Last week, at the Digital Transformation Forum in London, I was surrounded by people who have led, managed or participated in digital transformation programs. They shared a massive amount of knowledge and experience that is too valuable to keep for myself.
Nowadays every organization has some kind of transformation program to digitalize (parts of) their business. Although every organization is different, every transformation program requires executive support and needs to cover a number of areas: culture, customers, technology, data, innovation, partners and value.
Culture: Digital is a State of Mind
One of the questions that popped up quickly was about the driving force behind this transformation. Is that business or IT? It is both!
Digital transformation is first of all a change in the organizational culture to create and foster a digital mindset in every employee, regardless of whether that’s business, IT or any other department. The digital way of working has to be actively promoted, meaning you might have to repeat yourself over and over again. Encourage like-minded people to be ambassadors of this new way of working and reward people to make them proud about their accomplishments in this area.
We are all sales people. We have to sell the value of changing” – Caron Alexander
Replacing the traditional waterfall practice with a true agile one will allow you to build the right service for the right users within a lower budget and a shorter time-to-market. Teams must experiment, deliver, pivot, measure, learn and iterate based on new insights and user feedback. Whether you call your business practices Agile, Lean, Scrum, Kaizen, or something else, make sure that you keep your customers in mind, and be sure to value agility and adaptability over centralization and tradition.
Customers: Put the User at the Heart of Everything!
Digital transformation is closing the gap between customer expectations and business services. Customers are getting more and more tech-savvy and are used to an exceptional customer experience, due to the standards set by GAFA (Google, Apple, Facebook and Amazon) and NATU (Netflix, AirBnb, Tesla and Uber).
“Digital transformation is closing the gap between customer expectations and business services.” – Imran Younis
Organizations should know how people use their products and services by tracking the online and offline behavior. The gained insights allow to create a 360 degrees customer profile that must be used to interact with them, creating a top-notch online and offline seamless experience.
Collecting feedback from customers through surveys, usability tests, website activity tracking or social media monitoring is great. But if you want to go a step further, you can co-create new products and services with your customers.
Innovation: Businesses Have Only Two Functions, Marketing and Innovation
Don’t put too much effort on the employees that resist change. Enable those who want to drive the change. Train them and give them the opportunity to innovate. Innovation should be embedded in every organization. This is something people don’t have to do on the side or at home after hours. It has to be clear that it is part of their job!
“Making innovation deliver is about professionalizing innovation” – Adam Hembury
Although you need to push experimentation, too much uncontrolled innovation initiatives won’t help your business. You need to define processes and best practices for innovation to make sure innovation becomes a continuous given in your organization.
“Fall in love with problems, not solutions!” – Robert Newham
It’s easy to fall in love with your own creative solutions, but do they really address problems worth solving? Catch real problems via observing and interviewing your customers and document them as part of a customer journey. Let your customers validate your mock-ups, prototypes and the actual delivered product to confirm you’re on the right path.
Make sure your organization isn’t too much focused on operational excellence. If there’s no room to think about the future, then don’t expect any innovations. Give your employees some slack to innovate. And if there isn’t budget for innovative experimentation there is only one question worth asking senior management: “Do you know what a Kodak or Blockbuster moment is?”
Data: Data is Fueling Software
Organizations must be quick to deliver against customer needs and expectations in a competitive market. Collecting, storing, analyzing and leveraging customer data is imperative to create an optimal customer journey.
“Turn data into a strategic asset” – Saskia Steinacker
Individualized experiences are no longer just a nice-to-have. Real-time and individualized information in context is what wins! Qualitative customer data is required to make that happen. Collected data such as purchase history, preferences, behavioral data and social media activity must be enriched with insights, derived from that data (through a wide range a analytics and proactive self-improving learning algorithms). Prepare for the data natives! They are customers that expect more than a digital service, namely a smart service that adjusts immediately to their taste and habits.
A data-driven world helps an organization to rethink many of its old assumptions. Customer data forces the organization to think about the customer experience. When an organization drives deeper and deeper into a software-defined, automated world, it moves faster and faster because the important data and associations in the data emerge. That then allows transformation of what the business does.
Technology: Every Company is a Technology Company
From a technology point of view, organizations have to evolve to loosely coupled API-driven microservice architectures that have the flexibility to support rapid prototyping and agile iterative development.
“Every organization needs to understand that it is also a technology company” – Dougie Anscombe-Stephen
Use commercial off-the-shelf software with bespoke development only when it is unavoidable, which is sometimes the case for core systems. Consider open-source alternatives and deploy them in the cloud if possible. Cloud deployment of your services opens new capabilities such as elastic scaling and server-less computing that are hard to accomplish on-premises.
“Stop replacing systems and start designing services” – Caron Alexander
Organizations that have invested heavily in private cloud initiatives are reconsidering their strategy and are looking at the public cloud as a more future-proof and secure alternative. One of the delegates said it like this: “We have chosen for our own private cloud some time ago and now we have to sweat it out! If I could start over again, I would go for the public cloud, no matter what my security officers say”.
From an architectural point-of-view, organizations should strive to a have a box of Lego bricks available to build new digital solutions. Such solutions will consist of a mix of bricks such as SaaS services and PaaS services that are seamlessly integrated.
Partners: Every Digital Journey Needs a Partner
Most organizations lack the skills necessary to deliver digital transformation. That’s why building a partner ecosystem is a vital step to successful transformation. Every step towards progress is the result of constant challenge and collaboration.
“It doesn’t matter how amazing you are, you can’t do it alone. “ – Lara Burns
Look for vendors that are open for a partnership. Be aware of vendors that are only interested in selling licenses. They will not challenge you or advise you how to achieve your objectives.
Instead of time-consuming and expensive tenders, you could consider prototyping a solution in parallel with multiple suppliers. Give them a (limited) budget and see what they do with it. Do they present themselves as true partners?
“We are looking for vendors that are open for a partnership” – Piotr Piskorski
Digital transformation is going to change your supplier landscape. It is in line with expectations that not all consulting and technology suppliers will be able to support you in your digital transformation. Don’t make the mistake to stay with the same vendors for the wrong reasons!
Value: The Endgame
The end goal of digital transformation is maximizing the value for both the customers as the organization via new business models using digital customer experience and digital operations.
Organizations have to reinvent themselves and revisit their market position, value proposition, technology strategy and their complete operating model. Innovate your business model to stay competitive and secure future growth!
At the end of the two days, I didn’t find a magic wand for digital transformation, but there are definitely common areas and challenges in digital transformation programs. The talks and networking conversations gave me insights in those challenges and, more importantly, tips to address them. Tips I had to share!
The future is coming faster than you think! Prepare to be ready for quite some changes! Don’t be scared, keep on smiling and have lots of fun!
Read more about ‘Digital transformation and the hurdles of digital adoption‘!