Three factors to consider when defining your next Digital Transformation project
Planning your next project can be difficult, as Digital transformation is occurring rapidly at a majority of public and private sector organizations[i]. Creating a compelling business case is one, but how do you decide if your project is the right one? By ensuring your next Digital Transformation project fulfills customer demand and internal expectations, while taking external influences into consideration, chances of success will be high.
Customer experience is a key driver and catalyst for Digital Transformation projects. Since customers are the lifeline for every organization, continuous development of customer experience can be considered the foundation for sustainable business growth.
Understanding ‘why’ a customer demands a certain change is important to grasp the underlying motivation in order to define the right projects to fulfill this. Elements of a customer experience include a streamlined information flow, a connected environment for a disparate workforce and enhanced collaboration that drives innovation[ii].
External factors (not being customers) can have a large impact on the business model of an organization, and it’s related projects to innovate and transform. The two most important factors are regulations and technology.
The regulatory outlook for organizations might best be described over the past many years as “always evolving”. The General Data Protection Regulation (GDPR) is a recent regulation with an extremely high impact on the processing of data, and organizations need to prepare for compliance or deal with the consequences. The cost of compliance has become a major issue for organizations, and lightening this burden is possible via the use of technological innovations such as artificial intelligence (AI), cloud, analytics, and robotic process automation (RPA)[iii].
The above mentioned technology are drivers on its own. Suitable for more than just managing regulatory requirements, they can be used to drive new innovation and changing business models too. The most commonly cited benefit of AI and robotics is the impact on the speed of processes, which was particularly notable in Benelux based organizations (83%)[iv]. Automating tasks that technology can do better, are highly repetitive, dangerous, or just boring, enable companies to let their employees focus on skills that cannot be done easily by computers, such as creativity and complex communication. Exploring the options of (new) technology are crucial when deciding on an optimal configuration for your next Digital Transformation project.
Employee engagement is an essential factor for companies to consider when striving to increase productivity, execute business strategies, improve company performance and develop roles within the company[v]. The hardest part of a successful digital transformation is the cultural piece. While a digital start-up can disrupt the market, legacy companies shouldn’t undervalue their own competitive assets or make the mistake of thinking the disruptors have all the cards[vi]. With a labor market under pressure, the war on talent is more fierce than ever, and employees will express their needs, or they don’t and simply leave. Listening to internal expectations, and taking these into consideration when defining a project, will therefore be an important action in this battle. Examples of expressed needs are a compelling user experience (employees are consumers too), a flexible workplace (anytime, anywhere, on any device) and the further consumerization of IT (technology emerging in the consumer market and then spreading to the business market).
Finding the right project
When only focusing on external factors, like customer demand, new technology or laws and regulations, an organization might miss the opportunity to win the war on talent. Vice versa, if an organization defines a project solely based on people (internal and external), the impact of new innovative technology is overlooked at, resulting in an inferior performance.
A project that takes all three factors into consideration is likely to have a high impact on the success of Digital Transformation, and hence, your business!
Focus on the power of three, and you’re one step closer to success.
[vi] McKinsey — Digital transformation: The three steps to success (James Bilefield, 2016)