The Key to Executing Your Digital Transformation Strategy
Executing on Digital Transformation Strategy is Hard
Whether or not they have a significant part in crafting the digital transformation strategy, IT leaders are expected to lead in the execution of that strategy. Executing a digital transformation strategy is hard. Research published by Boston Consulting Group (BCG) asserts that while 94% of companies have big aspirations to deliver substantial and rapid impact from digital transformation, more than 70% of these projects fail to achieve their objectives. How can your organization reverse this trend and successfully execute on your digital transformation strategy?
First, we need to identify why the failure rate is so high. Didier Bonnet, a leading expert on this subject, has identified three reasons. The primary reason is the lack of a strong digital transformation strategy. Many leadership teams either fail to set objectives or have unrealistic expectations about the timing and scope of their initiatives. This is especially common when IT is not part of strategic planning. Another reason digital transformation initiatives fail is poor execution. This includes poor communication, weak governance, prioritizing technology deployment over adoption, or focusing on the wrong metrics.
Finally, the third reason is the scope and pace of the project. In a recent article published by Harvard Business Review, Bonnet says, “The most under-appreciated reason that digital transformations fail is by going too big, too fast. There’s a learning curve to digital transformation, and most companies need to walk before they can run.”
Managing the Scope of Your Digital Transformation Strategy
According to Bonnet, “the key is to start with modernization efforts that don’t transform the business — much less create a new one — but that create the capacity to succeed in more ambitious efforts later on.”
Bonnet views digital transformation as having three stages. The first step, Modernization, is about simplifying and digitizing existing processes and functions. Step two is enterprise-wide transformation, which he describes as complex value cross-value chain efforts, like fully automating order-to-cash or quote-to-cash processes. New business creation, step three, is leveraging improvements in operations and information to increase revenues from existing channels or to create new revenue sources.
To succeed, it is crucial that your digital transformation strategy starts with Modernization initiatives. These should be manageable in scope but still provide significant, measurable business impact. They should be designed to build organizational capacity and scalable infrastructure for more and larger projects.
People, Process, and Technology
Digital transformation is the latest in a long series of significant structural changes in how business is done. As standalone components, people, processes, and technology are necessary for organizational transformation and management. To succeed, you need to balance the three and ensure they are aligned. This alignment is often referred to as “the golden triangle.”
Successful execution of your digital transformation strategy requires the modernization of your people, processes, and technology. Let’s look at each element.
People Modernization – Enabling Business Technologists
The good news here is that demographics and changing nature of work have done most of this work for us. Even before the pandemic, the increase of Millennial and Gen-Z employees in the workforce drove increasing digital workforce maturity. These digital natives grew up in a digital world and were already immersed in modern interfaces and user experiences. The rapid implementation of new technologies for remote work and touchless customer experiences forced older employees who had previously resisted modern technology to adapt to remain relevant.
This has resulted in a work environment where almost all end-users have a degree of digital fluency, increasing the number and importance of business technologists (also known as citizen integrators). These are the most digitally adept employees who modify, customize, or configure their own analytics, process automation, or solutions.
To execute on digital transformation strategy, IT needs to partner with business technologists, especially in start-ups and mid-size organizations that cannot dedicate IT resources to digital transformation projects. To meet their needs, organizations must provide tools that enable DIY ingenuity, experimentation, and innovation. This must be balanced, however, with proper controls to maintain security, compliance, and effective IT operations.
Process Modernization – A New Model for IT
The traditional approach to process modernization would be an analysis and reengineering of how IT went about planning and executing automation and data quality projects. This approach leaves out the modernization of people, which is a key component of the golden triangle.
To leverage these valuable people resources, many IT organizations are adopting a “federated” model to enable business technologists and drive digital transformation across the enterprise. A traditional, centralized model ensures governance but creates bottlenecks that slow automation and limit innovation. While a decentralized model maximizes agility, there are higher security and compliance risks. There are also greater challenges in coordinating teams in digital transformation efforts that span multiple departments or functions.
In the federated model, IT transitions from delivering process automation and integrations to enabling business teams to implement and maintain them. IT defines governance and security policies, manages controls, helps to coordinate across functions, and provides guidance and support. Business technologists can more freely innovate as they are empowered to automate processes and modify them as needed without IT. IT can redeploy resources to focus on more complex digital transformation projects. This gives enterprises greater agility and vastly increases the organization’s capacity for digital transformation.
Technology Modernization – Integration Platform
Implementation of a scalable integration platform is foundational to executing on your digital transformation strategy. A modern, cloud-native Integration Platform as a Service (iPaaS) is the best option to automate business processes and improve data quality at scale. An iPaaS accelerates the integration of SaaS technologies to automate business processes, helps create seamless, unified customer experiences, and enables business teams to obtain real-time data and aggregate data from multiple sources for analytics.
While a traditional iPaaS will provide these benefits, these solutions are more limited because they are designed to enable just the IT function to address integration problems across the enterprise and maximize the productivity of technical resources. A modern iPaaS enables business technologists as well as IT to address integration problems across the enterprise and drive digital automation and improved data quality across the enterprise.
Putting the Key in the Ignition – How to Get Started
Executing on digital transformation is hard, but as Bonnet says, “The key to more successful digital transformation is to not skip ahead: Start with step one and invest the focus and resources to get it right. Growing your organization’s digital maturity through the digital transformation corporate learning curve will increase your chances of success.”
If this approach to digital transformation makes sense to you, we’ve created an eBook called “Mobilizing for Innovation – A Blueprint for Rapid Automation Across the Enterprise.” We break down the roles and responsibilities of both business and IT leaders and teams and provide a step-by-step plan — the Automation Blueprint — for rapidly implementing automation across the enterprise that you can use to build organizational capacity for digital transformation.
The Celigo Integration Platform
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