The coronavirus crisis has forced unprecedented digitization of many previously manual processes. Over the past couple of months we have seen rapid adoption of new technologies as organizations move to remote working and learning, video conferencing, telehealth, virtual contact centers, and many other types of virtual services. The speed with which business processes have been remade is both remarkable and a testament to the power and flexibility of digital cloud technologies.
However, these transitions have not been without challenges. As is often the case, our ability to implement new technologies generally exceeds the speed with which we can create new processes, train employees, and implement appropriate governance procedures. Social and cultural changes almost always lag technical progress. It will be many months or years before the rapid digitization of many segments of our economy mature, so we should be prepared for a bumpy ride in the meantime.
Digital transformation has become one of the biggest buzz phrases of the past decade. There are untold vendors throughout the world pitching the ability to help companies go digital and reap the benefits of sensor information, predictive analytics, machine learning, artificial intelligence, blockchain, cloud computing, data consolidation, process automation, improved internal and external communications, and decision making. While there are undeniable benefits of adopting digital technologies, the broad notion of ‘digital transformation’ can result in confusion and frustration if misapplied.
The value of any given product or service is not that it’s digital or that it can help organizations abstractly ‘transform’. In its most simple form, value is created by either helping companies and individuals reduce business costs or increase revenue. This is the simple equation for growth: Reduce your bottom line, increase your top line, or ideally, both.
The value of any given product or service is not that it’s digital or that it can help organizations abstractly ‘transform’. In its most simple form, value is created by either helping companies and individuals reduce business costs or increase revenue.
The underlying problem with the notion of digital transformation is that it does not solve any business problem. In addition, “going digital” (so to speak) is really difficult. Implementing new systems, remaking legacy business processes, managing organizational change, and consolidating data systems is challenging and costly work. While it is easy for technology vendors to see all of the manifold benefits that can be achieved when customers adopt their solutions, they rarely take into account the difficulties and disruption incurred in the course of implementation.
So while many of us rush to remake ourselves in light of the global pandemic to become the digital companies of tomorrow, it is always helpful to keep in mind the basics of business growth and change management.
FOR VENDORS
As a vendor of digital technologies, there are a number of common sense considerations to keep in mind when approaching prospective customers to join you on the digital transformation journey.
- Focus on the Customer
This should be the first, second, and third bullets on this list and is nearly so obvious that it shouldn’t need to be stated. Unfortunately, many organizations appear not to have received the memo. As a leader or employee of a technology organization looking to build a culture of customer centric growth there are a few things that can become part of everyday business practice to ensure you remain focused on customer needs.- Find ways to play the role of your customer. Call into your own sales organization posing as a prospect and see how long it takes to get a response. Call customer service and measure responsiveness and the level to which people go the extra mile to help.
- Sit with customers as they use your product and see where they have difficulties. Ask questions on what capabilities they would like to see and what problems those features would help solve.
- Convene customer advisory boards and solicit honest feedback on what you can do better.
- If possible, buy products from your competitors and rate the sales, support, and usability of their solutions as honestly as you can.
- Solve a Single Problem
One of the failings of the digital transformation pitch is the myth that by implementing a sweeping shift of all your business processes in one fell swoop you can remake your business, cast aside the past, and emerge as a profoundly more efficient and successful company. The world simply doesn’t work this way and any organization selling this vision is certain to disappoint their customers. Instead, start with solving one key problem at a time. Take the effort to deeply understand the challenges your customers face and identify a single solution you offer that can eliminate their discomfort. This can certainly be a cost saving measure, but it can also be something that makes the personal lives of your customer easier. People purchase for emotional reasons and if they feel your solution will make their job less stressful and more fulfilling, they will become advocates for your business. In success comes more opportunity and it is important to think of the digital transformation journey as a multi-year process and plan for incremental adoption accordingly.
- Position Value on Outcomes
While digital transformation is both a process and a practice, customers do not want to buy processes. They want to buy outcomes. It is critical to focus on conveying the benefits that customers will receive from digital solutions. These benefits should be accompanied by comprehensive return-on-investment business cases and customer testimonials. When you can concisely communicate the specific, quantitative value of your solution along with strong references, you know you have found product/market fit and are prepared to scale.
FOR ORGANIZATIONS
As a consumer of products or services, recognizing that you can create operational efficiencies with new digital technologies is an important first step. However, it is also important to understand the challenges you might face when moving forward with implementing new systems and processes. Here are a few ways to avoid the pitfalls associated with the myth of digital transformation and ensure a smooth path along your journey.
- Identify a Primary Pain Point
The adage “Crawl, Walk, Run” has never been more relevant when it comes to digital adoption. Note that this does not mean you should wait to begin the journey. Rather, you should plan a staged transition where you can evaluate the benefits and challenges of implementing digital solutions and develop best practices to improve each subsequent stage of deployment. Find a significant pain point that will likely benefit from digitization and automation, implement a solution, and measure the impact. A step-wise approach will uncover unexpected challenges, but will also help you develop a more repeatable playbook to support your efforts when you advance to the next project.
- Invest in Internal Support
It is possible that certain members of your team will feel threatened by the implementation of new technologies, particularly if it leads to automation of previously manual processes. While this is largely the purpose of digitization, it is important to prepare employees for the transition and clearly communicate how these changes will make their lives easier. This will inevitably mean learning new skills and not everyone will successfully make the transition. However, framing the transition as opportunity for career growth will reduce friction, increase buy-in, and generally make the process of adoption easier.
- Hold Vendors Accountable
Many vendors will promise you the moon during the sales process, but only the best will be there to help you through the process and actually deliver on the outcomes they promised. Talk to peers who have already invested in digital technologies for recommendations on the best vendors before making a selection. It is also important to acknowledge that the outcomes you seek are not exclusively within the control of your solution vendors and that you will need to accept their recommendations if you want to achieve the most optimal outcomes. The best vendors will recognize opportunities for a long-term partnership and will be prepared to invest in your success over time.
The promise of digital technologies is undeniable. Smaller organizations will be more easily able to adopt new ways of working as there are fewer legacy systems and processes to remake. While it will take longer and be more painful for established businesses, there is no going backwards. The genie is out of the bottle and companies that cannot adapt quickly enough to improve efficiency and meet growing customer demands for transparency, data accessibility, and ease-of-use will falter. In spite of these truths, digital transformation should be viewed as a practice that will take place over months and years, not a process to implement and move on from. Like nearly everything in life that is worthwhile, it is the persistent small steps we take each day, and the dedication to ongoing improvement that brings the greatest rewards.
