When it comes to digital transformation, strategy is vital

Matteo Kotch

November 12, 2019

Organizations globally need to modernize their business and operational processes. A sound strategy is vital to transform to a fully-digitalized enterprise.

Back in late 2018, when I wrote my first blog detailing the five steps that businesses need to consider before embarking on a digital transformation (DT) journey, I underestimated just how much of a hot topic it was. Now, having extensively researched it, it has become increasingly apparent that DT is more than just a ‘buzzword’. Businesses around the globe are actively seeking ways to modernize their business and operational processes and have even employed individuals whose sole purpose it is to manage the organizations’ complete transformation. Some examples of this include the ‘Director of IT and Digital Transformation’, ‘Head of Digital Transformation’, and ‘Principal, Digital Transformation’, but ultimately all digital transformation initiatives are driven by the CIO (ALE, ‘The CIO’s role in an era of digital transformation: Swimming with the Digital Sharks’ whitepaper).

While I’ve already elaborated on the first two steps in previous blogs, in this one we explore how once an organization has identified that it needs to embark on a DT (through auditing and benchmarking), it then needs to develop an implementation strategy that identifies the areas, departments, or processes that need to be ‘transformed’ first. While this may seem like a logical way to start, it was only a few years ago that Forrester uncovered that a mere 27%  of organizations had any form of coherent digital strategy in place. In other words, these organizations were making very important decisions and investments without an overarching game plan, which is concerning given how a coherent strategy forms the basis on improving one’s customers’ experience, increasing employee efficiency and accelerating decision making.

With clearly defined budgets and pre-allocated resources, well-thought-out strategies help guide staff with regard to how they manage during this important transition period. A strategy can provide a structure to progress through the many stages and programs required to reach the desired outcome.

As a first step toward creating a DT strategy (and this is somewhat covered in my previous blogs on auditing and benchmarking) a business should carry out an assessment on the digital ‘maturity’ of its organization. Once this has been achieved, the organization will be in a better position to identify the key areas and gaps where it is either lagging behind its competitors or losing money due to inefficient people, processes or technologies. With these gaps identified, the organization can then plan how to address them by involving all key stakeholders to take their objectives into account and set realistic goals.

In 2018 spending on legacy technology systems increased by 13%  over the previous five years. It’s clear that it is time for businesses to stop wasting resources on ‘keeping the lights on’, and start focusing on new initiatives that lead to smarter IT investments that can yield new revenue streams. Senior management needs to make a concerted effort to develop realistic strategies that detail the technological changes or process improvements the business needs to deliver profitable digital experiences. Furthermore, an organization’s ability to hire the best and most technologically adept employees will help facilitate the widespread adoption of these new technologies and it will better position the organization to compete effectively in the constantly changing economy.

Finally, a detailed digital transformation strategy that’s focused on technological or process inefficiencies, as well as a supportive workforce that’s ‘agile, adaptable and engaged with transformation’ , can actually be more important that the technology itself . And, having a committed partner like Alcatel-Lucent Enterprise help you plan that vital journey can ensure a successful transformation from a legacy-based to a fully-digitalized enterprise. Having a strategy is no longer an option, it’s a necessity.

References:

1. Building a Successful Digital Transformation Roadmap, Earley Information Science, [Website]: http://www.earley.com/knowledge/white-paper/building-successful-digital-transformation-roadmap, 2019
2. Spending on legacy IT continues to grow, but there is light at the end of the tunnel, Federal News Network, [Website]: http://federalnewsnetwork.com/ask-the-cio/2018/08/spending-on-legacy-it-continues-to-grow-but-there-is-light-at-the-end-of-the-tunnel/, 2018
3. Why digital transformation requires drastic changes to the workforce, IT ProPortal, [Website]: http://www.itproportal.com/features/why-digital-transformation-requires-drastic-changes-in-the-workforce/, 2019
4. Strategy, Not Technology, Drives Digital Transformation, Deloitte University Press: [Whitepaper]: http://www2.deloitte.com/content/dam/Deloitte/fr/Documents/strategy/dup_strategy-not-technology-drives-digital-transformation.pdf, 2015