Digital transformation isn’t a buzz word because it sounds nice and looks good on the business CV. It is fundamental to long-term business success.
IDC anticipates that 75% of enterprises will be on the path to digital transformation by 2027.
However, digital transformation is not a process that ticks a box and moves to the next item on the agenda – it is defined by the organisation’s shift towards a digitally empowered infrastructure and employee. It is an evolution across system, infrastructure, process, individual and leadership and should follow clear pathways to ensure sustainable success.
According to Mark Walker, associate vice-president for sub-Saharan Africa at IDC Middle East, Africa and Turkey, the nature of the enterprise has changed completely with the influence of digital, cloud and the Fourth Industrial Revolution (4IR), and success is reliant on strategic change.
“There is a lot more ownership and transparency throughout the organisation and there is a responsibility that comes with that – employees want access to information, there has to be speed in knowledge, transactions and engagement,” he says. “To ensure that the organisation evolves alongside digital and demand, it has to follow five very clear pathways to long-term, achievable success.”
The first of these is to evaluate where the enterprise sits right now in terms of its digital journey.
This will differ by organisation size and industry, as well as its reliance on technology. A smaller organisation that only needs a basic accounting function or the internet for email will have far different considerations to a small organisation that requires high-end technology to manage hedge funds or drive cloud solutions. The same comparisons apply to the enterprise-level organisation. The mining sector will have a completely different sub-set of technology requirements and infrastructure limitations to the retail or finance sectors.
“Ultimately, every organisation, regardless of size or industry, is reliant on technology to grow or deliver customer service, but their digital transformation requirements are different,” says Walker. “To ensure that investment into artificial intelligence (AI), machine learning, knowledge engines, automation and connectivity are accurately placed within the business and know exactly where the business is going. The second step is to examine what the business wants to achieve.”
Again, the goals of the organisation over the long and short term will be entirely sector dependent, but it is essential that it examine what the competitive environment looks like and what influences customer expectations. This understanding will allow for the business to hone its digital requirements accordingly.
“The third step is to match expectations to reality,” says Walker. “You need to see how you can move your digital transformation strategy forward and what areas require prioritisation, what funding models will support your digital aspirations, and how this tie into what the market wants. Ultimately, every step of the process has to be prioritised to ensure it maps back to where you are and your strategic steps that will take you to where you want to go.”
The fourth step is to look at the operational side of the process. This is as critical as any other aspect of the transformation strategy as it maps budget to skills to infrastructure in such a way as to ensure that any project delivers return on investment.
Budget and funding are always top of mind when it comes to digital transformation – these are understandably key issues for the business. How will it benefit from the investment? How will it influence the customer experience? What impact will this have on the ongoing bottom line?
These questions tie neatly into the fifth step in the process – the feedback loop.
“This is often the forgotten step, but it is the most important,” says Walker. “The feedback loop is critical to ensuring that the digital transformation process is achieving the right results, that the right metrics are in place, and that the needle is moving in the right direction. It is within this feedback loop that the organisation can consistently refine the process to ensure that it moves to each successive step with the right metrics in place.”
There is also one final element that every organisation should have in place throughout its digital evolution, an element that many overlook – engagement. There must be a real desire to change, from the top of the organisation right down to the bottom, and an understanding of what it means to undertake this change and why it is essential.
“This is why this will be a key discussion at the 2019 IDC South Africa CIO Summit taking place in April this year,” Walker concludes. “With this in place, the five steps to digital transformation will make sense and deliver the right results.”