The pandemic has surely accelerated the need for digital transformation of all business organisations. However, the most common mistake I see is that business leaders believe that such digital transformation is only and exclusively related to investing or buying new technology, without going through the extremely important process as to how such digital transformation will require the business to reinvent itself or at least rethink how it will change the way it goes about doing business. This leads to a number of failed digital transformation projects due to a number of causes that are generally the result of underestimating the various steps or stages required to successfully execute a digital transformation agenda.

As already outlined, the most common error is the naïve assumption that by simply buying technology — or investing in any of the fancy tools or shiny new objects of the booming tech market — businesses will somehow transform. Even the best technology will go to waste if you don’t have the right processes, culture and talent in place to take advantage of it. Actually problems are likely to compound when businesses decide to embark on any digital transformation project without having a clear definition, let alone vision, for what it wants to achieve.

Whilst every business organisation is unique and so there are salient differences between types of businesses, digital transformation is not about replacing old technologies with new ones, or capturing high volumes of data or trying to copy things done by others.

So what should be the basis of any digital transformation project?

The essence of digital transformation is to become a data-driven organisation, ensuring that key decisions, actions and processes are strongly influenced by data-driven insights, rather than by human intuition. In other words, businesses will only transform when they have managed to change how people behave and how things are done. This means that there are a number of components that need to be executed properly as part of any organisation’s digital transformation:

1. People: Digital transformation starts with people, which is a useful reminder that whenever we talk about data — especially valuable data — there are humans at the end of it. For most organisations, the people aspect of transformation refers to the access they have to consumers, clients and employees. Historically, business tend to think in an analog and informal way, leading to vital information being kept just in minds of key employees. The need for proper data management systems becomes more pressing when an organisation becomes too large or complex.
2. Data: If you want to scale the knowledge you have about your customers and employees, and replicate it across a big organisation and in far more complex and unpredictable situations, you need to have data — widely accessible and retrievable records of interactions with consumers, employees and clients. This is where technology can have the biggest impact — in the process of capturing or creating digital records of what people do, who they are and what they prefer. This reminds us that the real benefits from technology are mainly related to the capturing of valuable data
3. Insights: Although data has been hailed as the new oil, just like with oil, the value depends on whether we can clean it, refine it and use it to fuel something impactful. Without a system or framework any data will be useless. But with the right expertise and tools, data can be turned into insights. This is where technology gives way to analytics — the science that helps us give meaning to the data.
4. Action: But even getting to the insights stage is not enough. As a matter of fact, the most interesting, captivating and curious insights will go to waste without a solid plan to turn them into actions. Suppose that your insights tell you that customers dislike a certain product — how will this influence your product development and marketing strategy?Suppose that the data insights you have can predict if some clients are at risk of going to your competitors, what will you do? AI can make predictions and data can give you insights, but the “so what” part requires actions, and these actions need the relevant skills, processes and change management plans.
5. Results: In the final stage of the process, you can evaluate results or impact. Except this is not really the final step — after you evaluate results, you need to go back to the data. The results themselves become part of a richer dataset, which will be augmented and improved with the findings of the process. In this iterative process or retroactive feedback loop, you enable your insights to become more predictive, more meaningful and more valuable, which itself gives more value to the data. It is through such a process that you can enhance and develop the people skills that are needed to produce a great synergy between humans and technology.

Accelerating Digital Transformation

Many times I see digital transformation projects that drag on, almost becoming a “never-never” project. The main reasons why this is so are:-

• Behaviour as a barrier: A significant barrier to behavioural change in organisations is the inertia of old ways of doing things. Past processes designed for an analog world can conflict with digital technologies, leading to duplication of effort and significant employee frustration.
• Lack of support for a desired behavioural change: Managing the human side of digital transformation requires work to systematically reinforce desired behavioral change. Approaches that have the potential to give a louder voice to broader groups of employees only work if there are reinforcing mechanisms to hear those voices clearly and act based on what they are saying.

Conclusion

In essence, the main and simple message is that the critical part of digital transformation is not “digital” but “transformation.” Our world has changed dramatically in the past decades and more so in the past 2 years. The adaptation of your business organisation to these changes cannot be achieved overnight or simply by buying new technologies or collecting more data. What is needed is a shift in mindset, culture and talent, including upskilling and reskilling your workforce so that they are really future-ready.