Digital transformation is about optimizing the performance of the company. Often the organization begins to sense panic, that they have fallen behind in their business execution constructs and now need a specific intervention so that the organization can catch-up with current digital developments and hopefully jump the learning curve on a few ideas that would give them a competitive advantage.
It’s true that in the wonderful world of technology advances, many companies have found new fortunes by changing their business model – i.e., enhanced the sources of revenue. This unexpected gift from digital is neatly translated into what Cisco and others refer to as having your data on your balance sheet. So, your digital transformation will not only achieve a closer collaborative relationship with your market and enable you to execute work in an optimum frictionless environment, it can also add enterprise value to your organization through the monetization of the very data used to run the company.
Looping back to our objectives for strategy – Strategy is about value creation. In its barest form, it refers to the business model’s value proposition by answering why the market would give us money. Digital plays three district roles. It enhances the transactional experience both though better information and through much improved user experiences with the company. Secondly, digital lowers the cost of the transaction by automating many steps and simplifying the process. Thirdly, digital offers the opportunity to add adjacencies to the product in the form of data. For example, an equipment vendor providing performance data from all its units to its customers to leverage and optimize algorithms.
We note that strategy is also about winning – Having a competitive advantage that prevents your customers from going to the opposition. Digital supports this strategy by allowing you to gain this advantage through extending your apps into the user base to make their selection processes or their maintenance management easier, becoming the industry standard on assessing or evaluating assets, using digital to establish the best customer relations or simply, being the lowest cost supplier because of an astute deployment of digital in your operations.
Strategy is about selection and focus and plays with two hands – Digital transformation cares about selecting the latest technology to lower operating costs, increase quality of delivery and make the sales transaction the least complex. Digital transformation also focusses the organization on developing a culture of continuous improvement. No longer is simple production delivery good enough – every business process has to be improved continuously through digitizing steps and introducing algorithms that can optimize process choices.
Finally, we said that strategy is about speed and agility – Focusing the organization on a narrow the set of plays and executing better than your peers. Speed and agility comes with focus, and we double down with digital to enable that. A digitally enabled business model contains the key elements for speed and agility. Think of operations focusing not on the daily delivery of goods, but on improving that process as a core part of the operation’s culture. Now add to this a continuous improvement culture with the tools and methods of a robust Agile project management system and the organization is transformed into something quite different than what we were used to. Taking all options into consideration, a digital transformation offers the penultimate best choice for organizational renewal and increased performance.
Digital transformation plays directly into the four core objectives of a good strategy. It enhances the value proposition, it improves your competitive advantage, it streamlines your resources, and finally, it is the de-facto best tool for business transformation as it structurally changes how work is done. Here we are concentrating on speeding up the business decision cycles with a dynamic continuous improvement process and an agile execution.
At VCI, we experience the best digital transformation outcomes when clients take the time to wrap their arms around the full scope of the opportunity. We see the least success when digital transformation becomes an IT systems integration project – it is not. Digital transformation starts with a proper Assessment to establish a “one truth” and is followed by a Vision, Strategy and Roadmap. We also see an increased appreciation for a proper Program Management Office to ensure the success of a Digital Transformation.