According to Yossi Sheffi (@YossiSheffi), Director of the MIT Center for Transportation & Logistics, big data is an organization’s most valuable asset. He writes, “The well-worn adage that a company’s most valuable asset is its people needs an update. Today, it’s not people but data that tops the asset value list for companies.”[1] When data becomes a business’ most valuable asset, then becoming a digital enterprise must be its most important priority. Digital transformation (DX), however, can be painful. How painful? Think about all those werewolf horror movies and the agony a person goes through as his or her bones bend and stretch to fit their new form. That’s what digital transformation can feel like. Tricia Wang (@triciawang), a self-described Tech Ethnographer & Sociologist, explains, “‘Digital transformation’ at its best [is] a total paradigm shift in the culture and operations — it’s not just about buying the latest digital tool, but about creating a new system, new cadence, new mindset.”[2] Most experts agree that in spite of the pain, the effort is worth it.
The DX Imperative
“Companies have been working to become more data-driven for many years at this point,” writes Randy Bean (@RandyBeanNVP), Founder and CEO of NewVantage Partners, “with mixed results.”[3] He adds, “These efforts play out over time in organizations, and persistence, resilience, execution, and a relentless drive to employ data to make more informed business decisions are what distinguishes those companies that prevail from those who continue to struggle.” Bean isn’t the only expert who believes hard work and perseverance is required to make digital transformation successful. Cobus Oosthuizen, country manager and managing director for Africa and Middle East at Siemens Digital Industries Software, explains, “Clearly, we have some mountains to climb on our path to the future.”[4]
Despite the challenges, the Automation.com team reports, “87% of enterprises are now pursuing digital transformation.”[5] They add, “The majority of enterprises are actively pursuing digital transformation to gain a competitive edge in today’s increasingly digital business environment, and even the 41% in the early stages of the effort are seeing a measurable return on investment, according to a new IDG Research Services survey commissioned by Insight Enterprises. The largest improvements cited by respondents include quality of service (44%) and user experience/satisfaction (40%), followed by business continuity (35%), cost efficiency/savings (34%), resource optimization (33%), increased agility (32%) and increased innovation/creation of new revenue-generating products (32%).” Needless to say, so many enterprises wouldn’t voluntarily undergo the pains of digital transformation if they didn’t believe the end goals were worth it.
Dealing with the DX Pain
Although most digital transformation discussions understandably focus on technology, change managers know that a more holistic approach is required — an approach that takes into account technology, people, and processes. Below are some expert suggestions about how to ease the pain of digital transformation.
Technology
Digital transformation begins with identifying the data needed to make better decisions. After all, the primary goal of DX is to create a data-driven enterprise. Once the necessary data is identified, how to connect that data to the right decisionmakers becomes a major consideration. Legacy systems can be a problem. “Any major business change that includes growth pains,” writes Etay Maor, Senior Director of Security Strategy for Cato Networks, “will put companies on the road to digital transformation at a more rapid pace than legacy systems can keep up with.”[5] One way to ease the pain, he insists, is to ensure that the network infrastructure providing the digital transformation backbone is up to snuff. He explains, “[A] DX project may be unique, but the underlying network and security challenges are largely similar.” He suggests creating “a single, unified architecture that connects and secures the entire enterprise — sites, cloud resources and remote users — regardless of location. This way, no matter the challenge, IT is ready.” The architectural backbone is essential in a digital world in which data is a precious resource.
Oosthuizen suggests creating a digital twin will also ease DX growing pains. He writes, “Enterprise-level digitalization and the creation of a comprehensive digital twin will make climbing those impending [DX] mountains a whole lot easier, connecting teams and ideas, accelerating the development of advanced products, and enabling greater levels of efficiency and productivity throughout the lifecycle. Digitalization, or digital transformation, is all about creating digital threads between siloed or disparate areas of data and functionality. It is precisely at these intersections that the greatest opportunity for innovation lies to achieve greater performance, sustainability and efficiency.”
