Digital transformation requires fundamental business process changes. To transform to a “digital enterprise” and successfully compete with “digital natives” companies need a holistic approach and end-to-end business transformation, colleagues told participants in a recent DXC TechTalk.
In his book The Digital Helix, Michael Gale describes how Samuel Cunard identified that the invention of the steam engine would revolutionise shipping. He explains that players who merely added a steam engine to a sailing ship were doomed to fail. We think this lesson is apt for today’s digital climate.
Truly digital companies are built on top of digital technologies and platforms that support all of the business process and decision-making capabilities required to run a successful digital business. Most companies, however, focus on building a digital front-end — a “digital veneer.” This is not enough. Unless you want to go the way of the doomed sailing ship builders, you need to transform your business and make it digital end to end. And this includes transforming your middle office and back-office processes and capabilities.
One important consideration is the level of risk your company is willing to take. If your products and services are already digital, then you are probably well on your way to becoming a digital enterprise and your risk profile is lower. But many organisations are not inherently digital and soon realise change is difficult. In fact, true business change, true cultural change, is more difficult than technology change. Changing people is hard. However, you must consider: What is the risk of not changing, of not becoming a digital enterprise?
As you look at your competitors and their digital postures, it’s important to not only consider your traditional competitors, but also to look at what other industries are doing. Who is your next competitor?
With digital transformation, your organisation’s decision makers will be agile enough to proactively address unpredictable market changes. For example, we are working with a luxury goods company to model their end-to-end processes and underlying systems. The effort is helping the IT department regain an end-to-end understanding of how the business processes and application landscape support the business. This is key to being able to respond in an agile manner to the on-going stream of change requests from the business.
We also teamed with a large European state to create new processes and systems to manage the inflow of refugees. This project resulted not only in a more effective and efficient government program, but also enabled a fundamental societal change and had a meaningful impact on the lives of refugees.
To be successful, your digital transformation must permeate your business layer; it must be pervasive in your entire organisation. Enterprises need an agile digital platform for building out, managing, measuring and continuously improving their business processes.
(Dan Hushon, Mahesh Shah and Carlos Lopez-Abadia – one of this blog’s authors – led the TechTalk.)