IT guy, 20 years back (carrying a stack of MIS reports) " I am just here to enable you to make better decisions". A typical CEO now "The biggest investments we are making are in our Digital Transformation projects".
A quick Google trend search (graphic below) on topics of interest, shows that the interest in "Business Transformation" has gone down by over 50% and that on "Digital Transformation" has gone up by 100% in the last 16 years. Microsoft CEO Satya Nadella recently said every company now is a software company. If the ubiquitousness of resource usage is a benchmark of what business an organization is in then all organizations are electricity companies.
When a leader holds a portfolio of running a business and running software projects, one of them gets a step-child treatment. It is anyone's guess which one. The seduction of "digital transformation" is overwhelming. The magic of technology and what it can do has moved it from the backrooms of being an "enabler" to the driver's seat of being the decision-maker. While the leader running the business churns the wheels to keep the lights on, the leader running technology jet sets around the world evaluating technologies, meeting consultants across continents, pouring over complex and colorful PowerPoint presentations.
Most of the headlines are also occupied by unicorns in the tech industry or digital platforms like Uber, Amazon who have created a deep-seated fear of disrupting traditional businesses.
What doesn't help is the constant slew of innovations in technologies that promise astronomical benefits. These hype cycles are relentlessly creating a huge sense of FOMO (fear of missing out) in any ambitious leadership looking at the next shiny thing. It could be big data, cloud, analytics, automation, AI, etc all with any combination of prefixes like "cognitive", "intelligent" or suffixes like "augmented", "control-tower", "center of excellence".
What is alarming about this is the success rate of these projects has been low for years. A recent McKinsey study indicates less than 16% of digital transformations are a success. And even these 16% have an ROI that takes years to accrue. Various remedial measures have been indicated to improve the success rate. Right from proper change management, digitally savvy leaders, tech-refresh of the workforce skills, to changing the type of people being recruited. The fact that these same suggestions have been going on for years without the rate of success improving means they do not seem to be effective.
My view on this is to flip the beast on its head and refocus on Business Transformation and use technology as an enabler. Here are a few factors that would contribute to it:
Value focus
People focus
Purpose focus
Value focus:
Organizations exist for exchange of value. They produce something of value to the society and enable the exchange. Technology needs to be an accelerator of this exchange through value drivers like innovation, ease of exchange, speed of exchange. If these 3 aspects are absent then the technology lacks a value focus.
People focus:
People make the largest (not always in terms of numbers) asset of an organization. Most organizations claim this but seldom walk the talk. People are the key driver for value the organization strives to provide to the eco system it lives in. A critical enabler like technology needs to address the following for people:
Enable people to focus on high-value tasks
Enable decision making in a timely manner
Enable accelerated learning of the changes in the eco-system
Purpose focus:
This is the greater calling the organization has subscribed to. The exchange of value is a vehicle for this calling. This is typically represented in the vision or mission of the organization. Like Google’s corporate mission is “to organize the world’s information and make it universally accessible and useful.” Technology as an enabler needs to be able to serve this focus of the business. This means technological changes need to keep in mind and serve the larger purpose of an organization, not just the here and now of value & people focus.
Any digital transformation is subservient to these focus areas. If none of these areas are being touched and transformed by digital transformation initiatives I would highly suspect the utility of such a transformation as an enabler for business.
Good to have these transformational stages, but how to handle the technology debt created at each transformational process? Also the horizon of thinking is something leadership has to equip it in each and every process for taking the big leap of faith in digital transformation