7 digital transformation myths
Digital transformation has the potential to be, well, transformative; when done right, a digital transformation can enable your business to reap significant, and well-documented, benefits. But with many things IT, there comes a tendency to get wrapped up in the hype and not think through the hard truths of execution until the promise doesn’t live up to the expectation.
And of course, the underlying concepts and strategies of digital transformation are not new. The idea of rethinking of how an organization uses technology in pursuit of new revenue streams or new business models has been central to business “since we started to put corporate records and transactions on computers in the 1970s, and it continues to build and accelerate in the transformative age of digital today,’’ notes Michael Kanazawa, Americas advisory leader of innovation at Ernst & Young. For those who have been continuously innovating and leveraging new technologies, there is no hype, he adds.
“There is a constant push to innovate business as fast as new technologies enable breakthroughs in value and business performance, and that’s a journey,” he says, “not a moment in time to be ‘hyped.’”
Here are seven myths about digital transformation from industry experts and business and IT leaders.
With new and emerging digital capabilities affecting all areas of the business, it’s important to remember that the transformation is just as much about leadership as the technology, says Janice Miller, director of leadership programs and product management at Harvard Business Publishing Corporate Learning, a leadership development firm.
“Digital leadership requires an entirely new mindset, one that needs to be carried out to all members of an organization, at every level,’’ she says. To be successful, “companies need to assess how the technology will be used to improve their business model, and drive value and connect with end customers.”
Technology can be a powerful enabler, agrees Aaron Rubinstein, manager of shared services & technology for the global supply chain at Andarko Petroleum. “But without an organizational structure aligned to support the objectives of the project, a culture that accepts the rationale for change, and intuitive business processes that connect people and systems, a truly transformational outcome is very difficult to achieve,’’ he says.
Thinking about these types of projects narrowly as software implementations often results in a failure to realize the full potential of what was envisioned, Rubinstein says. Not only do you need the right team to lead a transformation effort, he adds, but also a broad, organizational culture that is ready to undertake meaningful change.
The reality is real transformation comes from disruptors that do not have large market share, says Stephen Andriole, a professor of business technology at Villanova University’s School of Business.
There is still a lot of ignorance surrounding what digital transformation is, based on Villanova data, he says. Some respondents thought it was the equivalent of installing a new ERP system, he says. Consequently, large corporations think they dominate their industries simply because they have been successful in the past, says Andriole, noting that “Marriott could have done AirBnB. But they didn’t.”
Other startups, like Amazon, Uber and Netflix, among others, have found tremendous success over traditional players in their respective industries, he points out. However, established companies like Starbucks are also staying competitive because they are always looking at their processes and experimenting with their stores, Andriole says.
“They’re very innovative and looking at their processes and making adjustments to improve those processes,’’ he says. “They’re one of the first, I believe, to do cashless transactions because they want them to go faster and sell more stuff. … You think making coffee is simple, but it’s not.
