Digital transformation is considerably more challenging than adopting the latest technology. While many consider digital transformation synonymous with a technology or a combination of technologies, focusing on the technology aspects alone minimizes the very real people and process issues.
True digital transformation impacts every area of the business. Therefore, every aspect of the business must help enable the change.
"[T]he people part is the hardest part. They have to understand that the way of doing business that got you to where you are today, unless it’s driving directly to the consumer or device, is only going to hold you back going forward," said Matt Minetola, executive vice president and CIO, travel commerce platform provider Travelport.
Following are 11 digital transformation hacks you can use to drive higher levels of business value faster.
Hack #1: Focus on the customer
Today’s customers expect high quality digital experiences. Knowing that, digital disruptors and well-funded innovators make a point of eliminating points of friction in apps and business processes to woo customers away from incumbents. By making it easier to do anything – rent a room, get a ride, watch a movie, or pay for something – new twists on old ideas can drive multibillion-dollar valuations and disrupt entire industries.
"Everything you do should be tied back to a clear understanding of how value is created for the customer," said Gerry Campbell, founder and CEO of the Frequency Group, a customer-centric consultancy. "The hack is looking to customers and being ruthless about ensuring that the organization aligns with that."
Hack #2: Eradicate friction in business processes
Today’s customers expect instant gratification regardless of whether they’re doing business with a bank or enjoying an afternoon at an amusement park. That requires identifying points of friction in business processes and eliminating or minimizing them.
"If I have to send out a salesman who talks to a marketing person who talks to a support person who talks to an advanced sales technology support person who translates requirements into a technology and then builds it, that takes a lot of time," said Travelport’s Minetola. "For me, digital transformation is creating a direct linkage to the customer or disaggregating multiple stops between the supplier and the customers."
Hack 3: Understand what’s happening at the edge
The companies that can understand their customers in context, as the context changes, also have an advantage.
"If you can’t figure out how to understand what’s happening at the edge, you’re going to lose your market share and value," said Minetola.
Hack #4: Imagine the future, then engineer
Some companies leapfrog the competition while others make incremental slow, steady progress. Travelport intentionally set unrealistic goals for itself because it wanted to achieve more than it would if it set incremental goals. Examples include having core applications run blockchain by 2018, enabling sub-second processing speeds for all transactions and processing 40 billion transactions with the same level of technology investment and processing power used for 3 billion transactions.
"You have to make sure you don’t let the limits of where you are get in the way," said Minetola. "We never would have gone with memory-driven compute if we were trying to go from 2.1 [seconds] to 1.9. Instead, we asked what it would take to get to 1.5," said Minetola. "It changed the DNA in the organization and pushed the limits more than if we’d set traditional goals."
Hack #5: Empower employees and partners
Digital transformation requires innovation at all levels of the company. To enable continuous innovation, people need fast, frictionless access to technology.
"You need to innovate at the speed of digital transformation which is difficult for big companies," said Scott Snyder, partner at executive search firm Heidrick & Struggles. "You need low-friction IT and a technology stack that makes it easy for people to innovate every day. Then you need air cover for the big innovations that allow you to reinvent your business."
Hack #6: Use data to your advantage
Digital disrupters built their businesses on massive amounts of data, some of which they don’t share. Other organizations need to find a way to make sense of the data they have and get the data they need to meet their goals.
"Having a data mindset is crucial for any company," said Heidricks & Struggles' Snyder. "People who are able to turn data into better products and services [create] more data that feeds the algorithmic advantage."
Hack #7: Don’t try to do everything alone
The most successful companies tend to look for partners who can help them meet their goals faster and more cost-effectively. For example, Mastercard has expanded its distribution base from banks to the big digital companies, large ecommerce companies and systems integrators, for example.
"Digital transformation isn’t about technology. Anybody can do tech," said Jorn Lambert, executive vice president, Digital Solutions at Mastercard. "It’s knowing who you are, what your boundaries are, what your competitive state is, and making sure you partner with the right folks. Many people try to make a short cut to tech and agile development. It’s important, but that doesn’t make the difference between success and failure."
Hack #8: Create enabling roles
New positions emerge as a result of business and technology progress. Hence, there are the chief digital officer, chief data officer, and other roles that historically did not exist.
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"It’s not just design, developers, data science. It’s new roles that will be needed like to drive new ways of working, such as product incubation manager, behavioral scientist, journey mappers, business modelers, or emerging technology specialists who help translate the new, changing environment to the business," said Heidrick & Struggles' Snyder.
Hack #9: Redefine the business
Every business should have short statements that define it. However, in a lot of cases, those taglines and positioning statements are out of date. For example, car manufacturers have viewed themselves as the designers and producers of the most luxurious car, the safest car, the cheapest car, the sportiest car, or the most reliable car.
In the book, "Goliath’s Revenge: How Established Companies Turn the Tables on Digital Disruptors" Heidrick & Struggles' Snyder and his co-author Todd Hewlin note that General Motors considers itself "a triple-zero transportation company" which means zero congestion, zero emissions and zero crashes.
"You can’t do all that as a car company," said Snyder. "You have to think about ride sharing, electrifications and other things that aren’t just about producing better cars."
Mastercard's Lambert has a similar view. While digital transactions are not new to the company, the nature of digital payments continues to evolve.
"For the past couple of years in these digital native experiences, [it’s been important to make payment] as frictionless as possible and as secure as possible," he said. "We’re never going to be a taxi hailing app, but we’ll be in those and offering customers choice. You need to know your own strength and then work with partners."
Hack #10: Make sure your technology scales reliably
When acquiring new technology, some businesses focus so much on their current requirements that they fail to consider how the solution will scale over time.
"I’ve seen a lot of companies who embed a new technology really fast but when it becomes a requirement that customers to rely on, it doesn’t scale well, it doesn’t perform well and it’s not reliable," said Travelport's Minetola. "Every company is a technology company today. If you’re not, you’re not going to be in business."
While Travelport has experimented with quantum computing, in-memory computing proved to be a better solution for now. Meanwhile, it has executed augmented reality (AR), virtual reality (VR), and blockchain pilots to figure out how those technologies can further enable its platform.
Hack #11: Realize it’s a companywide endeavor
Organizations may hire a chief digital officer, a chief innovation or other role to lead digital transformation while the rest of the organization continues with business as usual. Digital transformation is an inclusive undertaking that requires people from across the organization to help conceive and implement the changes.
"I can build great products that are highly secure and frictionless, but that doesn’t mean Mastercard has succeeded in digital transformation," said Lambert. "Every part of the company needs to think digitally and [they also need to consider] how digital distribution can unlock more value."
Mastercard has digital literacy courses that its employees are required to take so they understand what APIs and blockchain are, for example. Is also has an API team that roams the company looking for services that can be exposed digitally. With the API team’s help, the various operating units can prioritize opportunities and they're assured that the resources they need will be available.
"It’s not just digitizing [a service]. The teams managing that need to think about constructing their service and business differently," said Lambert. "[In] successful companies, everybody thinks digital and in terms of APIs."Lisa Morgan is a freelance writer who covers big data and BI for InformationWeek. She has contributed articles, reports, and other types of content to various publications and sites ranging from SD Times to the Economist Intelligent Unit. Frequent areas of coverage include ... View Full Bio