A few weeks ago, I hosted an event in New York City in which clients were asked to discuss their digital journeys so far. Some shared their wins: A retail client proudly described how, in its efforts to implement an omnichannel experience, it changed every process of a business lifecycle across an entire division. Another “win” was a technology provider whose simplification of its IT infrastructure led to a complete digital transformation across the enterprise.
Others told tales of woe. A banking organization, for instance, explained that a branch modernization initiative ended up improving customer experience only on certain branch operations. An insurance customer, meanwhile, elaborated on its struggle to bring its business, IT and operations teams together to better understand the proposed system processes.
Lessons Learned from Wins and Losses
Listening to these varied stories, it became very clear what the root causes of success and struggle were. Here are the key takeaways.
- Without IT simplification, digital transformation is guaranteed to fail. Successful business leaders understand that simplification leads to optimization, which in turn accelerates digital adoption. Each should be the byproduct of the other. Among our clients, when the two didn’t successfully go hand-in-hand, the main reasons were growth, M&A, lack of collaboration and cost pressures Also, the CxOs tended to focus on simplification across all legacy systems and applications, while for digital initiatives, they focused only on select challenges.
- When transformation is the goal, sometimes only optimization is achieved. On the digital front, reformation of any business process, technology or operational model that improves customer experience can be considered game-changing; everything else is step-change optimization. Coincidently, every one of the successful digital initiatives presented at our event addressed all three layers of the enterprise: the business model, operating model and technology models. Those described as struggling attempted to address only a portion of the business lifecycle and ended up as an optimization exercise.
- Winning in the digital era requires a digital culture.Some of the successful digital initiatives quickly eroded because the organization could not institutionalize cultural change across the corporation. (Read more on building a digital culture.) When part of the company nurtures a digital culture and the rest doesn’t, issues on budget, talent and resistance to change all emerge, leading to siloed organizations. Strong sponsorship, the addition of key roles, aggressive organizational reskilling and effective employee-engagement practices all help nurture a culture in which digital can thrive.
- The understanding of digital can vary within the organization.For an organization to reinvent and redefine its business model, cross-departmental collaboration is critical. In large corporations, aligning the understanding can be a challenge. Successful organizations choose an end-to-end business process and then align the business, operational and technical layers to reinvent them.
- “Simplify, modernize and secure” is the successful combination.When dissecting the details of the successful digital transformation initiatives, it’s quite clear that CxOs have abided by our mantra of simplifying, modernizing and securing the IT backbone. This, we believe, is a fundamental tenet of holistic digital transformation. In our experience, these three elements advance customer experience improvements, lower cost of ownership and accelerate time to market of modern digital products and services.
Accelerating into the Future
The world of business has undergone multiple transformations since the advent of corporate computing over 50 years ago. The principles are the same in every cycle, but the pace of change and the level of impact has increased manifold.
Whatever we may want to experiment with, we better do it fast. As Jeff Bezos said to shareholders in Amazon’s 2017 annual report: “Being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.”
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