Business Success with Digitalisation
Here, we share some of the best practices to help your business succeed.
Let’s start with the bad news. Research shows that typically less than 30% of digital business transformation initiatives succeed.
In addition, only 16% of survey respondents believe digital business transformation in their organisations actually led to improved business performance and equipped them to sustain changes long term. 7% stated that although performance was improved, improvements weren’t sustainable. So it’s no wonder that 45% of managers don’t think their organisation has the right technology to successfully implement Digital Business Transformation.
Sobering statistics. Reasons given for the high level of failure include lack of employee engagement, alignment with goals and poor communication.
And now for some good news. Digital-first companies are 64% more likely to achieve their business goals! Stick around to find out why and how.
What is Digital Business Transformation?
Whether you call it digitalisation, digital transformation, business transformation or digital business transformation
It’s about identifying what isn’t working as effectively as it could within a business, then introducing change in the form of new processes, approaches, techniques and technologies to bring about improvement.
Organisations undertake business transformation in order to maximise their potential to create additional value, increase efficiency, reduce costs, increase market share, customer satisfaction and revenue.
Digitalisation is about understanding how specific changes and solutions can be applied across a business to bring about positive change.
For some businesses, Digital Transformation is driven by a need to outsource to maximise knowledge, business potential and successful deployment.
Others are motivated by the prospect of developing and harnessing new technologies or creating intellectual property to grow their business. Sometimes, it’s simply about boosting efficiency.
Whatever your specific business needs and goals, effective Digital Transformation ensures the adoption of the most effective processes and systems available to increase efficiency, scalability and growth.
This is not a simple, process, particularly if there is push back against change. But globalisation means there is a limitless pool of talented developers and engineers who can make your Digital Business Transformation a successful venture.
The key benefits of Digital Business Transformation
Digital Business Transformation improves operational efficiency by 40%, which makes it hugely important and vital both to short-term business success and to remaining disruptive in the long run.
Here are some key statistics around digitalisation:
- Senior management figures say Digital Transformation improves speed-to-market by 36% and the ability to meet customer expectations by 35%.
- Industries leading the way in Digital-first adoption include the service sector (95%), financial services (93%) and healthcare (92%).
- By prioritising the customer experience, Digital Transformation can generate a 20-30% increase in customer satisfaction as well as economic gains of 20-50%.
Furthermore, 71% of digitally mature organisations state that they attract new talent based on their use of data. By contrast, only 10% of early-stage digital companies say the same.
The unexpected global change of the last two years has accelerate the uptake of remote and hybrid working models, which has increased the need for organisations to adopt technologies, tools, processes and policies that are fit for purpose.
The end result of this innovation includes:
- Hybrid working patterns
- Revised business goals
- Improved efficiency
- Improve employee experience
- Improve customer experience
- Increased revenue
Key Capabilities of Successful Business Digitalisation and Transformation
It’s crucial that organisations focus on the key business capabilities that directly impact on the success of business transformation activities.
Although many factors must be considered, there are really only a few core capabilities that are critical and will play a major role in whether your business transformation is successful or not.
Focusing on these will help an organisation deliver greater value and realise it’s ambitions.
One approach to defining and designing enterprise capabilities is provided by Deloitte’s Capability Hexagon model, focusing on the following six key areas:
what is the purpose of each business capability, what is it the business does and what can it do? How does it operate, what value does it or will it deliver? The mission is derived from and supports the company’s strategy.
What’s the flow of information, analytics and decision making? Good, timely information helps drive informed decision making.
It’s important to establish clear roles, decision making ability and policies that support integration within and across the business, all functions and stakeholders.
Are all business processes integrated, efficient, optimised? Will they support or directly help with achieving desired outcomes?
Are the appropriate software, hardware, and supporting technology and tools in place?
This is about skills, experience, competencies, infrastructure and planning of your workforce to optimise the talent base in order to carry out the business requirements.
Our top tips for successful Digitalisation
Evaluate your current position
Begin by understanding what the challenges are. Without a clear understanding of the current situation, it will be impossible to develop or implement effective business transformation. Before you can plan for an improved future state, you need to fully understand the current ‘as is’ state of the business.
This means evaluating all current processes, policies, workflows and practices across all business units, functions or departments you plan to transform. Even a relatively small-scale business transformation project will often have interdependencies elsewhere in the organisation so it’s important to do a proper evaluation, regardless of the scope of project.
