The Merriam-Webster Dictionary notes that the term “by the numbers” means “in a way that follows the rules or instructions but that is not interesting or original.” Nevertheless, pundits continue to write articles stressing by-the-numbers thinking to help advance digital transformation (DX). To be fair, those articles don’t stress uninteresting or unoriginal ideas. Rather, they focus on foundational concepts upon which successful digital transformations can be built, such as, digital transformation strategies, stages, pillars, building blocks, and layers. In this article, I want to examine some of the commonalities found in those articles. As I do so, readers should remember that digital transformation is a journey, not a destination, and that it involves a lot more than implementing new technologies or following by-the-numbers roadmaps.
Tricia Wang (@triciawang), a self-described Tech Ethnographer & Sociologist, explains, “A lot of companies treat digital as if they are ‘doing digital’ — this is ‘digitization’ at its worst — as if it’s some checklist of things to do. It’s very transactional, and people are so busy doing digital they don’t even know WHY they are doing it in the first place! Whereas [some companies] embrace ‘being digital’ — this is ‘digital transformation’ at its best — it’s 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.”[1] If that’s sounds like taking on a difficult challenge, it is. Nevertheless, it’s an essential challenge in today’s business environment. Mark Minevich (@MMinevich), a Digital AI Innovation Strategist, explains, “Digital transformation has become a business imperative in the wake of the pandemic. Companies that have not modernized their processes and integrated cloud and analytics capabilities are severely disadvantaged.”[2] In this initial article, I will explore some recommendations for getting started. In the concluding part of the article, I will explore how pundits suggest companies should proceed on their digital transformation journey.
Exploring the Numbers: Getting Started
5 Reality Checks.
Before beginning your digital transformation journey, Anurag Shah (@anuragkshah), Vice President and Head of Products and Solutions (Americas) at Newgen Software, recommends obtaining a clear vision of why your company needs to transform. He writes, “Nearly all enterprises recognize the need to transform. The key, however, is to concretely define what this transformation means to the organization in question.”[3] He suggests that making five reality checks will help your company draw a better transformation roadmap to follow on your journey. Those reality checks are:
1. Define the context: Ask what is unique to your organization. Shah writes, “[Let] go of the temptation to look at what others are doing and where they’re succeeding. Instead, focus on identifying what uniquely defines your organization’s context.” Minevich suggests part of your reality check should include understanding where you currently stand. He explains, “The first step is to conduct a digital audit. This will help businesses identify areas where they need to improve and make changes. It is essential to have a clear understanding of the current state of affairs before making any decisions.”
2. Look outside-in: Holistically define your transformation goals. “Redefine the value chain,” Shah writes, “and explore business models that go beyond your immediate organization. An effective transformation is multi-faceted. This means that the outcome, too, is a combination of multiple goals that must be synergistically linked.”
3. Assess the “to-be” organization fabric and technological architecture: Establish a roadmap to get there. “Identifying holistic goals is one thing; the ability to transform into an organization that delivers them is another. Often, enterprises get stuck in their transformation initiatives due to the baggage and inertia of their years of existence. … A well-defined blueprint of how the to-be organization looks and behaves — structurally and technologically — goes a long way toward the success of such initiatives. … This roadmap must detail how the various aspects of your business would change: organization structure, functions, roles, people, processes, systems, and technology.” Minevich agrees that a roadmap is a good idea. He explains, “This will help map out the journey and ensure that all stakeholders are on board with the plan. It is essential to have buy-in from everyone involved to make the transition successful.”
4. Explore opportunities to become a platform company. According to Shah, “A platform company leverages assets outside the organizational boundaries to create value that has a multiplier effect. A quick glance down the list of the largest market cap organizations today reveals that a majority are platform companies in the way they leverage resources — including customers — to create revenue opportunities and, in essence, change the way people live and work.”
5. Think big. Start small. Build and expand as you go. Be agile. “An ambitious big-bang approach is daunting as well as risky. It is also important to consider that DX is not a one-time exercise but a journey. Speed and agility are critical. Identify early focus areas for quick wins. Early wins help gather momentum and broader acceptance of the impending changes across the organization.” At Enterra Solutions®, we call this a crawl, walk, run approach.
3 Simple Strategies.
Once you are clear-headed about your vision and know the general direction in which you are headed, it’s time to develop strategies that will take you where you want to go. The first hurdle you may face is the people in your organization. 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.” That observation is as true today as it was then. Victoria M. Grady (@pivotpnt), President of PivotPoint, and Patrick McCreesh (@PatrickMcCreesh), Managing Principal of Simatree, note, “Change doesn’t happen overnight. The key to success is the ability to adopt and use new forms of technology. And that means your organization and your people need to overcome a common hurdle: the belief that technology alone will solve all problems.”[4] Getting people onboard with your plans isn’t always easy. Grady and McCreesh suggest using “three simple strategies to overcome the technology fallacy and get your organization and your people on board.” Those strategies are:
1. Redesign the business around a new way of working. “Digital transformation is the use of technology to strategically redesign the work of an organization. But when people believe that digital transformation simply entails the purchase of a new software or platform to manage a portion or all their business, they’re missing the point. Digital transformation involves a holistic redesign of the business around a solution. Processes and roles will also shift, but it is better to design a solution around realistic ideas than to pay for a system and expect it to solve problems without people.”
2. Factor in the workforce. “Even the most robust platforms today require significant process changes to achieve a successful implementation. This simple difference in perspective immediately reveals the importance of people in digital transformation. There is simply no way to realize the value of a digital transformation without bringing people along for the journey.”
3. Involve the workforce throughout the process. Grady and McCreesh cite Gerald Kane (@profkane), a Professor of Information Systems at the Carroll School of Management at Boston College, who points out, “Your people will fuel — or thwart — your digital transformation.” Grady and McCreesh add, “When organizations deploy new solutions, they expect a return. The return is never realized when people fail to adopt. So in this sense, the solution is never the technology. The solution is how people leverage technology to work differently.”
Concluding Thoughts
The most important step you will ever take in your digital transformation journey is the first one. Shah, Grady, and McCreesh provide some excellent suggestions about how to proceed with other steps once you’ve decided to take the first one. Perhaps their most important insight is that people matter even more than technology. As Grady and McCreesh explain, “The full value of true digital transformation will succeed only with a complete understanding of the human side of the equation.” Shah concludes, “While these are the initial steps, they go a long way in establishing the long-term capability of a continuously transforming organization.” In the concluding portion of this article, I will explore some of the other numbered steps experts have proposed relating to the long-term digital transformation journey.
Footnotes
[1] Trevor Miles, “Let’s be clear: Digitization is not the same as Digital Transformation,” Kinaxis Blog, 8 December 2017.
[2] Mark Minevich, “What Does It Take For Enterprises To Succeed In The Digital Age?” Forbes, 1 June 2022.
[3] Anurag Shah, “Digital transformation: 5 reality checks before you take the plunge,” The Enterprisers Project, 25 May 2022.
[4] Victoria M. Grady and Patrick McCreesh, “Digital transformation: 3 simple strategies to get yours moving forward,” The Enterprisers Project, 23 May 2022.
