing and disrupting the work lives of a new population of employees: creatives, product developers, and sales.
Technology now has the capacity to transform nearly every aspect of every organization. It presents a great opportunity to reinvent how companies do business and expand their reach. It can be a great threat too, as competitors and disruptors embrace new, tech-enabled business models to unseat incumbents. These forces are driving many companies to disrupt themselves and rethink how value is created.
Can supply chains become smarter to scale up and down more nimbly? Can remote workers achieve the same level of creative collaboration as in-person teams? How can you anticipate and shape customer demand? In answering these questions, companies may attempt more subtle, nuanced, and complicated transformations that affect more of the organization and play out over a longer time. Many are tinkering with core business strategies and unique value propositions and will roll out their enhancements to the public against competitors that are ready to pounce on missteps. The stakes of these transformations are higher than ever because they can alter the lifeblood of how a company creates value, directly impacting brand perception, customer and supplier relationships, product sales and viability, and more.
But as they look to next-generation capabilities, many companies have yet to master the fundamentals. Many still don’t have the right digital foundation in place. Many still struggle to link digital investments to strategic value and achieve buy-in and adoption from customers and employees. As a result, transformation often comes with considerable waste. Costs might be higher than projected, and too few projects can lead to the impactful change that technology promises.
This inefficiency has been frustrating and inconvenient but was tolerated during earlier modernization work because the stakes on these transformations were lower. Investing in analytics for your finance group is essential but won’t break the back of your business if the project falters. Now it’s no longer about preventing waste. It’s about seizing an opportunity before your competitors do or preventing a catastrophic stumble that could shut down your supply chain, kill a product, or even end your business. Now is the time to get transformation right.
If there’s a single reason for waste and stumbling in digital transformations, it’s something you’ve heard before: To succeed, you need to put strategy before technology. You should start with what the business needs and then find the tech that enables it. To do this well, business and technology leaders need to collaborate effectively. When they don’t understand each other, strategy can stall and transformations can become all about the tech. They might jump at the latest “what” before thinking through the “why.
