Digital transformation is often regarded as synonymous with technology in organizational environments. Although this is partly right, it is only half true. Embarking on a process of digital transformation also implies taking a step further to change the business mindset and culture of a company.
Although organizations have accelerated their plans related to digital transformation, many of them are just starting: 56% of companies recognize that they are still taking their first steps, according to a report by the consulting firm LLYC on 200 firms in America and Europe.
In the same way, a report by the consulting firm EY found that 70% of Latin American projects in this area fail, which shows that it is still difficult to understand what it means to be digital. In this article we present some clues to go beyond technological change and achieve a sustainable transformation.
Beyond the digital transformation, how to be a digital company without dying in the process?
As we mentioned above, being a digital company is not just about adding new software or migrating to the cloud. But, what aspects must be taken care of? In general, we could say that there are 6 elements that must be paid attention to in order to go through the digital transformation with a high probability of success.
For experts, the first step is to have a clear vision of the reasons why the changes will be made. In regards to this, these reasons are aligned with the business goals.
The strategy will be the roadmap of the organization. Therefore, you must be able to answer the following questions: Why is transformation important? What initiatives should everyone be focused on? Have the expected results been defined? Has financing for the transformation been secured?
It may seem strange, but digital transformation is more human than technological. For Andrea Cavallari, Director of Solutions and Emerging Technologies at Red Hat Latin America, “it encompasses a combination of elements that go through the integration of technologies, people and processes. In other words, despite being digital, this transformation must be profound and directly linked to changes in the culture and habits of companies.”.
A survey conducted by Red Hat in early 2021 around the world showed that 27% of companies consider cultural change an important part of digital transformation. However, only 6% of them have worked on this issue as a priority in their actions within this area.
A culture that encourages the commitment of collaborators and the support of leaders will achieve environments that are more permeable to change, flexible and open to innovation. “After all, it is useless to adopt emerging and fashionable technologies if people and processes cannot adjust to the dynamism that they bring”, says Cavallari.
In accordance with what was said in the previous section, the development of a digital culture is not possible without people. They are the engine of change and, for this reason, it is vital that they are prepared to adapt to the new mindset that digital transformation brings.
What are the necessary skills? Digital businesses require talent to be able to detect opportunities for improvement, adapt to changes and, fundamentally, make decisions based on data. Training teams in soft skills and data analytics could be a worthwhile investment.
Having a figure such as the CDO (Chief Digital Officer) can also outcome in a significant contribution to carry out a digital transformation process. According to EY, many companies give this task to leaders with previous responsibilities. Having a suitable person whose exclusive mission is the transformation of the company will ensure that it does not risk of being buried under priorities of daily operation.
The 15th annual State Of Agile report carried out by Digital.ai in 2021 indicates that the implementation of agile methodologies has helped 70% of companies in managing change.
It is that agility is a very powerful framework that empowers collaborators and creates value faster than traditional methods. Several experts recommend joining this trend as they consider it a very efficient way of managing risk and uncertainty.
On this point, Cavallari maintains that “trying something new, making mistakes quickly and dynamically readjusting course (fail fast, recover quickly) cause new features, new products and ideas to become reality faster. (…) The point is the change in the way of working, which must be increasingly collaborative and with the willing to adapt to changes”.
- Data structure and infrastructure
Although the strategy is clear and seems solid, a digital transformation process will hardly be successful without a correct data structure. The digital transformation will only advance if it is possible to carry out a good diagnosis and be able to establish attainable and measurable goals.
Similarly, it is essential to align the right infrastructure and architecture so that it can support the data that the organization needs to answer to the business.
In the words of Lino Rivolta, Strategy and Innovation Manager at EY: “understanding that all the changes we undertake in our digital strategy are going to generate changes in our business architecture is a key element and, therefore, the technology team is a strategic ally to enable and transform these changes”.
How do we ensure that the return on investment made for digital transformation can be measured? This point is essential to avoid frustrations and objectively assess what the outcomes of efforts are.
Knowing how to build the appropriate KPIs will allow you to monitor the investment made and evaluate the level of evolution in relation to the competition. Again, data plays a fundamental role in knowing where we are and where we want to go.
Finally, the “fever” of digital transformation is declining, but the keys and processes mentioned here are crucial learnings to continue gaining competitiveness. In particular, organizations that have managed to start structuring and “taming” their data management, already have a great resource to continue evolving at the speed of the market.