Digital Change: Realizing the Potential
Digital Transformation (DT) is coming of age. Eighty percent of respondents to a recent IFS Digital Change Survey see themselves as “enabled”, “enhanced” or “optimized” to leverage DT. More impressively, 89 percent say they have “advantageous” or “adequate” funding in place for digital projects—a clear acknowledgment that the time of disruptive technologies is here, and that most firms realize that they need to invest.
Using Digital Transformation to Stay Competitive
But why are businesses investing? The survey finds that 27 percent of companies say digital transformation “makes them more competitive,” giving them a vital differentiating edge; 29 percent see the main benefit as “accelerating innovation” and 28 percent “growth opportunities in new markets.”
Companies using digital transformation to ask far-reaching strategic questions–Can I use DT to get a bigger share of market, or increase my product portfolio?—are making the most of the technology’s long-term, strategic opportunities.
But these companies are in the minority. The largest survey group–47 percent–still see DT’s main benefits as “improving internal process efficiencies.” This begs the question: Do companies see the full potential of what disruptive technologies can achieve?
This could mean that companies are investing the majority of funds in making internal processes more effective and thereby failing to enable innovation. Seeing “improved internal efficiency” as the key reason to explore DT is too short sighted. It fails to exploit the strategic benefits and makes it more difficult to win employee understanding and commitment.
Despite plenty of good news, the survey still reveals that 42 percent of the respondents view “aversion to change” as the main barrier to digital transformation. Companies need to think carefully about how they position IoT and other disruptive technologies, how they tell the story of why they are using them, and how they communicate the benefits to their workforce—transforming staff from “data-phobes” to data fans.
Painting the big picture, and positioning digital change as strategic not tactical, as inspiring not invasive, is vital.
Using Digital Transformation to Stay Competitive
One in three companies responding to a recent IFS survey on digital change are “unprepared to deal with the digital skills gap.” Smart businesses are already spotting potential data candidates who have the appetite and skills to expand their role. How can companies bridge the skills gap affordably, sustainably, and creatively?
Consider how your organizational structure fosters digital development. Large companies have the option of creating new departments dedicated to digital initiatives—hothousing analytic skills and nurturing them in-house.
Conduct digital competence inventory. For companies to succeed with digital initiatives, they need to train staff to manage and analyze data. Establish what technology is key for your company’s development. As part of this digital inventory, start earmarking individual staff members who have the drive to upskill.
Developing skills properly is paramount. HR teams need to decide what current roles need to be developed and where new talent is needed. Bring in external trainers to provide new perspectives.
Work with local universities, both to attract talent and to influence them to focus education programs in the right areas. Placement schemes offer undergraduates real-life programming experience, growing the firm and the student. Apprenticeship schemes discover local talent and give them support and a place to grow.
There are three pillars to succeed with digital transformation—technology, investment, and people. Companies often master the technology aspect most successfully, as it is driven by experts with clearly dedicated areas of responsibility. The main question is whether you are focusing on the right technology to drive transformation at the right time. Do you want to be the pioneer taking risks, or jump on the bandwagon when the technology is more mature?
The survey results show that companies think they are investing enough in digital transformation, but are they focusing on the right areas? The results indicate a heavy focus on process efficiencies, so there could be a need to steer the focus toward more innovation-focused investments.
The people factor is most often forgotten in the digital transformation process. This is significant from both a talent and communications perspective. If more than 40 percent of respondents view “aversion to change” as the main barrier, employee communications is of utmost importance to make sure that your staff knows the purpose of change and how it affects them.
So it’s high time to ask: Where do you need to focus to build these pillars and be successful in your digital transformation?