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Digital Transformation: It's Do Or Die For Companies

30/12/2016 5:54 PM IST | Updated 16/01/2017 8:44 AM IST
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"If you're not confused, then you are not paying attention." – Tom Peters, In Search of Excellence and Thriving on Chaos: Handbook for a Management Revolution

Digital transformation. The more we talk about it, the more companies find themselves confused as they try to adapt to a rapidly changing digital landscape and evolving consumer behaviours—or risk becoming a casualty of the new digital economy.

The new normal

Welcome to the new normal. While the threat is real, the solutions are not out of reach. What is required is a shift in "ways of working" and a commitment to adopt a mindset of re-learning everything you think you know every two years—adapting to the new normal of high uncertainty, complexity and ambiguity. Getting comfortable with discomfort.

To remain competitive, we all need to accept the reality that historically successful business strategies may be disrupted, requiring a radical re-assessment of the business model itself.

Enterprises everywhere are under intense pressure to innovate, as companies strive to meet customer expectations for more personal, relevant and effective engagement across the entire customer journey. Legacy technologies, infrastructure, processes, and ways of working that maintain the status quo (bureaucracies, waterfall development, command-and-control structures) are still rampant, despite their liability in this battle. These disadvantages are creating challenges across all sectors, which share these characteristics:

  • Siloed organisations that don't communicate and lead to...
  • Long cycle times, which miss opportunities and lead to...
  • Initiatives that stall or have little to low impact on the business

Digital imperatives

Companies that are making the shift are incorporating new strategies into their digital transformation efforts. There are many to consider, but here are four to put near the top of your list:

1. Prioritizing digital

A recent PWC study reported that 86% of CEOs consider digital their #1 priority. It's clear that digital transformation will, by necessity, be at the centre of your company's business strategies if it isn't already. The ubiquity of mobile devices around the world has provided customers with unprecedented access to information, completely transforming how they perceive value as well as their expectations of companies they choose to have relationships with.

It's easy to see why CEOs view data-driven customer engagement as the most important part of their mobile strategy—it is essential to providing consumers with the type of relationships that they want to have with companies. Responsive organisations are succeeding by adapting seamlessly across the digital landscape while addressing, in real-time, changing consumer behaviors and needs through co-ownership of the value ecosystem. They all share the same characteristics:

  • They are obsessed with their customers;
  • Hypersensitive to friction—across systems and operations as well as user experience
  • Open and connected—with content, products and services designed to meet the changing needs of their customers; they are comfortable with the rapidly changing digital landscape.

2. Develop a "Renew-New" strategy

A major part of the challenge most organisations face is their landscape of legacy applications, systems and infrastructure. Processes that were, for the most part, built for yesterday were designed to address a very specific set of circumstances—ones that no longer exist or have lost relevance—leaving businesses playing catch-up with the new digital economies of consumption.

We need to adopt a student mindset, and embrace the notion of learning and re-learning, ever shifting and growing with the pace of change.

Additionally, the shift from enterprise to consumer-grade technologies, while lowering costs overall, is also leveling the playing field, allowing smaller, nimbler, startups to compete with legacy enterprise. To succeed in the ever-evolving, digital world, companies need to adopt a "Renew-New" strategy to renew their legacy landscape while simultaneously creating new technologies and processes to match the accelerated pace and increased competition.

3. Adopt platform thinking

A perfect storm of transformative technologies, including cloud, mobility and social, is driving the adoption of platform thinking. Some of the fastest-growing companies in the past 10 years (digital natives)—Airbnb, Apple, Amazon, Facebook, Google and Uber—leverage this approach to create an infrastructure that enables dual roles—where producers and consumers (and businesses-to-businesses) can interact to create shared value in a way that was not previously possible.

By establishing a platform on which others can build, business value will increasingly come from creating opportunities in which others can create value, thereby widening the pool of producers/creators.

4. Combinatorial innovation

With the power of personalisation, automation, machine learning and mobility, consumers are increasingly expecting real-time responsiveness as well as the anticipation of their needs: from knowing when a doctor's appointment is needed or the immediate processing of an insurance claim, to creating more efficient cities and leaner, responsive enterprises.

The digital norm for organisations is shifting, resulting in a massive chasm between the progressive and status-quo.

The IoT and data technologies are impacting our world in ways we hadn't thought of. Artificial intelligence, augmented reality, virtual reality, machine learning and automation are all playing roles in driving productivity and improved customer experiences. For instance, Skype Translator is leveraging machine learning to offer voice-to-voice translation for eight languages, with an additional 50+ available for instant message (IM) use. Such technologies are certain to have far-reaching implications, not just in social discourse, but in international commerce, seamlessly removing language barriers from global communications. No matter what your industry, from automotive and healthcare, to energy and financial services, there will be an IoT application for every type and line of business.

As new technologies and trends become a part of the larger conversation surrounding digital transformation, the need for ongoing, strategic assessment is imperative. The digital norm for organisations is shifting, resulting in a massive chasm between the progressive and status-quo. Widespread digital transformation is inevitable.

To remain competitive, we all need to accept the reality that historically successful business strategies may be disrupted, requiring a radical re-assessment of the business model itself. We need to adopt a student mindset, and embrace the notion of learning and re-learning, ever shifting and growing with the pace of change.

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