Clear vision and goals
Digital transformation demands executive vision and leadership. You must have a clear vision for what you want to achieve and set goals that will help you achieve that vision. Management must lead from the front and consistently articulate the vision and goals with the rest of the organization. A strategy for digital transformation needs to be developed and communicated in the organization so that everyone speaks the same “language”.
Digitalization is not about technology but about people, organization and leadership.
Successful digital transformation in a nutshell:
What are the key elements in a digital transformation strategy? What knowledge do you need to contribute on this digital journey and how should you go about it? There are three elements to focus on when implementing digital transformation. Businesses use digital technology to:
- Improve customer experience
- Make operational processes more efficient
- Transform the business model
Leadership skills and engagement play a key role, and it is important that sufficient time is used on a compelling strategy and on the steps to implementing the transformation.
Improved Customer Experience:
It is vital that the necessary resources are used to increase customer understanding. Customer needs and pain points must be analyzed and input from the customer is important in this process. The customer must have a positive experience when using your products or services. The customer and design processes must be automated with the customer experience in mind. Stop focusing on what your products and services do, but rather focus on the “job” the customer wants the product to do for them. (https://www.christenseninstitute.org/key-concepts/jobs-to-be-done/) Identify all customer contact points and ensure there is an optimized flow in these processes. Create new user journeys and compelling new customer experiences.
Make operational processes more efficient:
By automating manual steps and using methods like Lean, organizations will make their business processes more efficient. Once the processes are optimized, it is important to have technology and IT systems that support the changes in the operational processes. It is also important to have customized solutions and not out of the box or generic products. It is much cheaper and easier to implement a customized solution than a generic solution which is not flexible, has limited functionality and will not help you stand out from your competitors.
You need skilled and dynamic people who are willing to shape ideas into actionable plans. Get employee insight and involve those who will do the job in improving the processes. They are the ones who know where the challenges lie and often already have suggestions for improvement. Your business is not generic, so your brand and solutions should stand out from the rest. Invest and develop a competitive advantage by creating a unique experience and value proposition. A new way of thinking and new ideas can help you be an innovator in your industry.
Transformation of business model:
The first thing you need to do is understand what value configurations you have. Value configurations dictate how value is created in the business. Businesses can be divided into three types of value configurations: Product-producing (value chain), problem-solving (value shop) and linking customers (value network).
This new digital technology can be used to switch from product-based (value chain) to a service-based (value shop) business. You have more control on how value is created in the business.
New digital businesses are established with a digital business model as a foundation. These new businesses are competing with and posing a threat to existing businesses.
The new digital technology has also created an opening for the platform business model (value network). Platform businesses create value primarily by enabling direct interactions between two or more customers or groups. They make it much easier and cheaper to be a customer. Once a business reaches a high number of customers, they can build services on top of that platform and create value. Examples of platform businesses are Airbnb, Uber, Google and Facebook.
Through new digital technology added value is created from the data and information that is produced.
The technology helps to generate, collect, control, analyze, optimize and share information.
Successful transformations depend so much on how businesses handle digital transformation rather than just implementing new technology. Examples of widely used methods in which the customer is in focus are Design thinking, Lean and Lean Startup. There are many similarities with agile software development, and many executives with expertise in software development can have an advantage if they manage to lead the digital transformation.
One must focus on value creation, innovate in rapid iterations, plan along the way and continuously learn from mistakes. You can value individuality and working in teams and still recognize that there will be a much better result if you put together a team of motivated employees with different skills. The manager is a key facilitator for his team members. This has been a focal point in software development management since scrum and other flexible working methods started being used. Knowledge leadership can describe this kind of leadership, and the Norwegian leadership style is a good model to use.
Leadership skills play a key role, and it is important to focus on the strategy and the method that will be used to implement the transformation.
Finally, digitalization is not about technology but about people, organization and leadership. It is also about business development and how technology can be a facilitator to creating added value for the business.