According to PwC data, 60% of senior executives say that digital transformation is their most critical growth driver in 2022. Companies are making investments to support this claim. IDC has forecast that “global spending on digital transformation (DX) of business practices, products, and organizations is projected to reach $2.8 trillion by 2025, more than double the amount allocated in 2020.”
Some of this focus is deserved; many organizations that have embarked on their DX journey have cited real benefits such as increased efficiency, more satisfied customers, and faster time to market with new products.
However, like most things, DX doesn’t always live up to expectations. You can even run into drawbacks if you don’t take into account the preparation for risks and potential setbacks. While many of the challenges with DX releases are common and avoidable, many organizations don’t realize they have these issues until well into their implementation.
Contrary advice for IT leaders
Here are three contrarian tips to help you, as an IT leader, think about where you are and where you hope to go with your DX initiative.
1. Breaking down silos highlights organizational problems
One of the biggest benefits of DX is breaking down silos within an organization. Sales, products, finances, and customer success can no longer operate in a vacuum. Rather, newly designed processes require transparent collaboration across the organization.
[ Also read Digital transformation: 6 tips to stay on track. ]
But all too often, this breaking down of silos can increase friction between departments, especially if goals aren’t aligned. For example, if the sales team is told to sign new customers at all costs, but the product team is judged primarily for increasing customer retention, that’s a problem.
On the plus side, a digitally transformed process makes it more difficult for misalignment to continue. But a resolution from executive leadership is required to get things back on track. While admitting the problem is the first step, this can be detrimental to workers and reduce productivity in the short term. The best way to mitigate this risk is to review and align all departmental goals before embarking on a DX project.
2. Zombie digital transformation programs will have diminishing returns
DX is a journey, not a destination. That may be a good way to see the constant improvement of the organization, but it’s not an excuse for a never-ending project of undead “zombies.” Most companies will reach a point where it is not worth moving to the next step in the DX plan. Just because a path is right for a particular organization doesn’t make it the blueprint for all DX projects. Unfortunately, there is no instruction manual.
“Not every company is going to need the same level of digital transformation, so there is a point of diminishing returns when the time and cost outweigh the benefits,” said Bernard May, CEO of National Positions. To make sure your organization doesn’t reach DX zombie status, it’s important to start the process with clear objectives and decision criteria to weigh the value at each step. Don’t be afraid to pivot along the way.
3. Don’t underestimate workers’ resistance to change
There are many wonderful benefits to DX, but to realize them, the new processes must be accepted by the people doing the work. In fact, 70% of organizations fail to achieve their digital transformation goals, primarily due to worker resistance and a lack of managerial support, according to McKinsey.
More about digital transformation
There are many reasons for concern, including loss of job security, skepticism that DX tools deliver the promised value, and not knowing the big picture and why these changes are happening.
Strong top-down communication can help mitigate many of these issues. Employees who feel informed and empowered are more receptive to change and hopeful about improvements, even if they don’t feel right away.
It’s also important to remember that communication isn’t just about providing clear direction and being a good listener. DX is a work in progress; If the new processes and tools do not work within a reasonable amount of time, they should be re-evaluated.
The advantages of DX have been proven – just look at the proliferation of the cloud and the advent of remote and hybrid work in recent years. Whether your business is a DX success story or flop has little to do with digitization and everything to do with proper business hygiene.
It’s crucial to address organizational silos, IT plans and expectations, and employee experience before you bite into your piece of the DX pie. Fortunately, these are all areas that leaders can address today to be a DX success story of tomorrow.
[ Culture change is the hardest part of digital transformation. Get the digital transformation eBook: Teaching an elephant to dance. ]
Source: news.google.com