Digital Transformation
Digital Transformation
It is undeniable that you have undergone a digital transformation. What is going to happen now?
The digital transformation of an organization should not be attempted by a single management team. In order for transformation to become a reality, it is necessary for people throughout the organization to be deeply engaged and to feel a sense of ownership. According to a recent McKinsey survey, this has long been a missing piece of many corporate efforts — and it appears to be beginning to show in some cases.
McKinsey analysts believe that the average success rate for transformation has remained consistently low over the last several years. It is reported that less than a third of respondents who have undergone transformation in the last five years believe that their efforts have been successful in terms of improving the overall performance of their organizations and maintaining any gains. The authors go on to say that "even successful transformations do not always result in the realization of the full financial benefits." Their conclusion is that the value derived from these efforts tends to deteriorate over time, which they believe is a problem.
In this context, the challenge is to keep people engaged – and yes, even excited – about the direction their organizations and careers are taking as we move forward into the digital twenty-first century. Successful organizations in the coming months and years will be technologically adept, but they will also place a strong emphasis on their employees. An adjustment in perspective is required, including the creation of intrinsically rewarding work environments, as well as an increase in entrepreneurial thinking and idea sharing.
It will be difficult for leaders and managers to maintain a competitive advantage with the people who can assist them in delivering goods and services to their customers after the two-year digital transition has been completed. In order to achieve this, new modes of operation and new attitudes toward work are required. Recently transpired events have demonstrated that "it is no longer about the technology you have, but rather about how you intend to use it," according to Avi Kulshrestha, president of Amdocs Global Services. Transformations necessitate the development of new ways of thinking, even if this necessitates taking risks and venturing into the unknown.
According to Bob Pryor, CEO of NTT Data Services, "digital transformation is only a small part of the story." In order to improve our productivity and efficiency, we're changing how and where we work. Businesses are experimenting with hybrid work models to give their employees – as well as the clients they serve – the option of working remotely or in person to collaborate more effectively. Other business models and industries such as telehealth and sports fan engagement are expected to continue to be successful in the future as a result of this realization. More strategies for optimizing their use are now possible, thanks to the increasing number of businesses that have implemented their technologies – but with a crucial reminder to keep people at the forefront of the process as things evolve.
In the words of Stephen King, president and chief executive officer of GrowthForce, today's digital behemoths such as Amazon "have altered customer expectations across every industry." At the moment, service businesses are in the process of going through a radical transformation. Field service platforms are completely integrated into websites and accounting systems, and they are used by a wide range of businesses, from small two-person plumbing operations to large national chains and corporations. A more positive client experience is achieved through improved dispatching, quality control and automation of accounting, as well as an increase in customer engagement."
According to Pryor, "the companies that will set the pace in the digital twenty-first century are those that think several years ahead." A gap that we are seeing today is in the continuity and long-term viability of many businesses' operations; the pandemic has shed light on opportunities that had previously gone unnoticed." In the case of data analysis and interpretation, many businesses have realized the importance of more accurate and effective data analysis and interpretation. An industry-wide ranking of data literacy skills revealed that the healthcare sector was at the bottom of the list, according to a study we conducted last year. "Approximately a fifth of respondents reported that they did not understand how to read, create, and communicate data as information."
While this is true, it does not follow that digital capabilities should be added on top of an already existing culture. To do so, Kulshrestha says, organizations must provide opportunities for ongoing learning among employees. Leaders are discovering a greater need for a diverse set of talents and knowledge across teams as the number of new applications and processes increases. Leaders are keeping an eye on new methodologies such as DevOps, technologies such as microservices, and journeys such as cloud migration, among other things. The areas highlighted above will help to ensure business agility, as well as preparing employees to respond to new realities and the next major disruption."
What does King Says?
As King points out, innovative leaders recognize the importance of looking to their employees for "decision-making to assist them in identifying their best customers and projects, as well as services, while emphasizing innovation." They are looking at profit margins rather than top-line revenue to determine the difference between projects that achieved their target profit margins and those that fell short of covering their share of overhead expenses." Specifically, is it pricing and scope creep management, employee training and core competencies, differences between industries, or differences in value propositions to blame? Culture, employee engagement, recognition, and wellness opportunities are all being scrutinized more closely by a growing number of businesses."
The authors of the McKinsey study encourage leaders and managers to stay on top of the transformation process as it unfolds, and to ensure that their employees are fully engaged in it. Their advocacy is for instilling confidence in the business by conducting a comprehensive fact-based assessment of the business in order to identify areas that can be improved. In addition, they advocate for the adaptation of goals for employees at all levels, regardless of their position. "It is insufficient to establish transformational goals that are both effective and audacious. When it comes to their day-to-day jobs, people must understand what these goals imply and what they will be expected to do differently; if they do not understand how their behaviors and work processes will change as a result of the transformation, their behaviors and work processes will remain unchanged." Besides that, they believe that the best performers should be assigned to the most important initiatives. "Develop a clear understanding of where value is generated within the organization and who possesses the experience and skills necessary to deliver that value," says the author.
Pryor agrees that "falling behind on digital transformation initiatives" is one of the most significant risks facing the United States in the months and years ahead.
To keep up with the rapid advancement of technology, Kulshrestha believes it is essential to cultivate a culture of continuous self-learning. "This provides business leaders with an opportunity to strengthen their organizations from the inside out, focusing on infrastructure and the team that drives the organization forward."
