The old saying is one should never bite the hand that feeds. So it might seem strange to hear from someone that works in a digital technology consultancy that technology implementation is the least important part of digital transformation.
While we’re at it, it’s also the easiest part of transformation to do.
So now I’ve put that out there, let’s look at why I still have a job and why even some of the biggest organisations in the world are still lagging behind when it comes to digital.
B2B companies, in particular, appear to be dragging their heels on digital, with research from McKinsey showing they lag significantly behind their B2C counterparts. However, there is no technical reason for this disparity. In fact, B2B companies often have far more detailed insight into their customers with long-term relationships from which to pull data and information to inform the customer experience. It appears the reason for the gap is philosophical – there is a lack of organisational commitment to change rather than technical barriers.
It is telling the vast majority of digital transformations fail for non-technical reasons. Research from Harvard Business School identifies the top three reasons for the failure of digital transformation projects as organisational restructuring challenges, resistance to change and lack of key digital skills. These are all people problems, not tech challenges.
As part of my role, I get to look under the hood of the digital projects of some of the world’s best known B2B and B2C companies. Typically a huge amount of time and money is committed to technology, but comparatively little applied to comprehensive planning on how it will be adopted. This is akin to buying a supercar with a provisional driving license. You could take it for a spin but more than likely will end up with an expensive mess. As a result, clients are realising that having a plan for tech adoption is as important as the technology strategy and build.
The 3 key ingredients of a digital transformation plan
1. Establish a business value framework
Be clear about the business outcomes your digital strategy is charged with delivering. Digital transformation represents a significant investment, typically over several years. So without a clear demonstration of how it will deliver on the business strategy, there’s little chance you’ll be able to maintain the commitment and senior level sponsorship to see it through. Luckily, as with most business projects, the choices are either a) make money (growing revenue) or b) saving money (reducing costs). B2B firms typically justify digital investment on the latter, but the McKinsey research shows that those B2B firms that invest in customer experience to grow revenue are ultimately more successful.
2. Map out your strategy
Build a clear picture of the capabilities that you will need to develop to execute your strategy. This should not be limited to just technology. Have a clear plan that demonstrates how you will measure success along the way. Digital investments can take up to three years to deliver bottom line results. This creates a lot of pressure to demonstrate short term progress. I find a strategy map is a really effective tool for understanding how you will measure your path to demonstrable financial outcomes.
3. Follow a roadmap
At Cognifide we view the roadmap to transformation along two axis: Platform capabilities, and operating model capabilities. Platform capabilities can be divided into:
- Technology: The tools, hardware and software needed to execute your strategy.
- Data: The information and analysis needed to drive insights and make better decisions and to knit together and personalise a customer experience.
In the B2B world, data is often your ace card. The platform capabilities are where the majority of the focus tends to take place in digital transformation, but without a roadmap for implementing an operating model, it’s likely to mean you’re wasting a lot of money.
Operating model capabilities can be divided into people and process:
- People: What is your plan to ensure you have the right people, with the right skills to execute, organised in the right way?
- Process: What business processes do you need to have in place to effectively deliver a quality customer experience? This includes processes for managing your technology, improving skills, implementing new ways of working, developing and publishing content, undertaking analytics and implementing improvements.
With a clear roadmap, linked to business outcomes, supported by senior stakeholders, with a clear set of KPIs to measure progress, you should be ready to embark on your digital transformation programme with the reassurance that you will see it through.
See – I told you it was easy.
