The solution to Digital Transformation is to treat it as an equation

In a paper published in This is Money, authors Andy Haldane, chair of the Industrial Strategy Council, and Sir Charlie Mayfield, chair of Be The Business, said increasing technology adoption by businesses and government is essential for the survival of the economy during Covid-19.

Unfortunately very few organisations and government departments have successfully got to the root and transformed. A survey of 500 small and medium firms released alongside the paper reveals one in eight are using systems more than a decade old and another third using systems six to ten years old. This does not surprise me. The fact is that a third said they have acquired technology which has never been used provides a clue that our approach to digital transformation needs to change.

Based on my own experience seeing my organisation effect a digital transformation over a period of 5 – 6 years, I think there are four key issues organisations struggle with:-

1. Defining strategic intent
2. Dealing with technology debt
3. Managing the change process
4. Project execution

Digital transformation uses new, fast and frequently changing digital technology to solve problems. It is about transforming manual processes into digital processes to build user defined solutions which focus on user experience rather than development. Technology supports strategic intent but does not define it. A digital transformation strategy should be informed by analytics, usability and user research and not defined by sales and marketing, programmers or other internal stakeholders who do not buy your products or services.

Digital transformation is also about accepting that all your problems will not be solved. There is no right or wrong, but better or worse. Accept that some problems will never be solved, and that it will take  a really long time to change an organisation which has multiple stakeholders with different agendas. Then you can start to build a strategy.

To increase changes of digital transformation success you need to be very clear on what needs to be transformed. Start small and don’t get stuck in the detail or the challenge could be insurmountable.  Research by the leading management consultancies report that successful transformations are more likely to have been achieved by in-house teams rather than an external digital transformation team.

We all know that the rate of change in technology is beyond exponential! In my own business in a period of two years, we moved from having to script software so we could encrypt information, to adopting a standard Cloud computing solution. The challenge every business leader has is how long do you leave it before you make the decision.

An even bigger problem is legacy technology, built up over a number of years that works but isn’t good enough for a digitally empowered organisation. Trying to move these legacy systems to a new way of working, while maintaining business as usual, is a nightmare. We had no idea of the complexity this would lead to when we tried to move our core operating systems from a legacy platform to a new approach. 

The Boston Consulting Group recommend maintaining the old system for business as usual whilst building a new system, which is not an attractive outlook for an organisation unless they have a host  of capable people and very deep pockets.

The other challenge is whether your customers and suppliers can keep pace.  One of our clients in the public sector has not updated their browsers which means when they cannot access some of our information online we have to allocate additional resource to help them work around it.  If this was the other way around, they would probably move their business to another supplier. 

Digital transformation isn’t about technology.  It is about the vision of your organisation in the future, what services you will offer, what customers you need to either retain or find and most importantly the team you need to help you deliver and keep refreshing that vision.

I have been through 4 digital transformations but they didn’t seem like it at the time:-

1. The arrival of the desktop PC, spreadsheets and word processors.  
2. The internet. The dotcom boom introduced a wide range of innovative ideas, some of which succeeded.  At that time, few organisations had a website and even fewer understood the value of the .com web address, believing that the national suffix was the right way to go.
3. Social media and the opportunity to reach new audiences. The need for interesting content and responsive websites became the norm.
4. Mobile and the lightning pace at which information is shared. 

If there had been resistance to any of these transitions from the people within the business then where would my organisation be now?

You need to take the people with you. Each one of the changes generated resistance because people feared job losses. Digital transformation provides the opportunity to develop people and provide them with the skills they need to work in the new environment. 

Totally replacing an old approach with new has been proven to work. Consider the Wapping dispute 1986 when the UK press moved from the old-fashioned typesetting process based in Fleet Street to new computer facilities in London Docklands. News International sacked 6800 printers in Fleet Street and employed 670 printers in their Docklands offices. Within two years every newspaper in the UK had adopted new technologies. If that transition hadn’t taken place, online publishing and social media, technology would have wiped out newspapers.

Not everybody has the opportunity to make such a major change or indeed the vision, resources and nerve to force it through.

Strategic intent is nothing without effective execution. There are a number of project management approaches available, many organisations are currently adapting an agile approach to enable them to benefit from the development as work progresses.

For a digital transformation this is a double-edged sword. There is a high expectation the work will be done quickly and benefits will flow within a matter of weeks. This isn’t the case. 

If you are embarking on a true digital transformation where you are carrying out fundamental rework of both your processes and technology, you are likely to have to carry out significant infrastructure work. Without the appropriate architecture and infrastructure your digital solution is unlikely to be scalable.

Laying these building blocks will take time and resources and while it is being done, like the foundations and structure of a house, there is very little to see and nothing to use. It is a very frustrating time. 

It is only when the infrastructure is in place and the basic system has been engineered that incremental developments can be launched for the benefit of the business. Again, a double edged sword. 

In my experience, the technology was never the issue, it was the people. You want the best people in the organisation helping to define, review and sign off the transformation products and you also need them running business as usual. Maintaining business as usual, dealing with increased numbers of complaints and ensuring that the knowledge of what the business needs to do is incorporated in the digital solution is truly challenging.

Digital transformation cannot be run like traditional projects with a start, middle and end. There is no end but maybe the solution is balance.

A Digital transformation equation could look like:-

(Ability to define strategic intent) X (cost of resolving technology debt) X (% of change management initiatives that succeed) X (% of projects that succeed) = likelihood of success.

Most commentators put the two percentages in the range of about 30% success, so the chances of all the stars aligning and your digital transformation succeeding is lower than what you might anticipate, but you have no option but to try.