Digital transformation has become a buzzword in business today, as business leaders realize that by digitally transforming their operations, they can bring about improvements in everything from supply chain management to customer relations. As the word ‘digital’ permeates all aspects of business, Asian businesses are under significant pressure to accelerate and intensify their digital transformation plans.
Despite the promises and potential of digital transformation, many businesses underestimate the momentum of digitization and the behavioural changes necessary to succeed. In many cases, businesses start without a proper digital strategy or framework, where major tech investments often only increases the complexity to work and be compliant with regulations.
At the same time, governments in the region are recognizing the competitive risks of falling behind and are putting initiatives in place to overcome organizational inertia and resistance to change.
What do enterprises need to understand, in order to be confident enough to take the digital step?
It starts with strategy and communication
First, enterprises need to ask themselves what digital transformation means for different parts of their organization, and why digitalization is important to the company. Consider what particular opportunities or challenges the business is facing, and how can that be addressed with technology? This direction is critical in identifying and defining a digital strategy. Leaders must then communicate this digital strategy with a sense of purpose and shared goal that everyone can envision and work towards.
From there, the goal can easily be communicated to various parts of the organization – starting with cross-functional project teams that form to address a particular opportunity or challenge. Breaking down traditional silos and bringing together people with different analytics, creative and industry knowledge and skills will allow people to think about problems differently and drive innovation. This also fosters a minds of experimentation, resilience and adaptability which is crucial in the digital economy.
Empowered employees will empower businesses
Organizations need to unleash the creativity and innovation of their own people.
A McKinsey report recently revealed that while more than 80% of executives acknowledge the crucial role innovation plays in an organization’s growth strategy, only six percent are satisfied with the outcome of their business transformation. In the race to modernize their business, many tend to forget that meaningful innovation is built upon addressing business needs and end-user feedback.
It is a company’s employees that are best positioned to develop solutions that deeply resonate with the customers’ needs and expectations. This will gives companies the competitive edge to stand out in today’s crowded market space.
So how should a business unlock its employees’ full potential?
Innovation that does not simplify and enable the work of employees will not deliver the business benefits leaders crave. Creating an employee experience—not just engagement—that is centred on a culture of innovation, one that fosters deeper collaboration, ramps up efficiency, and builds employee loyalty. Sounds good – but things are more easily said than done.
The commitment to adopt new technologies is the obvious first step to empowering employees, but management needs to move away from the traditional top-down approach and apply a two-way communication process. This means defining strategic, organization-wide policies to encourage candid discussions – and ensuring that staff know their views, whatever they are, are welcome and valued.
This is easily done first in small teams with a single goal or problem. Once the team has successfully tackled a challenge with technology, this method can be deployed by other teams to look deeply into the challenges and opportunities facing the business, and how these can be addressed with technology. Freely sharing ideas, approaches and experiences among the teams will ignite the spark for change by prompting different ways of thinking about problems.
Working with data in completely new ways
There is no question that legacy IT systems are too slow and rigid for the demands of digital transformation today. Optimizing IT infrastructure and leveraging new technologies is a disruptive process but the benefits are wide-ranging. In terms of operations, it can help organizations gain visibility into how IT systems are functioning.
The lack of visibility caused by many disconnected systems and databases make it much harder to properly manage IT applications and services, or for employees to share information and insights with each other.
According to research by Aberdeen, companies gain high visibility when they deploy unified solutions that give them an end-to-end view into how all their IT systems are performing, how end-users experience them, and whether or not they are delivering on their capabilities. With this visibility they are 65 times more likely to have unified dashboards and analytics that give all business units visibility into IT capacity and how systems are performing.
As companies modernize their IT infrastructure, they are looking to gain flexibility, scalability, and—above all—speed. Combined with an outside-in approach to business – the belief that customer orientation is the key to success – this increasingly means cloud and an API/services-based infrastructure.
Modernizing their operational backbones allows enterprises to gain flexibility while controlling costs, improve operations, build a set of digital services like applications and visualization software, and extract value from the wealth of diverse data sets they can now access. These benefits are well worth the disruption to legacy operations caused by setting them up.
Engaging with customers
The digital revolution is perhaps above all redefining the meaning of “customer.” No longer is the passive recipient of a product or service at the end of a supply chain. Today’s customer is a partner in the digital transformation journey. That means the customer is playing a key role in the process of disrupting existing business models and creating new, innovative enterprises.
App-driven customers are re-directing their spending to agile vendors who can meet their demand for customised content-as-a-service and offer an omni-channel experience that expands their choice. Established vendors therefore need to work to become “digital” providers themselves, radically changing how they engage with customers.
Disruption delivers innovation
Embarking on the digital transformation journey is indeed disruptive, in terms both of deploying new technology and changing your business model to leverage it fully. In fact, if it isn’t disruptive, you’re not doing it properly.
But it is when companies bring together people with deep industry knowledge and people with analytics skills, creative skills, policy knowledge, and more—that’s when you see the business advantage of disruption. It creates a jump in innovation because people think about problems differently.
Digital transformation demands leadership, organizational restructuring, investments in people and IT infrastructures, new relationships inside and outside the organization, and overcoming inertia and resistance to change. Above all, it requires flexibility and commitment to change, to fully reap the seemingly endless benefits.