As business increasingly becomes digital and data-driven, many companies that once appeared to be built for success suddenly seem to falter and slowdown.
As per a recent study conducted by Boston Consulting Group, over 80% of companies accelerated their transformation projects last year, but 70% of those fell far too short of their objectives.
Digital transformations are now beginning to change every process, from strategy to execution, and are slowly but surely altering every function in an organization. There seems to be a major misconception that many organizations have, where there is a belief that digital transformation means being able to sell online. Whereas, in reality, it means much more. It means understanding the nuances of the digital world and helping to shape newer processes, user experiences, and technology direction over the next few years.
Owners and senior management are now supposed to be the engines of massive change that is unprecedented in the history of IT and business.
In their desire to constantly rationalize costs, many companies seem to operate with the belief that they need to focus only on IT infrastructure and back-office operations more than capturing value from digital technologies.
Even Company boards and owners would need to get a better understanding of managing rapid digital transformation.
The board of a Silicon Valley firm or a good start up usually consists of tech company founders, venture capitalists, and seasoned executives from digital companies, who understand technology as well as the odds of success. In the case of traditional and legacy businesses, the newer generation of owners as well as senior management may need an urgent digital skill-set booster shot.
Not every owner or senior leader is born digital. Many successful ones learn to understand technology on the job. Brian Chesky, for example, of Airbnb, and Sean Rad of Tinder are non-tech entrepreneurs who set up digital giants. They focused on learning about their respective industries by looking at their technology strategy and some have even learned to program along the way.
In the case of traditional businesses and business houses, because of an inherent desire to keep doing business the traditional way, the technology expertise gets located several layers lower in the organization. In such cases, the ownership and senior management lose active involvement in those decisions. The managerial bureaucracy and inter-department rivalry may take over, and technology and user experience decisions will demand lengthy reviews and inter-departmental clearances.
The result: consensus — which sometimes is the enemy of speed and uniqueness.
Digital transformation is about so much more than adopting new technologies and processes. At its core, it’s about overcoming inertia and resistance to changing the way people think and work. The senior management team needs to lead from the front, inspire confidence in the vision, and rally the company to believe in what might appear to be a distant destination.
An obsession with detail is absolutely essential. The devil is always in the detail.
If owners and leaders of the world’s most valuable companies can afford to spend time on product requirements, user experience, and technology, owners and leaders of legacy companies that are playing digital catch-up can hardly afford not to do the same.
Data is truly the new oil, as they say. Traditional data on sales of any product, for instance, provides insights on what brands are selling, in which geographies, and in which segments. Typically, such insights come from analyzing aggregated after-the-fact data across categories of products, geographies, or segments. Such insights have typically been shared in daily, weekly, or monthly reports.
Traditional legacy firms closely guard their traditional data for competitive reasons. They rarely share this data externally. Even internally within firms, their aggregated analyses and reports are often shared selectively.
Whereas, the future is only Real-time interactive data. This can be shared widely, even with third-party entities. In fact, sharing amplifies its value. As more connected entities become available to complement user experiences, the more real-time data’s value can be amplified when shared with those entities.
Real-time interactive data is inherently transient. Its value from sharing exists only in real time. Moreover, because sharing amplifies its value, there is an added incentive for firms to share real-time data.
Real-time interactive data sharing is also possible because of an explosion of connected IoT devices in recent years. Around 30 billion connected assets are expected in the coming years, creating vast opportunities to tap interactive data for richer customer experiences and business scope expansion.
Shifting from traditional, old type of collection of data to interactive data is not easy. Neither is it going to be a cheap exercise. Yet it is an essential part of a traditional firm’s digital transformation initiatives.
To remain relevant in the modern era, traditional firms can, and must find ways to tap the power of interactive data.
Yes, its probably time that many small, medium and large enterprises in our region get themselves a digital skill-set booster shot.
And yes – holistic digital transformation of an organization, and online selling are two different things. Online selling is only a small part of the digital transformation process.
CONSULTANT DIRECTOR | MEMBER UAE SUPERBRANDS COUNCIL | CHARTER MEMBER – TIE DUBAI