FEATURE
Digital Transformation Strategy By Matthew Roman
Matthew Roman is the founder and CEO of Vasavah Consultancy , a digital transformation firm based in Manila and Kuala Lumpur . He is a Master of Science in Management Studies candidate from the Massachusetts Institute of Technology ( MIT ) Sloan and an MBA from the Asia School of Business Malaysia . His research is on Digital Transformation in Southeast Asia . matthew @ vasavah . com
DISRUPT OR BE DISRUPTED
Technology has made the pace of business lightning-fast . They must keep up with competition while preparing for future disruptions in their market - making Digital Transformation ( Dx ) critical for incumbent organizations ' long-term growth and survival .
The larger and older the business , the more Dx becomes essential . Larger enterprises are more dug-in into their markets and business models . And although stable and successful , these organizations are at risk to new companies who are born digital natives , with new digital offerings that are part of their day-one launch .
Dx comprises two main parts : digitalization which is employing technologies to drive process efficiency , and digital value creation , which is adding to or changing existing business models to include new digital delivery or digital enablement of products and services .
Think of ride-hailing as an example . Ride-hailing apps have similar base concepts to the old taxi model : you hire a car with a driver to take you from point A to B in a single trip . The main difference is that ride-hailing apps handle booking and payments through your phone instead of you having to stand at a street corner and waiting for an empty taxi . Although taxi companies could have used technologies to make their old taxi model as efficient as possible , in the end , a new digitally transformed model replaced the old model . And this new model works because it ' s on a fully integrated digital backbone ( booking , routing , and payments are handled via an app with no or minimal human intervention ).
WHO LEADS DIGITAL TRANSFORMATION ?
When asked , most managers believe that Dx is primarily the responsibility of I . T . This is wrong because Dx is , in part , the execution of the business ' evolving core strategy . Though I . T . may enable and facilitate , it cannot define and lead the business strategy - this is for the organization ' s executive management supported by sales , marketing , operations , finance , and human capital .
Businesses may appoint a Dx champion . Still , they must never forget that the evolution of the business model and strategy is always the responsibility of the entire executive team and not just one person .
ABOUT PEOPLE
Dx projects are organization-wide , yet executives rarely invite their CHRO or H . R . Managers when Dx meetings are held . Leaders place the success or failure of a digital deployment on their vendors , but ultimately , success is significantly attributed to the company ' s managers and end-users . You can deploy the best software , but no one will use it if people resist the change . Without buy-in , managers and end-users will sabotage the deployment and report blame on the vendor to their executives .
Is the people ' s culture aligned with the intended outcomes of the system deployment ? Do people possess the necessary skills ( such as data analysis ) to maximize the effectiveness of their new dashboards and reports ? Is the company purchasing systems that are too complicated ( happens when " most features " are prioritized over " best fit ")?
People can be the most difficult to shift among the three things in the People , Process , and Tools ( PPT ) triangle . You cannot change overnight your people ' s cultures , skills , and biases . So before new systems and significant changes are deployed , human capital executives should be consulted so businesses may support and mitigate the impact on their workforce .
REGARDING PROCESS
Younger companies usually hope that acquiring a large " best-practice " system like an ERP will provide them with process maturity and professionalization of operations . Contrast this to older companies that are more process-mature with their core competencies and thus require more customizations from their software .
Software solutions must fit existing processes and business needs . The myth of " best of breed " leads to many deployment failures when younger companies try to imitate older , larger incumbent competition . You see this often when newly hired executives from larger , older companies try to bring what worked for their previous company to their new one .
SELECTING TECHNOLOGY
Of the three , Technology can be considered the most malleable because , in most cases , you can select , shape , configure , or customize your software solution . And so , you can use technology can enhance your business ' strengths while compensating for the weaknesses of its people and processes .
This is why a solid Dx strategy must be in place before any technology is selected and deployed . Mere feature lists and demos cannot drive it . Every technology acquisition must be led by executive strategy , aligned with people and processes , and deployed with the entire organization ' s support .
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