Digital Transformation in 2018: Sustainably Delivering on the Promise at Scale
In 2017, we witnessed organizations take up the mantle of digital transformation with more conviction and effort than any time before. Funding, commitment, and leadership support was at its highest level ever and only showed signs of increased dedication. Ongoing success stories from many leading organizations showed that large scale technological and business transition was also possible for the typical company, not just industry leaders. Perhaps most vitally, the imperative itself became even clearer to leaders as disruption began to penetrate even into long resistant industries like healthcare, finance, and even insurance.
Yet it was also evident that last year was another major learning year, because through our efforts many of us gained an even fuller appreciation of the sheer size and scope of the required journey ahead of us. Combined this with the steady proliferation of new and important technologies last year and we gained both fresh urgency and a better understanding of the true challenges facing us. In 2017, the Internet of Things and artificial intelligence were felt particularly profoundly on the transformation agenda in the industry, along with data science, analytics, and other forms of capitalizing on the vast and invaluable streams of new information that better digitized businesses generate. 2018 will see the same, but with much more focus on reaching the market effectively and seizing network effect, and less on experimentation.
Of all the many lessons learned on digital transformation last year, perhaps the most important was that the complexity and pervasiveness of the necessary changes — organizational, cultural, and especially mindset — as well as the new technologies themselves require powerful new tools and techniques that simply didn’t exist a couple of years ago.
Two of these new tools and techniques — culled from the hard won experience of the early movers in digital transformation — are particularly worthy of calling out.
The first was a result of the realization that a single, overly centralized change entity like the IT department, the digital line of business (usually led by the chief digital officer), or tech incubator was not sufficient in realizing the profound rethinking and realization of the entire organization in more digital terms. In fact, these entities might not even be that helpful in that they are overly focused on technology and may not have the requisite experience in applying to the redesign and transformation of the business itself. Instead, more decentralized yet highly engaged entities like empowered groups of change agents or networks of transformation teams seem to be more effective are driving long-term change both deeply and widely across the organization. This evidence is backed up by careful research last year by Professor Gerald Kane and his colleagues that digitally mature companies are more likely to have impactful enterprise-wide transformation efforts.
The second insight was that the raw building blocks for digital transformation that existed were simply too primitive, not situated for business use, too little informed by the vital patterns and practices now known to be necessary, and not designed to rapidly incorporate new technology and additional lessons learned as they emerged. In the past, we would have said we needed frameworks for digital transformation, and while those emerged as well, what we really needed was much more operational constructs that had these vital ingredients: A relatively complete cloud tech stack, workable blueprints for specific industries, architectures designed for high leverage that support rapid change, and business solutions crafted to a 40-60% level of completeness and waiting for the details of your business to fill in the rest. While Amazon Web Services, Microsoft Azure, and Google Cloud provided some of these building blocks, they simply weren’t complete on their own.
