So, we are finally coming out of COVID 19 lock-down and regularly hearing the phrase – the new normal.  As we all try and work through what the ‘new normal‘ looks and feels like, it is important that we don’t just digitise our old ways of working, but instead we look to create the ‘new and improved normal’ 

‘The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency.  The second is that automation applied to an inefficient operation will magnify the inefficiency’

Bill Gates

However, there are still many organisations that have yet to really start to digitally transform their organisation and through the lock-down period, have been suffering through lack of online sales or through difficulty to operate whilst people are out of the office.  

In the area of customer service, for both external consumers and internal users, it has been clear that service levels have been heavily impacted through this period and to some extent, is still the case post lock-down as organisations struggle to catch up with a back-log and to regain lost revenues.

 Although only based upon anecdotal evidence, these issues have been mainly caused by the lack of automation in business processes and therefore as soon as employees are away from the office, the customer experience suffers.

‘90% of CEOs believe the digital economy will impact their industry, but less than 15% are executing on a digital strategy.’

MIT Sloan and Capgemini

 So, preparing for the ‘new and improved normal’ is something all organisations should now be focusing on, in order to make their business more resilient in the future as well as more competitive in their marketplace.  This is equally as applicable in the public sector, where customer service and cost efficiency are also key drivers.  This activity is more than just ‘go automate’, but rather starting to plan for, and implement true digital transformation in your business.

 In order to deliver an effective digital transformation strategy and subsequent programme, it is key that there is clear direction in the business strategy outlining the goals you want the transformation to achieve.  Many transformation programmes lack purpose or focus and are often the result of middle management’s desire to experiment with a range of technologies and to demonstrate they are doing something.  However, this approach is often ineffective, as without the top-level business goal and leadership support to actually transform, the necessary company wide business change does not happen.

‘Every industry and every organization will have to transform itself in the next few years. What is coming at us is bigger than the original internet and you need to understand it, get on board with it and figure out how to transform your business’

Tim O’Reilly

 I appreciate this is always easier said than done.  Transforming your organisation from one that engages with and uses digital technologies to a digital enterprise takes more than just a focus on technology.  Areas such as focused leadership, strategic and operational priority, appropriate incentives, appropriate investment, great communication and employee buy-in are key to a successful transformation. In effect, a business change discipline is key to digital transformation.  

So, where do you start?  Here are some simple principles that may help you as leaders of this change.

 Strategic direction

Is your strategic intent for the business outlined in a way that you can align your transformation programme to it? This could be the customer experience you want to offer or your position in the market.  It is key that you have a clear goal for the transformation to achieve and something tangible that the whole organisation can relate to and align to.

Don’t start with technology

We all love technology (well maybe not all of us), and it is important that your technology teams and innovation teams do experiment to understand the capabilities that different technologies bring and  importantly, how they are implemented.  However, it is important to fit the technology to the problem and not implement the technology for the sake of it, without fully understanding the problem that needs to be solved.

Pick a challenge that is relatively narrow, but also involves many parts of the business

When building your plan, understand and identify the key customer and employee user journeys, across the organisation but focus on specific tasks.  Focusing on the customer journey helps start (and keep) the programme realistic and helps give all of the organisation a common purpose.  Optimizing a customer journey challenges every process and existing technology in order to deliver an improved user experience.

After mapping the customer journey, you can focus on how to make each touch point better, faster, and more efficient through the use of digital technologies, plus integrate them into a single experience.   Where you still need to work with legacy systems, explore technologies such as Intelligent Automation that can create a digital experience without having to necessarily rip out your legacy systems.

 Measure what is important

As part of the transformation, revisit your key performance indicators and associated incentives, adjusting them or re-focussing them to reflect your new digital customer journey and what is important, so that everyone from across the organisation is measured and incentivised around the customer.

 Taking an end to end ‘whole business’ approach

Clearly, digital transformation is a team sport and will not have the desired impact if the transformation is limited to a single part of the organisation or a single part of a customer journey or is owned / sponsored by a single person.

Joint board ownership and Internal collaboration across organisational boundaries is a fundamental building block for success, with incentives to deliver overall business transformation as a priority over their individual operational area.

