Digital Transformation How will it affect your business?
The words ‘digital transformation’ are being hyped up to such a degree that in the minds of many it has become associated with complexity, futuristic technology and high cost. Confusion reigns high as to what exactly digital transformation means, is it really necessary, and what does it mean for my business. Due to the hype and confusion, executives and boards are feeling driven to make costly decisions, without having an understanding of what the actual need is.
The outcome? Another digital transformation project that fails to deliver, according to the experts.
Why are Projects Likely to Fail?
According to Gartner 60% of digital projects fail and depending on the source of information, this figure may actually be as high as 85%. Analysis suggests primary reasons for this high failure rate have little or nothing to do with the technology itself.
When it comes to digital projects, Forbes says that businesses do not have a full appreciation of the key challenges they are likely to encounter. The majority of these challenges are not about the technology but actually about business fundamentals such as strategic planning, change management and communication.
The result? Long-term decisions are being made without remaining faithful to the underlying business fundamentals.
RAMESYS GLOBAL - BUSINESS TRANSFORMATION
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Just what is Digital Transformation?
For many, the definitions available are confusing. A good way to think about Digital Transformation is to draw a comparison with the GPS navigation systems that are installed in many vehicles today. Once upon a time GPS was considered a bit of a luxury. We used map books to help direct us to our locations and we’d have to stop to the side of the road if we missed a turn off. Today, navigation systems are more affordable, they help shorten the journey and make driving more convenient.
And so value is created by using technology to improve a process.
And unlike yesteryear, many manufacturers believe GPS is something they now have to have in order to remain competitive.Similarly, for businesses digital transformation is about finding innovative ways to create value and stay competitive, using the latest available technology.
Will it affect me?
Yes,all businesses will be impacted by the effect of changing technology. Moreover, this is happening at a pace and scale which is unprecedented. More than five (5) times will be spent on digital transformation than was spent on the Y2K issue and it is estimated to become a trillion dollar industry.
Despite the sheer size of it all, the manner in which businesses need to deal with the impact remains the same. For instance, within the mining sector there was a boom and we couldn’t find resources. Then, the market crashed and then we couldn’t afford resources. In both situations we reviewed our options and adopted strategies accordingly.
Today innovative digital technology is available and … it is just another set of business decisions that need to be made.
Does a Pathway to Success Exist?
So amongst the predictions of doom, and the confusion that surrounds us as decision makers, the question is, can failure be avoided and if so, how? The short answer is yes, there is a way to calm the stormy seas so to speak and this can be achieved by following a structured, measured approach to managing change within our business; the way it has always been done!
What are the Business Fundamentals?
The mistake many are making is to view technology as the end game. The reality is technology is merely an enabler of improvement and opportunity. The end game is decided by how we apply the business fundamentals – strategic landscape, business planning, people, process, culture. The fact the tools are changing rapidly not only allows us to revisit these business fundamentals, it forces this strategic review process upon us. To apply new tools without understanding the impact on long term business strategy, and impacts on people and processes invites failure.
"You are not forced into digitising, but you are forced into thinking about the impacts digitisation will have on both your business and your competitors and adapting business strategies accordingly"
In Part 2 of this exciting series, we will dive
deeper into the foundations of business success
in a changing environment and explore in
more detail how we can leverage the business
fundamentals in order to thrive in a space where
so many before them have faltered.
RAMESYS GLOBAL – BUSINESS TRANSFORMATION
Ramesys' Business Transformation team offers a range of consulting services along the business improvement continuum designed to help enterprises improve bottom line performance.