Kathy Gibson is at IDC CIO Summit in Zimbali – In 2019, digital transformation is well advanced, with various degrees of success seen in organisations around the world.
To stay ahead of the curve it’s no longer enough to just embark on digital transformation – organisations have to be determined to succeed at it.
Mark Walker, associate vice-president: South Africa at IDC, explains that, around the world, there are 275 unicorns – new companies valued at more than $1-billion. The defining characteristic of these companies is that they are based on digital technology.
“They are digital-native enterprises,” Walker says. These companies have four things in common.
Digital-native enterprises innovate at a pace that is an order of magnitude greater than traditional businesses.
They are driven by a customer-centric and empowered workforce.
In addition, they embrace risk-taking as it continuously learns and adapts.
And they fuel more efficient operations, new revenue stream and customer loyalty through the use of technology and data.
All organisations need to become digital natives to succeed in digital transformation, Walker says. The determination to do so hinges on four things: organisation, strategy, financial and platform.
Worldwide, 48% of organisations are digitally determined, with the rest still digitally distraught.
The key to digital determination is scale, Walker adds, Those that are succeeding are able to build capability around scaling digital to delivery of hyper personalised digital services at scale.
Talent excellence is also key. Determined organisations prioritise change management, collaboration and innovation culture.
Digitally determined organisations make customer excellence in the delivery of products and services an important building block, Walker points out. “It starts with how you service your customers – and it works backwards from there.”
A focused strategy is key to achieving digital determination, Walker adds – and CIOs need to be guiding the digital strategy.
For most digitally determined companies, the strategy is digital transformation that can transform markets with new business models and services. Importantly, this strategy must be integrated and continuous, aiming for enterprise wide digital transformation.
Companies that are not digitally determined ae involved in impromptu digital transformation, or projects driven by lines of business as well as short-term campaigns.
Walker advises companies to break their digital roadmaps into horizons, aligned to the strategic goals. These horizons would consist of use cases, some of them able to deploy quickly, others that are being incubated, and still others that are being imagined for the future.
Digitally determined organisations demonstrate the inherent value of digital to the business, Walker adds.
This means companies have to develop new key performance indicators (KPIs) in the digital world.
They include financial, business and operational KPIs in innovation, customer advocacy, data capitalisation, digital operations, and work and labour supply.
The digitally determined organisation is built on platforms, explains Walker. Currently, IT tends to consist of islands of innovation that are now connected.
“You have to have much fewer islands if you are digitally determined,” he points out.
Research shows the digitally determined companies have jut 10% of their IT in islands; while digitally distraught companies have up to 30% of them isolated.
The key element of a digital platform that links all these islands together in a digital core.
“You have to be able to orchestrate all these things through the intelligent core at the centre,” Walker says. An agile application architecture on PaaS uses microservices and containers for quick development,
New customer experience technology fully supports customer and ecosystem-facing business models.
The intelligent core is the foundation for digital trust through identity vulnerability and threat management across all services.
“An intelligent core uses all the latest technologies, like data management, cognitive computing, artificial intelligence and machine learning,” Walker says.
What is the motivation for companies to make the change?
Walker points out that new competitors are the biggest concern for digitally determined organisations. Digitally distraught companies, on the other hand, are more concerned with commoditisation.
IDC recommends that companies commit to a culture of innovation, customer centricity, data and learning
They should identify new digital KPIs to measure their journey and demonstrate that digital is inherent to the organisation’s financial success.
They need to build a vision of how the business will be transformed in the digital economy; develop a use case-based roadmap across three horizons, and start with quick-win projects that demonstrate ROI and engage peers.
Finally, they need to develop an integrated platform centred around gleaning insights from data.