Digital transformation efforts are underway in most organizations today as digital leaders are uncovering new opportunities that create added value and better ways to engage with customers.
Businesses are in various stages of using digital advancements to better compete. Some organizations are in the beginning stages while others are evolving into digital masters as they implement new innovative digital growth strategies to adapt to emerging trends.
Although there are many different dimensions to digital transformation, here are some of the key areas that leaders are considering when using digital for strategic advantage.
Digital isTransforming Industries and Reinventing Organizations
The competitive environment is in perpetual motion. Global competition and digital capabilities are blurring industry boundaries, disrupting business models, redefining products and services, and transforming customer relationships:
Digital is Changing Customer Relationships, Operations and Business Models
In the early days of digital transformation, standardization became the mantra, which, with time, created efficiency but also with time, stifled employee creativity. As a result, business flexibility actually declined for businesses digitizing their operations. Today, organizations that are gaining higher value from their digital transformations are redesigning their operations and taking advantage of digitalization by enabling innovation, creativity and collaboration among business units,employees and partners.
Digital transformation and improvements are focused in three areas:
Digital Mastery is Transforming Organizations into Industry Leaders
There are digital maturity models that are evolving that leaders can use as planning tools to assess their digital needs, processes and standards. By using a best-practices framework, leaders can move from being tactical and reactive to the pressure of becoming more "digital" to being more proactive, innovative and strategic.
According to a study by CapGemini and MIT Research, digital masters were 26% more profitable than their peers, and generated 9% higher revenue from their physical assets. They classified companies into four levels of digital mastery:
Some barriers to digital mastery include:
Organizations who understand these barriers and take time to analyze the issues and gaps they face, can take steps to raise their maturity level and progress toward becoming digital masters.
Digital is Creating a Paradigm Shift in Organizational Cultures and Leadership
The most effective way to undergo a digital transformation is to endorse it from the top down To do so requires envisioning the future state, engaging the entire organization and collaborating with internal and external partners to leverage technology and digital transformation strategies.
Companies undergoing a digital shift in leadership are creating digital leadership roles, and are determining how to best organize digital teams.to ensure the effective coordination of efforts and conversations across the company are taking place.
Some companies like Zappos recently created a complete shift in their leadership model and moved from a model of hierarchy to one referred to as Holacracy, which distributes power to all employees and reduces bureauracy. The model empowers employees to self-manage their work and creates a more agile and innovative environment.
To make a shift to digital, leaders need to change their thinking in how they approach the following areas:
Digital today requires innovation, creativity, partnerships and a shift in thinking from process-led transformation to a technology, people-led continuous improvement model. It focuses on a customer centric value network paradigm that embraces flexibility and enables the implementation of continuous change as a competitive advantage.
Digital Success Requires Taking Action and a Forward Movement Plan
Becoming a capable leader in the digital age absolutely requires forward movement to start. Some companies start small to focus on reshaping a specific business unit or product line to fuel innovation and digital agility. Others have experimented by using digital models in collaboration with partners to offer a specific product or service.
However, those that have truly transformed and are evolving into digital masters are reshaping their thinking across their business and are evolving one level at a time. They are committing to a digital-first agile culture and are fostering new ways of working between business units and IT groups.
Digital transformation is happening at an ever-faster pace today across all major industries in organizations. However to build digital mastery takes time. Three-dimensional printing, robotics, artificial intelligence, wearable technology and augmented reality are no longer science fiction. The Internet of Things is introducing the next evolution of the connection between people, places and things. Mobile is taking the lead and there is a clear shift in the way digital channels are being utilized.
Commit to your digital journey as soon as possible. Evaluate your needs and issues and develop a plan to move forward based on the organization's digital maturity level. With the proper understanding of your gaps in each of the focus areas and a shift in thinking towards a digital culture, you can make change happen one step at a time so you can reach your longer term vision and effectively succeed in time!
Rania Kort is an Independent Management Consultant and Business Advisor with more than 20 years’ experience helping Fortune 100 companies successfully implement strategic initiatives. Rania has managed large-scale programs and programs, established and run PMO's and implemented process improvement in many different industries. She ran and grew an IT Management Practice for PricewaterhouseCoopers for more than seven years managing over 300 consultants. Currently, she serves as an independent consultant focusing on achieving results through collaboration and a team leadership approach that ensures alignment, accountability and trust to develop high-performance teams.