Important Update
Digital Transformation is the latest buzzword. Hardly would you find a CIO that is not considering a combination of Artificial Intelligence, Cloud Computing, Big Data, and Machine learning to streamline business processes and provide quality customer experience. You can also read more on What is Digital Transformation?
However, there still exists a gap between the realities of Digital Transformation and its dreams. According to Mckinsey’s analysis, the sad reality is that the majority of transformational ambitions don’t see the light of the day. Research indicates that close to 70% of large-scale and complex plans don’t attain their expected objectives.
Some common setbacks incorporate insufficient support from management, absence of employee engagement, poor cross-functional collaboration, as well as lack of accountability. Also, it takes some paradigm shifts to sustain the impact of transformation.
While there exist several reasons digital transformations don’t reach their expected goals, here are the two biggest reasons:
If the top executives don’t agree, it can be difficult for their subordinates to decide on what ought to be prioritized and how to evaluate progress.
It’s a known fact that securing the support of relevant stakeholders such as senior executives is an important skill that comes with business leadership. What is usually underestimated is the time needed to carry out this aspect of responsibility. The reality is that getting stakeholders to collaborate is not just a job aspect but the main job. You can’t achieve anything without a consensus.
If this looks like a scenario that you can relate to, you can adopt this to adjust the dynamics.
If you want to discover a point where the leaders connect, you will need to understand the real concerns, both spoken and unspoken, that every one of them holds. To unravel that, leverage a concept that is called ‘180 thinking’. This concept affirms viewing the specifics of each circumstance via the lens of every major stakeholder. What questions are locked in their minds as they give you attention? What are the strings of questions attached to the main problems? You can’t provide help until you know where they all stand and why.
A significant benefit of managing different stakeholders is you are best positioned to listen and assist them in clarifying their thought patterns. This is true when you head a meeting or lead a discussion where an audience of top executives couldn’t reach a consensus. While you may be subordinate, you can take a significant position in assisting them to align on the transformational agenda.
For instance, you can use this clarifying language:
“We agree to have X, Y, and Z as top priorities on the transformation agenda. Based on that, a salient decision that’s required from this gathering is _______.”
“You have all reached a consensus on the duration of the project. However, a major aspect we need to discuss and decide on is how to fund the project.”
“You have asked three important questions, which are A, B, C, and it seems you want to address question A first.”
You should understand that you have so much to do. Usually, you can discuss with the top executives that, except they reach a consensus concerning the digital transformation agenda, you are assuming a holding pattern. After all, it is the CEO’s job to get everyone aligned on the digital transformation agenda and not your duty to play the middleman. Provide a stream of information that cuts across levels consistently and transparently, and try as much as possible to make a move.
This is often called ‘Pilot Purgatory’ in the tech circle. In a survey of over 700 professionals in the manufacturing industry manufacturing in early 2019, over two-thirds affirmed that digital transformation is a major priority on the operation’s agenda.
The reality is that it is not only enterprises in advanced economies that are prioritizing Industry 4.0. Respondents from Brazil, China, and India were prioritizing it compared to those in the United States and Europe.
Manufacturers are not only forming thoughts on digital transformation, but they are taking actionable steps. Over 60% of the enterprises have implemented emerging digital technologies at a level that is commensurate to their pilot programs. And those enterprises are making advancements on diverse levels.
The surveyed professionals affirmed that there are inherent potentialities in different aspects of technology, incorporating the leveraging of Robotic Process Automation, smarter analytics, and enhanced connectivity. On average, they are working on eight digital ideas across the organizations’ manufacturing processes. The average is over 10 in the Chinese and Indian firms.
Now here’s the crux of the credo. About a quarter of the professionals affirmed that they had taken actionable steps on their digital transformation agenda, which is the transition to large scale implementation from the pilot program.
The gap between the pilot test and implementation is substantially larger compared to the gap that exists between perceived use cases and piloting, meaning scaling is a more significant task than getting started.
Here are six success indicators that have worked for enterprises that oversee leap to large-scale roll-out of digital transformation or Industry 4.0
Successful digital transformation projects focus on real business use cases. The major question is not ‘How can we leverage this digital innovation? But, ‘how can we add more value leveraging this technology?’. Organizations should have what it takes to back their answers up with a holistic business case that establishes an equilibrium between costs and the value-added potentialities.
Digital transformation is a journey. Organizations need to focus on how the implementation of the latest technologies will enable them to gain a competitive advantage in the long term instead of focusing on present needs. Once the destination is clear, they need to institutionalize detailed roll-out road map that explains the technical structure, resources, as well as, the milestones they want to reach.
Organizations need to adopt a systematic approach in designing a digital transformation architecture that aligns with their major requirements. In clarifying the elements, they need to be comprehensive ( factoring data sourcing, analytics, connectivity and application needs), scalable ( putting the future capability requirements in view), integrated( ensuring alignment in systems and processes, and data is gathered to improve analytics), as well as secure.
It takes an intensive synergy to benefit from digital transformation. Organizations need to collaborate internally across boards, business units, and processes, and externally with some integration partners and tech providers. They should leverage industry best practices as much as possible to simplify interoperability both within and outside the organization.
To appreciate the comprehensive benefits of digital transformation, organizations require consistency and stamina in their strategy. The best approach is to lead the transformation from the top. The top executives and the organization’s P&L leaders must be clear on the corporate goals, as well as the new direction needed to achieve those goals. The top executives should own the digital transformation. Decisions making should also be directed across geographies, plants, and processes.
Successful enterprises understand the significance of new skills and expertise as they approach digital transformation and the importance of a corporate culture that brings about development. The vital skillsets and capabilities can be cultivated via internal training, talent acquisition, and liaising with technology vendors, research, and development institutions.
A digital transformation will not fail in an environment that supports innovation and creativity. Successful enterprises are seeking new concepts and ideas from their workforce, technology providers, and the world at large. Do you think Digital transformation is important to your business?
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