We are going through a big shift in terms of what technology can do to a business. In the past, businesses used technology to do more of the same, faster, better and cheaper. Now they are using it to do things that were earlier unheard of. The big shift that we are seeing from a digital transformation perspective is to not just simply invent products but also invent business models.
Yet, a recent survey points out that almost 70% of all digital transformation initiatives do not reach their goals. Of the $1.3 trillion that was spent on DT last year, it was estimated that $900 billion went to waste. Where are the organizations going wrong?
According to Akhilesh Tuteja, Partner & Head Risk Consulting, KPMG in India; Co-leader, Global Cyber Security Practice, one of the biggest mistakes CIOs and digital leaders tend to make is to view digital transformation as an end-point or destination.
“I believe that the term ‘digital transformation’ is a misnomer. The right term is ‘digital journey’. For digital to be truly transformative, it’s important to first understand that digital transformation is not a destination, wherein you move from point ‘A’ to point ‘B’ and your transformation is done. If that’s the case, then somebody else will come and transform you. Great companies are now undertaking digital journeys wherein they constantly keep challenging the status quo and continue to transform. We will see successes come out of digital journeys than from digital transformation,” he adds.
Getting Off to the Right Start
For Tuteja, while there should be no end point for a digital journey, there must absolutely be a very clear start point. He advocates three key best practices to get off to the right start in this journey.
1) Clear understanding of business strategy
Businesses often undertake digital journeys without having full alignment with what the business wants to do. If your objective is to just automate and do process transformation, then there is no big deal. But, if your objective is business transformation, whoever is leading the journey must have a very clear idea of what the business wants. Typically, it must be run from the top. Even for the CEO who has million jobs to do, and one would say this is another job, but actually this is the one. If the idea is business transformation, then who else can do it?
2) Don’t underestimate digital business, however small:
Companies tend to underestimate the digital business, thinking that right it’s a small proportion of the overall business or not yet profitable. But, the reality is that you can’t assess the time required for a digital journey to be in proportion to what your physical journey is. It requires a disproportionate amount of time.
3) Identify the right people to execute:
The third big start point is getting right on the people who will make a difference to the execution of the program. Do bear in mind that if you are bringing in a Chief Digital Officer to drive the digital journey and you don’t get your CIO/CTO to buy into that vision, then you have started on a ground where you haven’t got to a start point. If you have two people executing on this journey, they can’t be working in isolation. I have seen enough examples where because organizations don’t want to take a hard stand and don’t want these two people to collide, they put them in two different groups. By isolating their playfield, you’ve only made it worse, because mind you, no CDO can build the technology without talking to the classical enterprise legacy technologies.