Quite often, when addressing digital transformation, organizations focus on one area from which transformation occurs. A recent study from MIT Sloan asked organizations where digital transformation is led at different stages: early; developing; and maturing. Most indicated that early leadership came from Information Technology, while developing and maturing leadership came from the CEO's office. Unfortunately, operations fell to the bottom of responses in both early and developing digital transformation, suggesting that the link between technology advancement and business operations is less important to stakeholders than other areas, such as marketing and information technology.
Digital Transformation Should Not be Limited to Technology
Though digital transformation must involve technology, and is typically driven by the Information Technology Department at the outset, it should not be limited here. When digital transformation remains in technology, organizations frequently have advanced technology with no substance as a foundation on which real business progress and success can be built. When this occurs the technology either doesn't meet the organization's needs or is not used, making it a waste of effort for the organization. When the efforts are intended to improve profitability, this is highly counter-intuitive.
Organizations that limit digital transformation to technology often do so because they know the transformation is needed to remain competitive in the industry, but do not have a business goal tied to the digital transformation. Without a stronger understanding of why the changes are being made and how they will be used within the business plan, it is likely that the efforts will be unsuccessful.
Digital Transformation Should Not be Limited to External Efforts
Another reason organizations implement digital transformation is for some improvement in customer relations or customer-facing operations and processes. Quite often, the goal of these efforts is to make things easier or more attractive for the customer, so Information Technology works closely with Marketing to make this happen. While this is often beneficial for the organization in the context of customer retention or other customer-related goals, there is more to digital transformation than external efforts. Recognizing this can help efforts to be more successful.
Digital transformation can be useful for the internal processes of an organization, as well. By implementing technology that works internally, staff members can accomplish their goals and objectives more effectively and efficiently, which benefits the company in many ways, including financially. After all, customer-facing components of an organization is only one part of what makes it successful. By ignoring internal digital transformation, companies may be doing a disservice to valuable stakeholders who can have a substantial impact on achieving organizational goals.
Digital Transformation Should Not be Led Only by the C-Suite
Though it is important for digital transformation to have strong leadership from the top of the organization, it should not be led from the CEO's office alone. It is logical that, as digital transformation matures, the C-suite plays a strong role in efforts. This is, in large part, because the efforts must be aligned with the overall business strategy as well as the company's budget, among other things.
However, by keeping the efforts led in the C-suite alone, it is likely that there will be a disconnect between what is intended and how it is executed throughout the organization. Even the best intentions put in place by CEOs and others in the higher levels of the organization can have unexpected implications in different areas of the business. By using leaders and champions at all levels of the organization, the C-level executives will have greater support. In addition, the changes put in place can be aligned with the needs of employees throughout the company, making them more likely to be successful after implementation.
Digital Transformation May be Driven by Products
Many times, regardless of where leadership in digital transformation exists, many companies implement changes and advancements because they relate to specific products and product lines in the company. When digital transformation is product-driven, it is frequently externally-focused, but not always. Companies develop technology that links with products or their uses for customers, so as to improve the customer experience. However, these digital transformations can also occur in efforts to make the development, manufacturing, and distribution of products more efficient and effective within the company. This can be seen frequently in the automotive industry, in which technology is developed to more efficiently manufacture vehicles to keep up with customer demands.
Even when digital transformation is product-driven, it is important that the efforts not be limited to one area of leadership, as discussed above. Though product-driven transformation gives advancements and technology a purpose within the company and its strategy, leadership must be spread throughout the organization to ensure that these types of transformation are successful for the longevity of their uses.
Whether digital transformation occurs to keep up with competitors or to streamline operations and customer relations, it is clear that these efforts must take a holistic approach within organizations in order to be successful. By implementing a number of departments and leadership throughout all levels of the organization, companies can use digital transformation to more effectively achieve their business goals and objectives without causing problems in the long-term use of their efforts and advancements.