How can business leaders accelerate digital transformation?
There are several vital considerations business leaders must be clear on before they embark on a journey of digital transformation
The COVID-19 pandemic has fast-tracked digital transformation for many organisations, but this has presented businesses with a range of new challenges. According to AGSM @ UNSW Business School Adjunct Faculty Member, Max Theseira, the "new normal" for businesses post-coronavirus will significantly drive digital business and digital transformation going forward.
So what will this new normal look like? "I think that consumers are consuming more digitally than they ever have done before and employees are working more remotely than they've ever done before – our experiences during this pandemic will undoubtedly shape that new normal," explained Mr Theseira.
In such an environment all organisations must thoughtfully consider their approach to digital transformation, because Mr Theseira says this is a lot more complicated than merely investing in new and exciting technologies, but rather requires a more nuanced approach.
Understand what it means to be a 'digital business'
It is essential to understand that a digital business helps solve customer problems and creates value through the application of data and emerging technologies, explained Mr Theseira. "Broadly speaking, it's really about the use of data technology to unlock value for a particular target in your market… you could think of digital business as much more about being digital than using digital channels," he said.
But 'being digital' is not separate to the identity of the organisation. "It's about how you think about new products and services, how you offer those to the market and what channels you use. And so quite often, when I talk to people interested in this space, I talk more about being digital than trying to make digital happen in your organisation," he added.
The extent to which a business can become digital depends on several factors: the level of disruption to the business; the expectations of customers; the types of products and services that the company offers and the reason it exists in the first place. So a digital transformation should be understood as "the act of moving towards digital business", said Mr Theseira, who leads the AGSM @ UNSW Business School course on Accelerating Digital Adoption.
Take the first steps toward digital transformation
It is also essential for business leaders to try to cut through the noise surrounding digital transformation and sift out only the things that will be helpful, urged Mr Theseira.
"A common mistake is to focus too early on technology. When you're thinking of digital transformation, whether you're starting from scratch or you already have some initiatives that you're trying to scale across your organisation, a good place to start is: what is the business problem that you're trying to resolve?" Mr Theseira explained.
So pinpointing the exact issues you are trying to address is a good starting point. But business leaders must also be clear on their organisation's business strategy and desired direction before they can start utilising any technology in the process.
Consider whether you are trying to drive efficiencies in your organisation, take costs out and drive new revenue streams, or perhaps explore adjacent industries and other markets. Questions like these are essential considerations, and what you decide will affect your organisation's digital transformation, said Mr Theseira.
Recognise common mistakes
One area where businesses often go wrong is to think of digital transformation as a side project, noted Mr Theseira. "What we are seeing is that companies have a better chance of being successful when they incorporate digital transformation into their core strategy," he said.
So merely investing in technology alone is not enough to effect a successful digital transformation, because the solution to success is "more about business than it is about technology. There are plenty of studies by reputable firms such as McKinsey and the big consulting firms… that find the barriers to digital transformation tend to be more on the people side of things," he said.
Factors such as company culture, having the right mindset, management practices, and whether these enable people to be creative in the organisation should not be overlooked.
"If you don't focus on the softer aspects of the transformation, and just focus on the technology, you're unlikely to be able to reap the benefits of the investment that you're putting in place," said Mr Theseira.
"Consider the capabilities that you might need in your organisation actually to be successful at digital transformation. Those capabilities don't just span the technology talents that you have in your organisation. They also span the change management elements around how do you make a change in your organisation, a different type of culture that might be required in the organisation, etc.," added Mr Theseira.
Importantly, business leaders should know they don't have to go it alone. So Mr Theseira suggested thinking about whether there is a potential partner in your market which could assist in offering new products and services digitally to your target audience.
"Creating ecosystems is a whole other element of being digital. Organisations that orchestrate ecosystems are the ones that are getting the most benefits from digital transformation," he added.
Continue to educate yourself
While data and technology are important to the digital transformation journey, what Mr Theseira called "the elastic infrastructures of moving things into the cloud, dealing with your legacy systems, data visualisation etc." – these are the accelerators that can increase speed to value. Then there are the enablers: factors such as "leadership, culture, mindsets, the right environment for people to flourish in a digital world" that businesses cannot ignore, he said.
According to Mr Theseira, several educational opportunities are dealing specifically with enabling people to think about digital transformation that offers "a deep dive" into some of the more technical elements.
"There's a lot of noise out there, and one thing you could do is to come along to some of the courses that are being offered by the top tier institutions, such as UNSW Sydney," said Mr Theseira.
For example, in his AGSM @ UNSW Business School course Accelerating Digital Adoption, Mr Theseira teaches a "step-by-step process for thinking about digital ambition and maturity in the organisation, looking at where the gaps might be, and thinking about how you move into a position where you have a roadmap for your organisation's digital journey."
For more information, contact Max Theseira, AGSM Adjunct Faculty Member at AGSM @ UNSW Business School, visit the AGSM virtual learning hub or learn more about the AGSM @ UNSW Business School course on Accelerating Digital Adoption.