Once you understand the current situation, you can then start to plan how to address any problems, weaknesses or bottle necks, by introducing appropriate new technologies, tools, processes and approaches.
Get management and employee buy-in
Business transformation initiatives can be a hard sell to upper management, for a whole host of reasons including complexity, resources, timescales, impact and disruption and cost.
However, it is vital to get senior management buy -in. Spending time and effort on this means you gain valuable support for the changes and ensures you have key allies who also influence, define and champion organisational values, culture and goals.
Senior management support can also help in fighting any battles and tackling challenges and in generally communicating and sharing the need for and value of business transformation in helping the organisation achieve its goals and ambitions.
Employee buy-in is equally important. Organisations need employees to support the change process and to align themselves with business transformation goals. In order to gain their support, organisations must help them understand the benefits of Digital Business Transformation.
Why is the business doing this? How will it change? What value will the change bring? Employees will want to know how and if it effects their working life and indeed their future at the company. Their fears and concerns must be acknowledged and addressed and their changing circumstances must be a key consideration. There’s no “I” in team!
Employee engagement at all levels, across all functions and age groups is central to a viable Digital Transformation strategy. There must be frequent, effective and consistent internal communications between departments so that employees can feel informed and that their voices are being heard. Otherwise, they may feel apprehensive, as most people naturally are towards big changes.
Ongoing engagement and dialogue
As aforementioned, good, regular and consistent communication is an essential part of all successful business transformation strategies.
Employees need to understand what’s happening at every stage – from planning to implementation and follow up. Open dialogue about any potential changes should be on a regular basis.
There are many ways to engage your workforce in regular dialogue. It’s about creating an atmosphere where employees feel at ease when sharing their opinion, feedback and suggestions.
Organisations often struggle with this, perhaps through using the wrong internal channels, such as relying on emails and intranets.
It doesn’t have to be complicated; it’s about thinking through the best, most effective options for your organisation and employees.
Focus on communication
New and improved digital technologies, processes and policies are powerful tools to help transform a business – but they rely on people to use them effectively.
One must focus on developing informed, engaged and supportive people across the organisation and do that- it’s about focusing on and improving communication in order to maximise your digital business transformation efforts.
Focus on clear, ongoing communication from the start – within the project team and within and between management and employees at all levels and across all functions and locations.
As well as keeping everyone in the loop, informed about what’s happening and why, what their role in it is and what resources are available to help, effective communication is one of your most powerful tools to laying the foundations for successful and sustainable digital business transformation.
Develop efficient change management
Well planned change management is pivotal.
A carefully planned change management process means you will be able to track, analyse, measure and better understand any changes while gaining insight into the impact of those changes across the organisation.
Those involved in change implementations need excellent communication skills to ensure the right information is available when needed.
These skills will break down barriers to change by sharing why change is happening and the benefits and value change will bring.
Setting goals and taking action
It’s important to set short term and longer term goals and clearly communicate them.
People need to know what the goals are, how and when they will achieve them. Smaller short-term goals are good for motivation and progression towards the end-goals of transformation.
Milestones are a great way to mark key stages and achievements along the road to the greater long-term goals. Businesses must remember to celebrate their achievements along the way.
For motivation, it is prudent to consider and state timescales and deadlines to create that sense of urgency.
Without this, it can lead to apathy or inaction particularly on a longer term, more complex transformation. Project leaders and managers should clearly communicate a sense of urgency and reason why the business transformation project needs to be implemented now rather than kicked down the road.
Remove the fear
Change often results in uncertainty and fear which can be major barriers to successful digital business transformation, or digitalisation.
Fear and uncertainty cause insecurity and frustration and can lead to silo thinking, lack of cooperation, hostility, lack of trust and at its worst deliberate attempts to slow or frustrate progress. Managers, project leaders and those involved in communications around the transformation are all responsible to help manage and address barriers, fears and conflicts that arise.
It’s natural that people will be anxious when faced with change. Research shows that only 38% like getting out of their comfort zone, which means 62% are not comfortable with change.
For some, business transformation can prompt thoughts that their skills or experience will no longer be needed or they’ll be left behind, unable to cope with new changes and technologies, particularly when it’s a digital transformation.
In reality, despite employee fears, research suggests 67.8% of companies say technology disruption has had a neutral-to-positive impact on job creation whilst 37.3% report a net increase in job creation as a direct result of digital business transformation initiatives.