By Mark Fioretto, Vice President, Enterprise, Dell EMC ANZ
A number of recent studies have been examining how changes in technology, such as the Internet of Things (IOT) from a consumer standpoint, the wholesale move to the ‘Third Platform’ is impacting business.
Most of these studies focused on the technologies themselves: from hardware and software to the new currency of business – the data, to those focusing on how to transform business and digital operating infrastructure, which will help defend businesses from being eclipsed by more agile start-ups born in the digital age.
In all the conversations about technology-driven transformation that I hear, there is a constant theme emerging. The necessary changes a company must make to its operating model, processes and organisational structure, in order to succeed in the digital era.
Organisations’ inability to facilitate and accelerate the transformation of their organisational model ahead of advancing technologies is an age-old problem. The shame of knowing our inadequacies are still very much alive and in full view, has amplified the effects of the digital era, creating a space for new firms to step-in and cause all manner of disruption to many traditional business models.
But organisations aren’t faceless, empty buildings. They are run by people. While technology does the heavy lifting, it is people who intentionally commission the labour. Dell’s global Digital Transformation Index, unveils the shortcomings experienced by companies in this area. Obvious indicators include the fact that only 31 percent of businesses in Australia say the Board is driving digital transformation and that one of the top barriers to transformation is a lack of in-house skills and expertise.
To try and understand this more deeply, it is important to take a look at three key attributes of a digital business, as defined by business leaders and used as a measure of success within the Digital Transformation Index:
Innovate in Agile Ways
With 63 percent of respondents in Australia indicating they have already experienced significant disruption to their industries as a result of digital technologies and 88 percent considering digital start-ups a threat, the pressure to act and transform is extremely high.
T. Bert Lance, former Director of the Office of Management and Budget, the largest office within the Executive Office of the President of the United States, believed he could save billions of dollars by only fixing things that were broken. He popularised the term – “If it ain't broke, don't fix it." The tricky thing is – how do we know what is and isn’t broken? A business process might work ‘fine’ in the present day but should we settle for just ‘fine’; and will ‘fine’ sustain the business in the near-future?
Digital start-ups are carving-up the business landscape. In just 3-5 years, 54 percent of Australian businesses believe they may become obsolete. So, what isn’t broken today, could well be broken tomorrow. How do we prepare for this? To enable organisations to address the unforeseeable future, they need to welcome innovation and agility in all shapes and forms. An interesting phenomenon has started to take shape with many corporations who are struggling departmentally with digital transformation. With the advent and availability of Software-as-a-Service and Cloud based applications, users in the business community are now going outside of traditional IT teams to fund and implement new solutions themselves. These are often interpreted as rogue activities that need to be tracked down, assimilated into current infrastructure and governed more closely. This isn’t seeing them for what they are: innovative ways to solve real business problems or indicators that some business processes have outlived their sell-by date.
For leaders of transformation, it is important to assess the need for change in various aspects of business operations, be it driven by operational enhancement, market need or new revenue opportunity. By opening our eyes to understand that the physical world of networking, application availability and remote access are no longer limitations for transactional systems or processes, we could, for instance, develop a series of micro services that allow the safe and flexible transfer of data across an ecosystem, while saving money and breaking down barriers.
According to the Digital Transformation Index, 70% of businesses in Australia admit to not innovating well and in an agile way organisation-wide. Clearly, something needs to change. Releasing employees’ shackles and opening the door to creative ingenuity could be a company’s saving grace.
Predict new Opportunities
An integral part of digital transformation, business analytics based services are on track for a four-year compound growth rate of 20.3% between 2016 and 2020, according to IDC. Taking data generated by enterprise systems such as ERP, sales, marketing, manufacturing, and placing the right bets on the right insights through reporting and analytics is still a practice that is yet to be refined. Finding just the right blend between the extremes of accuracy and accountability or innovation and daring is where strong leaders can differentiate themselves and their teams. With the arrival of so many different systems, external and internal options, rapid transformation of business processes and people, there are now only pockets of ‘data stability’ that can be achieved.
For someone in the traditional reporting space for example, this presents an emotional challenge as stability, accuracy and trend measurement (the staples of historical reporting) are thrown out of the window and replaced with a ‘free market economy’ of reporting and analytic capabilities that can produce divine insight but can also be undercut by nay-sayers who question accuracy or quality. Finding just the right blend between the extremes of accuracy and accountability or innovation and daring is where strong leaders can differentiate themselves and their teams.
Unfortunately, predicting the future and being able to act on these opportunities is still the unknown, volatile part of the equation. As the research backs-up: 63 percent of respondents admit to not acting on intelligence in real-time.
Demonstrate Transparency and Trust
Transparency and trust is often a golden rule in customer interaction. However, when looking inwards toward organisational digital transformation, transparency and trust take on an entirely different meaning. An organisation’s ability to create a safe environment, where team members are encouraged to share ideas, take risks and shake things-up, could be businesses’ only way to survive in the new economy.
It is a huge leap of faith, and many companies won’t have the stomach for it. They won’t be able to overcome the default position of ‘but it is not possible to do it that way’ or ‘we tried that before’ or ‘how will we have a process to govern this’ and fall back into the old analog ways of managing and executing their business objectives. This is reflected in the fact that only 31 percent of respondents are demonstrating transparency and trust well and organisation-wide. However, if we can pull together those people who do believe and are willing to put themselves on the line, and embrace opportunities brought about by emerging technologies, we can truly grow the business through Digital Transformation.
These are just three of the five pillars outlined in the Digital Transformation Index, but they are also the ones that most directly relate to the people and operational side of the equation. By taking the time to recognise the impact of Digital Transformation on organisations, and especially to individuals within them, and becoming aware of the pitfalls of attempting to drive change simply through technology, we will be able to influence business success more directly.