Digital Transformation: Opportunities to Create New Business Models

Prith Banerjee, Senior Client Partner, KornFerryWhat is Digital?

Digital describes electronic technology that generates, stores, and processes data. It can also be termed as using cloud, mobile, social, analytics, big data, machine learning, IOT, AR, and VR; all those digital technologies to be used in transforming the business. Digital transformation is simply an extensive travel to thinking about how to digitize every part of the business, as every part of the business now needs technology to operate.

We are moving through an era where everything will be digital and everything needs to connect. CEO’s of the companies hire top level executives from the IT sector, while keeping the rest of the people in a thousand person organization same, regurgitating the same old way of doing things in a large industrial set up. And as expected, they get struck at efficiently executing the commands of the hired IT professional, as they do not have the right people to do it. So this is where the tag line comes into picture, “Success of a Digital Transformation Strategy is 90 percent about Execution, and Successful Execution is 90 percent about People”. Because the people they have are the people of the old school - they know how to build transformers but they don’t have that agile mind set to build software. In order to be successful by leveraging digital transformation companies have to adopt a different methodology.

Five step approach to achieve success in Digital transformation:

The first step is to build an Aligned organization. In order to be digital, the companies need to have a truly aligned organization – starting from the CEO, board of the company, and the executive committee. They should first have an idea as in what they are going to do in terms of digital and then start to build an aligned organization. So the companies in terms of business outcomes take existing products and build some services around it so that they establish an aligned organization at first place and then go to completely different business modules according to client requirements.

Then in next step comes the need of the leadership. The problem most organizations face is most of the digital leaders have come up through the ranks and they have come along adopting the old technologies and are not updated with the latest innovations. So to be successful, organizations need to have digital leaders in all these top positions who have updated themselves according to the developments in the digital space and if they don’t have then they need to push them out to bring in newer talent. Younger people—who are more agile and risk taking!

Once organizations bring in those people, the thrust is essentially to have the organization designed. There are people who are programmers, coders or building transformers or robots and these people are the ones who have to be updated with newer technologies.

Success of a Digital Transformation Strategy is 90 percent about Execution, and Successful Execution is 90 percent about People

So workforce can be evaluated to check whether they are engaged with newer technologies. For example if the company has a manufacturing unit and the employees there, are using the old ways of manufacturing, here workforce evaluation can be done, to incorporate the new way of manufacturing - infusing AR, VR and IOT and analytics. Thus, the workforce can also be evaluated to implement right workforces to embrace and use the newer technologies.

Further, a cultural shift has to occur in the organizations to recognize the value in the transformation. Larger companies will have to begin to look at their business in a different way to develop a more nimble attitude to shifting digital forces. So in the success of digital transformation, the firm has to impart an atmosphere of asking questions as in what they are trying to do to build a service, instead of blindly following the rules. What is happening now, organizations plainly give workers a bunch of rules requiring them to just follow them to the T. These people are blindly following the instructions and are losing sight of a bigger picture. So an open and forward looking culture where the employees are empowered to try new things must be inculcated rather than going with these very established sorts of processes.

The final part is the connected platform—interesting ideas to leverage people outside the organization, in order to exchange ideas and innovate with them. As per the market status, right now everyone is using apps; all these apps are built on iOS and Android. For instance, in an iPhone there are bunch of apps but these apps are not created by Apple, they are created by the app developers’. So Apple created the iOS platform and they enabled developers’ to write a code. The revenue is shared as, 30 percent goes to Apple while 70 percent goes to the app developer this has created a whole system of millions of apps that are on now on iPhone. The same thing is happening in the industrial sector as well.

If the companies begin to adapt to this kind of approach, then achieving success in digital transformation is no longer a nightmare. Having handsome experience in handling projects on Large Scale IOT Digital Transformation, my five point advice for growing professionals is:

• To be curious and learn new things
• Try to understand the fundamental mission of an organization and align all the things you are doing with those things
• Never fail to take risk
• Assemble a good team and empower that those people are really curious and challenge you
• Empower people with creative ideas