People
Bean notes, “Right now, the biggest challenge for organizations working on their data strategy might not have to do with technology at all. … Cultural change is the most critical business imperative. It’s an understandable problem: to a degree that is perpetually underestimated, becoming data-driven is about the ability of people and organizations to adapt to change.” Arun ‘Rak’ Ramchandran (@raknz), Global Head of the Hi-Tech, Platforms & Professional Services (HTPS) Vertical Business Unit at Hexaware, suggests five pitfalls that should be avoided during digital transformation efforts that will ease the pain for employees. They are:
1. Forgetting it’s more than the technology. Ramchandran writes, “Business needs are important. Before starting a digital transformation project, leaders must understand why it is being done, along with the desired objectives and the expected business outcome. Consider the impact that transformation is likely to have on stakeholders beyond immediate users. Some digital transformation efforts are initiated because someone is enamored with an emerging technology or tool and simply wants to deploy the ‘shiny object.’ Before embarking on a new initiative, make sure you fully understand its implications, and whether it will provide a good return and serve a legitimate business need.”
2. Ignoring the employee experience. Centuries ago, Niccolo Machiavelli, in his classic The Prince, wrote, “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things, because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new.” The experience of older employees should not be ignored when making DX decisions. They may provide more insight than you think. At the same time, you must take into consideration the experience of so-called digital natives. Ramchandran explains, “Workers under 30 years old are becoming a majority of the workforce in most large enterprises. … Their experience and expectations are different from those of the executives making budgeting and other decisions. These workers want real-time, fast-paced, intuitive technologies, like apps that can be found on the AppStore.”
3. Neglecting change management requirements. Leadership is always important. Change management leadership is critical. Ramchandran notes, “Especially for remote and hybrid workers, change management and digital transformation efforts need to include seamless employee onboarding and easy access to productivity and workflow tools so that employees can maximize their productivity.”
4. Failing to train employees on digital tools. Employees who aren’t comfortable with digital tools won’t use them. Ramchandran explains, “Leaders and employees alike must fully understand the tools used in digital transformation, along with their benefits — otherwise, they are unlikely to adopt new ways of working and the organization will not gain the benefits of digital transformation.”
5. Forgetting that digital transformation is a journey, not a destination. There is truth in the old saying, “Change is the only constant.” Ramchandran observes, “Digital transformation is an ongoing process. Change will be constant, and there will be no endpoint. Keep this in mind as you start your journey.”
Processes
Because every business’ processes are unique, they must decide where digitalization and automation work best for them. Just keep in mind what Bill Gates (@BillGates) once noted, “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” By first automating processes you know work correctly, you can avoid some of the pain associated with digital transformation.
Concluding Thoughts
Bean writes, “There are three indicators of progress that stand out among the surveyed organizations. First, achieving data-driven leadership remains an aspiration for most organizations — just 26.5% of organizations report having established a data-driven organization. Second, becoming data-driven requires an organizational focus on cultural change. … This is not a technology issue. It is a people challenge. Lastly, organizations are establishing the leadership function — in the role of the Chief Data and Analytics Officer — which will provide the foundation for becoming data-driven.” He goes on to note:
“It doesn’t help that the task of being data-driven keeps getting harder. Today, corporations encounter vast new volumes of data, as well as new sources of data, which include sensor data, signals, texts, pictures, and other forms of unstructured data. … Data cuts across traditional organizational boundaries, often without clear ownership. The fluidity of data compounds the complexity of managing this asset in a way that consistently delivers business value. Furthermore, there is one rapidly emerging concern that confronts every business these days when it comes to the ownership and management of data. That is the assurance of responsible and ethical data use.”
Despite the pain and the challenges associated with digital transformation, most experts insist its a journey that must be taken. Maor concludes, “At this point, everyone knows what digital transformation involves. It’s how one takes the journey to get there that can make it either a pain or a totally worthwhile endeavor.”
Footnotes
[1] Yossi Sheffi, “What is a Company’s Most Valuable Asset? Not People,” LinkedIn, 19 December 2018.
[2] Trevor Miles, “Let’s be clear: Digitization is not the same as Digital Transformation,” Kinaxis Blog, 8 December 2017.
[3] Randy Bean, “Why Becoming a Data-Driven Organization Is So Hard,” Harvard Business Review, 24 February 2022.
[4] Cobus Oosthuizen, “How going digital is the best way forward,” Gulf Business, 15 March 2022.
[5] Staff, “87% of Enterprises Now Pursuing Digital Transformation,” Automation.com, 9 February 2022.
[6] Etay Maor, “Curing The Pains Of Digital Transformation,” Forbes, 15 February 2022.
[7] Arun ‘Rak’ Ramchandran, “Digital transformation: 5 ‘human’ mistakes to avoid,” The Enterprisers Project, 16 March 2022.
