Grinding at Digital Transformation
After talking to more than 50 companies, we found gaps in how companies drive digital transformation.
Imagine a situation where you are the CEO of a listed company. You just presented a plan for the next three years to the board. You think business as usual will make the company loses significant market share to newcomers in the market. You think there should be a better way to engage with your clients using technology.
The board agrees with you that the company is doing well but has not leveraged on technology to grow faster. The board then decided the company should have a mobile app to engage with the customers. The budget was approved, vendors appointed and the IT team managed the process end-to-end. The whole process took a year and the app was completed on time and on budget.
Two months after the app launch, there was hardly any user. You may lose your job.
This is really, how many behind-the-curve companies think about digital transformation. Building an app or website is easy because we have pre-defined specifications that we can follow and comply with all the committees and governance structures. It is easy because there's a specific path and process that we just need to follow. Ticks all boxes and does the right thing the right way.
Unfortunately, digital transformation is not building a super app for engagement. It is not about upgrading the current data warehouse to make it faster with a bigger capacity. It is not about building web apps or moving data onto the cloud although it may result in those steps.
Digital transformation is integrating digital technology into the way a company conducts its business with objectives of improving customer experience, increasing productivity, exploring a new market, or business model, or improving revenue.
Second situation. Imagine all of your SKU sales from 100 outlets are in an SAP system but it takes a team of 3 full-time analysts 3 days to build a reporting dashboard that the management consumes every week. The team first downloads the SAP data into CSV files, do data cleaning on Microsoft excel and uploads the CSV to an SQL server to merge tables of product names, contract amounts, discounts & promotions. Then, download again the joined tables from SQL into excel, build the dashboards on powerBI, screenshot the graphs and pivot tables, post on PowerPoint, and share on an internal shared drive so the management team and the manager at each of the 100 outlets can see how the performance of their outlet. It usually takes three days or more before the management sees anything.
You may laugh at how silly this is considering how digital technology should be able to streamline this workflow. Unfortunately, there are plenty of cases like these in various companies.
I term this period as time-to-strategy. 'Time-to-strategy is the amount of time it takes for data to be meaningful to the strategy and management team.
To reduce the time-to-strategy, each of these workflows needs to be evaluated by a multidisciplinary team of solution architects, data engineers, analysts, IT infra professionals, and designers. The team should be able to advise and operationalize the improvement in time-to-strategy. It covers the data architecture, storage, the extract-load-and-transform (ETL) process, process automation, data access and governance, dashboard sharing, and access level. It should look at how data collected from the factory floors can reach decision-makers in a form that can augment decision-making.
The improvement in time-to-strategy comes from iterations of small increments. We may need to review the internal process because wrapping digital technologies around bad internal processes and procedures will cast in stone something inefficient.
Behind-the-curve companies also put the burden of carrying the digital transformation effort behind the head of IT. The strategy team should own the effort to do digital transformation, precisely because of the time-to-strategy. While IT is a significant component in digital transformation infrastructure and security, the strategy team should be able to drive the agenda in the multidisciplinary team mentioned earlier.
I believe digital transformation is not about building apps, it should reduce time-to-strategy, and be driven by the strategy team.