I don’t like the term “digital transformation” all that much – and it is no big secret . My views are fairly public on why the term is misleading . That said , the term is indeed very popular and I get asked frequently about critical success factors as they apply to digital transformation .
My view – simply put – is that it is more about managing transformation (as in change) , and less about digital (as in technology).
I routinely talk to leaders at my clients who proudly tell me that they have started a Hadoop initiative or IOT project to kick start their digital transformation . I share their enthusiasm – mostly because I know how difficult it is to find budget for new initiatives at many of these companies . But I also know from experience that this is only a very small first step .
I put forward a simple three question framework to get to a common understanding of whether a transformation initiative has a chance to succeed
1. Are we solving the right problem ? Or are we solving a random problem the best way we possibly can ?
Here is an example from recent experience . Data scientists and Hadoop experts created an amazing “churn analysis” model for a business . Customer loved it – but that project never went very far . Why ? Simply because this customer already had the lowest churn in their peer group of companies . This was not the right problem for the top management to worry about . All that happened was that we found an optimum solution to something that they didn’t really care about .
2. Why should users switch to a new solution now ?
The CEO or CIO might see the tremendous value in analyzing all kinds of data and deriving deep insights . But when an analyst who has a well developed process of preparing , analyzing and reporting data a certain way for ten years might not see any reason to switch to an unknown new process .
It’s not enough that users will eventually use the new solution – they need to do it “now”. Are there incentives for them to switch fast ? Inertia kills !
3. Can the solution scale and stick around for a while ?
Not just about scaling technology – but can this solution work everywhere (or in most places ) that we do business ? And is it flexible enough to not need a full redo in near future as business evolves? A transformation should result in something that is both effective and efficient !
Of course there are a hundred other questions to ask and answer about such initiatives – but in my experience , these three will set the right expectations with all the stakeholders quickly and also set the stage for follow on explorations . Worst case , it will still save you time spent chasing the wrong things .
Where should transformation focus ?
A lot of transformation initiatives tend to focus on changing the technology and the processes , and not as much on people . This is also why most of these transformations fail, even though the original proofs of concept were declared a success .
Example – This lack of focus on users is also the number one reason why self service reporting solutions don’t live up to their full potential is most cases – users just don’t see a reason to switch and suffer from a temporary loss of productivity . And very few leaders have the guts to switch off the legacy reports and “force” users to leap into the new world :)
When there are two ways of doing something !
Technology and process will evolve faster and faster with time -but human beings won’t change that fast if they have a default option of sticking with what they know . This is why startups generally have an inherent advantage in shaking things up in the world compared to an established company .
Why do more people rave about uber as opposed to say GE when it comes to transformation ? Disruption is always easier when you need to disrupt others without needing to disrupt yourself .
It’s not as if larger companies have no chance to transform – it just is more painful . Many companies have successful incubation programs in place to nurture new ideas . Integrating the good ideas past incubation into mainstream business is where there are not as many success stories available today . That should change over time .