5 prerequisites for the success of digital transformation
3 May 2018
Whilst implementing new solutions or IT tools in a company, it’s easy to make mistakes that can interrupt processes or upend business plans. This scenario is much more likely though when implementation of new technologies is perceived as a cost and not key investment. And when fundamental rules are not followed.
Probably everybody remembers the Kodak’s fate. The story of this company is a spectacular example of what can happen to a seemingly strong brand without careful monitoring of the ecosystem it operates in. A brand that did well on the analogue market, proved completely vulnerable when confronted with digital revolution. Digital photography swept the world in no time, sweeping away those who failed to notice the coming changes in due time.
After Amazon debuted on the American market, it seemed to be just one of many players on the book market, even though, right from the beginning, it focused on online sales. However, Amazon’s ambitious implementation of innovations, let it outsmart virtually all the e-commerce competitors. It swept aside both long-time players experienced in traditional sales as well as start-ups. Accounting for the revolution brought about by IT solutions and online activities proves to be a necessity.
Don’t miss the digital change
It’s enough to say that in 2014 even the American Walmart was on the brink of disaster. The new president of the commercial giant, once relentless for the competition himself, had to create a new development strategy and focus on digital transformation. “We’ve lost quite a lot of time. We employed talented people, invested and circulated around the subject instead of taking some real steps, acting dynamically and treating e-commerce as a necessary business aspect to master,” the newly appointed Walmart President Doug McMillon admitted quite recently in “Harvard Business Review”.
A vast number of the companies preparing for a digital transformation realize that the process entails a number of obstacles. According to the research conducted by “MIT Sloan Management Review” together with Deloitte (Aligning the organization for its digital future), as many as 90% of these organizations are well aware of the dangers related to diving into the digital era. However only less than a half (44%) consider themselves not ready to face up to this challenge.
All depends on people
The experience of many organizations shows that establishing a digitalization team or hiring a renowned expert won’t solve the problem. A much more important aspect is the “training” of all the employees involved in the transformation process (directly or indirectly, for instance by being given new working tools or sources of data that were unavailable before). Almost every meaningful change triggers reluctance of at least some of the people. This is not surprising as most of us prefer stabilization rather than revolution. We usually cherish the internal conviction that the present solutions work perfectly well and there’s no need to change them and cause unnecessary chaos. In their recent study, experts from MIT Sloan pay particular attention to the organizational culture that the quality of work depends on – the level of using new IT solutions or minimizing problems and their consequences. Of course, only if the employees receive adequate support from their leaders.
Steps to successful digital transformation
“Aligning the organization for its digital future” report identifies five main solutions that can help agile transformation. The guidelines were formulated based on an analysis of behaviours of mature organizations which strongly support their organizational culture and focus on the development of their talent pool.
“There’s no doubt that the attitude of the organization’s leader plays the key role. He does not need to be an IT expert, however, he must be well aware of the role that new digital technologies play in business and have full trust to the people working with developing business and creating requirements as well as to the IT department that builds all these requirements for the company” says Ola Hesselroth, Partner at Euvic.
1. Development of organizational culture as a conscious effort
Mature companies know perfectly well that the conditions and rules governing an organization are of crucial importance for its development and adaptation of new technological tools. In such conditions employees are much less reluctant to implement new tools and tend to look for the best solutions on their own. Therefore these companies remain faithful to the values they cultivate and are open for creating the best working conditions. Such rules apply in almost 80% of mature companies and less than every fourth (23%) fledgling organization.
2. Digital development of managers.
Mature companies don’t need IT experts to develop in this direction. They focus on developing their own talent pool instead. The companies that offer possibilities of technological development to senior leaders deal with change much more effectively. This means that the decision makers who support and inspire employees, must be able to develop IT tools themselves. If they have a keen eye for it, they will make perfect ambassadors of change and mentors.
3. Investing in a talent pool
Similar requirements apply to lower level employees. Mature companies focus on human development in terms of digital skills and knowledge. Such rules apply in over 75% of mature organizations and merely 14% of the not yet technologically advance companies. What’s important, such an approach brings further benefits. Technologically mature companies find it easier to attract new talents (71% of companies declare that young people decide to work for them mostly because of the opportunities related to digital development). Only 10% of the companies that have just begun a technological shift say they have this skill.
4. The role of soft skills
IT knowledge does not play the key role in an organization’s transformation. It is the characteristics of leaders and employees that are of a much greater importance. Technological knowledge plays the first fiddle for 18% of them. However, what they value even more is the vision of transformation (awareness of its role; 22%), ability to collaborate (22%) and visionary skills (20%).
5. Digital coherence
The success of transformation depends on a certain coherence of activities and approaches encompassing human resources, company culture, its organizational structure and business challenges. This means that a company’s strategy must account for continuous evolution of technological solutions, hence also vigilance and sensitivity to changes. Without all these ingredients avoiding turbulences and implementing a permanent change becomes a much more daunting task.
Being an organization’s leader you don’t need to be an expert on digital technologies. Yet you must realize the significant qualitative changes that digital solutions may bring to your company. The key ingredient is the leader’s trust to the IT department and its recommendations and being open to change. Implementing digital solutions cannot be perceived as a cost, but an important investment that, with time, will translate into business success.
Euvic is one of Europe’s leading IT-companies with 1700 highly skilled system-engineers and system-developers. It provides a full range of IT-services like software development, application testing, integration projects, IT Service desk, cloud migrations and IT out-sourcing. We are expanding into the Swedish market thanks to the confidence from customers within the transportation industry, production industry and service industry.