Airbnb has irrevocably changed the vacation industry, Uber and Lyft have done the same to the transportation industry,...
and DVDs are poised to go the way of dinosaurs, thanks to Netflix and other streaming media companies. Indeed, it's hard to think of any industry that's immune to the effects of digital disruption.
In this landscape, amidst a barrage of information, business leaders must determine the best business transformation strategy and which digital technologies will enable it. The key is focusing on the vision for your company's growth, rather than being led by talk of the latest, greatest technology. Here are five ways to help you do that.
1. Don't let biased personal preferences determine which digital technologies you'll use in crafting your business transformation strategy.
Influential business stakeholders within an organization who have a firsthand positive experience with a particular technology risk developing a strong set of personal preferences. This may be unhelpful in the objective assessment of digital technologies intended to meet overall business strategies and objectives.
Takeaway: Actively set and manage expectations of key stakeholders at all stages of your digital journey. List the key assumptions. Then test these against your organization's specific context through a small proof-of-concept (POC) trial. Then look at the evidence.
2. Don't forget why your company is in business.
A business transformation strategy should enable your specific business to use digital to gain success and a greater competitive edge. At all stages of the assessment, selection and adoption of the latest digital technologies, the underlying focus should be on ensuring that there is a direct association with and alignment to the overall business strategies and objectives.
Takeaway: The executive team should be asking project sponsors these questions:
- In what way will this digital technology help achieve which specific business strategies? Then seek evidence. If you're unsure -- prototype. (See Point 4, below.)
- Can you explicitly state what business case assumptions have been made and how they have been validated?
3. The technology that works well now may be a problem later. Expect change.
The undue focus of executive decision-making on the short term at the expense of the longer term is being increasingly recognized as a problem. Adding to this propensity for short-term decision-making is the fact that digital technology is rapidly evolving. The product you use now is very likely to be different next year. While this rapid change is often an advantage for those organizations needing a solution now, if you are planning for the medium and longer term, how will you plan for technology change, and will it mean a real business risk? The key is to make this a conscious decision.
Takeaway: Avoid short-term thinking -- unless, of course, your business is not planning for a long-term future.
4. Build a capability for rapid technology prototyping and business-scenario modeling.
Where your digital investments involve business and technology complexity or risk, having the internal capability of rapidly prototyping how the technology will deliver value (and at what risk) will increase the probability of achieving successful business outcomes. This can be done by implementing a focused PoC trial in critical areas of the system. This will provide evidence to support the assumption that it will work in your organization. Being able to rapidly validate key assumptions can be a game-changer and can save you from substantial future cost or risk. For example, if the results of your PoC show that the data exchanges between your proposed and existing systems are more complex than you were led to believe, this could be a real problem in a fully scaled-up live implementation.
An effective rapid prototyping capability hinges on a multidisciplinary approach -- involving key business subject matter experts, IT, vendors and others as needed -- all on the same prototyping team. Expecting your vendor or IT to do all the work will likely deliver suboptimal results. Familiarize yourself with the field of operations research, which relates to the application of advanced analytical methods to help make better decisions.
Takeaway: Prototype and model key business scenarios and test their success. This approach is far less expensive than implementing digital technologies in your business and waiting to see how they turn out.
5. Ensure your business and technology governance can support business transformation.
Using methods, approaches or techniques that are based on the cumulative learning of previous successes and failures becomes standardized as best practices. In environments not subject to rapid change, governance based on proven best practices improves the confidence that the desired result will be achieved.
However, "best" is relative, and adhering to standardized practices can also contribute to organizational inflexibility and stand in the way of business transformation, especially one supported by digital technologies. In the world of new, emerging and rapidly evolving digital technologies and disruptive business models, reliance on perceived "best practice" may be inappropriate due to the lack of precedence. Trying for responsive and adaptive practices is much wiser.
Takeaway: Ensure that your governance frameworks and associated processes are responsive and adaptive to change. Rote reliance on "best practices" should be tested for relevance.
Recent industry research suggests that more than half of all enterprise digital initiatives have failed to live up their expectations, with only one in eight delivering on their promises. Such a statistic highlights the importance of determining your business transformation strategy according to your organization's unique goals and mission rather than listening to digital technology hype.
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