 Where possible, utilise cross functional teams that have board level sponsorship and the mandate and resources to get things done.  Incentivise the team on the delivery of the end to end transformation.

 Operate an iterative / agile approach

We all know that we need to strike the right balance between planning and doing, and no matter how much planning we do, we still won’t get things right the first time.  Successful companies work in an agile way, testing with customers whilst building a solution or process and A/B testing where possible.  This ongoing testing with the client enables them to build something that meets the customer’s (and the organisation’s) needs, now and in the future.

 Successful organisations also constantly test and review their internal digital processes and services, even once the initial transformation has gone live, so they keep pace with the customer and market need.  Continuous Improvement may seem old fashioned, but it is still an important activity in any business.

 Transform in areas where your market is also changing

In addition to existing customer journeys, leaders should also look to areas of disruption in their market or other markets.  It is important that you look beyond your own market for signs of disruption that will eventually head your way.  Examples of these changes could be: IoT / Industry 4.0, digital logistics / supply chain and manufacturing at the edge, e-health, digital media etc.

It is also important that you take into account forthcoming legislation / regulation.

 Leverage innovation as part of digital transformation

Given you often need your digital transformation to help you disrupt in your sector or to react to being disrupted, it is important that your organisation has a strategy for how you will leverage innovation and how to enable innovation to work in conjunction with the transformation team.  

Your innovation team must be able to experiment and identify true disruptive activity whilst not bombarding the transformation teams with lots of ideas that could act as a distraction to implementing change.  Operational teams often need stability to drive efficiency and effectiveness in the processes they operate.  Allow the innovation team to innovate, but bundle those ideas or innovations in phases so that the operational teams do not suffer from change fatigue. 

In terms of budget, when times are tough, innovation budget can be one of the things that suffer and get cut, when in reality, it is often the area that needs protecting if your organisation needs to fundamentally change

 Transformation investment vs annual budgets

When you compare most organisations’ annual budget cycle with the agility that companies need to be able to adapt and transform, it is no wonder that many transformation efforts are thwarted by the lack of funding or access to funding in the right timeframe.

Linked back to the comment above around board level commitment for transformation,  funding and resources need to be available for transformation when needed.  This should not be managed in a classic budget way, i.e. a budget for the year, but a funding line that should be made available or pulled depending upon the transformation project’s progress.  Progress would be measured in line with the KPIs mentioned above.

 Can your IT department support the rate of change needed?

It can be a real challenge to perform digital transformation with legacy IT. But legacy IT isn’t going to go away anytime soon.  Ideally, your IT needs to include separate systems that enable flexible customer-facing capabilities, where new apps and databases can be added without touching the underlying systems that run the rest of the business. This ‘digital speed’ system supports agile development and prototyping, with rapid software releases.  The linkage between the two IT worlds is often data, and enabling data to be accessed by APIs for new systems and processes will be key. 

These ‘digital speed’ systems must also include the analytics needed to gain insights into the customer, which then determines how to engage with and support customers moving forward.

However, multi speed IT is not just about the systems and development, it is also how you adapt funding, approvals, procurement and life-cycle management for different types of IT moving at different paces.

A transformative leadership team 

For an organisation to be able to embrace digital transformation, it often needs it’s senior management to transform itself first, as it’s a leader’s role to provide all of the enablers to its people for the transformation to happen, at the speed needed, as well as set the top down strategy that provides the transformation context.

Senior leaders’ inability to change how they work and how they enable others can often hold back an organisation’s ability to transform.

 If you need support with your digital transformation, please feel free to reach out. I am  happy to share some of my experiences on implementing digital transformation in both the public and private sector.

I will leave you with three quotes that I think capture both the imperative and challenge that organisations face today and, in the future:

‘90% of CEOs believe the digital economy will impact their industry, but less than 15% are executing on a digital strategy.’

MIT SLOAN AND CAPGEMINI

‘It’s no longer the big beating the small, but the fast beating the slow.’

ERIC PEARSON, CIO, INTERNATIONAL HOTEL GROUP (IHG)

“Change is the law of life and those who look only to the past or present are certain to miss the future.”

 JOHN F. KENNEDY