Will 2020 be the end of “digital transformation” strategies. After all “Disruption” is only a passing phase right?
Is the concept of digital transformation just a fad? Maybe we just need to refresh the name, everyone seems to be doing it but with mixed results!
The IT industry has a really bad habit of trendy buzz phrases. They mask the normal everyday business of improving IT. Effectively doing what they have always done but the risk is that by adding a trendy label like “Digital Transformation” it can mask the truth: That IT are finally carrying out a long awaited upgrade of the same old service. Often minimising costs and just barely keeping the lights on through a “bare bones” upgrade, doubling down on the same legacy vendors in a bid to keep costs down. By branding the move “a Digital Transformation” the risk is, IT is setting the business up to fail when it comes to beating more nimble market entrants.
“In some ways, incumbents have a lot of benefits over new players, over start-ups. They have customers, they have great data, they often have a brand. They have financial resources, which a start-up may not have. The question is, can all of those capabilities and assets be deployed in a way that allows you to defend against new attackers as digital disrupts your industry?”
Paul Willmott | Director at McKinsey
Believe it or not transformational change involving people, processes and technology has always been a thing! I can’t help but think that the term “Digital Transformation” is just a new buzz word to describe this tried and tested strategy of improvement. Will 2020 be the last year we hear these words? What exciting new IT term will they think of next? If it gets organisations truly focussed on a strategy of technological improvement whether this involves digital services or simply more automation I really don’t mind as long as it is a commitment to replacing legacy ways of working and focussing on improving not only the way people work but also the experiences of employees and customers. A process that is poorly designed will still be poorly designed whether it is a digital process or an analogue one.
The opportunity that sits before large incumbent market leaders is to defend their territory against aggressive market entrants. Let’s not diminish the challenges that these organisations face. That of organisational change. The future of work holds many promises but all will require thought and strong strategic thinking. By eliminating redundant, manual tasks, there is an opportunity to streamline and optimise the supply chain of services, making them more consumable and cost efficient. The capabilities required for organisations to best smaller competitors lies in the area of consolidation. Automation, practice management and workflow platforms afford highly disparate organisations the opportunity to bridge the political divides and get teams working better together based on shared processes and data. But this will require strategic decisions that drive high amounts of organisation change and its not a “once off” either. Change is the only constant and organisations that can approach change in an agile more nimble fashion stand to gain big time!
Businesses who are able to embrace the opportunity to leverage the assets, shared data, people skills, resources and extensive customer bases will survive — but only if they are adaptive, responsive and intuitive to new and every changing demand. Those that don’t will not be able to successfully meet the exceeding expectations of the market. Leadership positions can be stolen in a heartbeat and previously loyal customers are no longer willing to accept poor service experiences whether this be a digital experience or otherwise. Sustainable competitive advantage will only come by those that can adapt to market shifts quickly and elegantly. Organisations that are able to focus on innovation and customer value will win. Maintaining a Digital transformation strategy may be the answer but if the strategy is only that, i.e. just a name and if the organisation isn’t able to respond to a changing world it will remain just that: A meaningless buzzword.