Everyone is talking about digitalization, but many people and organizations get it wrong. To them it means throwing technology at things, hoping that they will get better. What is it really, what does it mean, and how do you think about it and implement it?
Last year I led a digitalization workshop at a company where they were looking increase their digitization efforts. They recognized the need to move ahead (mainly due to changing market demands and the competitive situation), had several topics already under way, and wanted to “speed things up.” During the workshop it turned out that many things were already being done in different parts of the organization, that there was no central digital strategy, that the digitization was not integrated with their overall corporate strategy, and that the initiatives were taking longer than planned, and not providing the expected benefits.
How could they do it better, and what would it take to successfully define a digital strategy and implement digitalization?
What is digitalization?
The main aspect of digitalization means bringing information (data) and people (the users of the data) closer together, and bringing more data into an easily accessible and usable digital format. Digital data is only helpful if the information is used to provide value, accelerate or simplify processes, aid in decision making (as in KPIs), or help us better understand a topic.
Digitalization means evolution of processes, changing in how things are done, and deploying a different mindset that eventually enables the organization to better understand and meet customer requirements. To make digitalization useful it is important to ask the question of what you are hoping to achieve (value), and above all why (see Simon Sinek’s “First Ask Why” Ted Talk) this goal is important.
Digitalization moves processes to (digital) technology and has implications for the people involved as well. They will need to change how they do things, make decisions differently, learn new tools, and understand what is expected of them in the new way of doing things. This must be considered when planning a digitalization strategy, else there is a bumpy and frustrating road ahead during the implementation of new digital technologies.
Three key roles in digitalization (and why they are important)
Three roles are required for successful digitalization in an organization:
- a visionary who wants to drive new technologies forward
- an optimizer who is focused on back-end processes
- a champion who is responsible for consolidating digital activities in the organization
Why these three roles? Each requires a different mindset – the forward-looking visionary, the process oriented optimizer, and the organizational champion. The odds of finding these three traits in one person are slim, so it will most likely require two or three different people to drive these areas successfully. Let’s look at the roles in detail.
The digital visionary
The visionary needs to understand and integrate new and emerging technologies into the product offering. Customer facing digitalization is one of the most interesting parts of digitalization, with possibilities like augmented reality for servicing products, virtual reality for initial product experiences, AI for analytics, integrated web services, IOT, etc. New technologies are arriving at a break-neck pace and can help position a company if these technologies are understood and integrated to improve the value proposition for customers.
The digital optimizer
The digital optimizer needs to look at existing operational processes in the organization and work with the BPM (business process management) team to understand where process optimizations need to take place, and identify specific technologies and systems that can support the needed improvements. A regular “best practice” sharing and review with other organizations can also help to identify technologies that could be suitable for integration. This person needs to understand both the business process perspective as well as the IT and technology perspectives to work with and help the organization to bring the two together.
The digital champion
This is in essence the “Chief Digital Officer” of a company. This is different from the CIO… the CIO is responsible for implementation and functioning of the IT systems in an organization, but not necessarily for process improvement using digital technologies. The CDO role also needs to affect a cultural change in the organization.
The digital champion is responsible for the development of the overall digital strategy of the organization. All efforts undertaken should be known and aligned to ensure that a coherent digital landscape is being developed and that no “island” solutions come into existence. These are later difficult and expensive to remove and reintegrate into a coherent target digital landscape. Making digitalization, change and transformation a part of the corporate culture will also be difficult without someone dedicated to driving this topic.
Phases of digital strategy – your way forward
How should you approach digitalization and ensure that your efforts add value to your business?
1. Understand digitalization
Understand what digitalization is, and what it means for you. What is driving your need to go digital? Is digital the solution, or only one possible solution?
2. Align corporate and digital strategy
Align your digital strategy with your overall corporate strategy. Where do you plan to be in three, five, or 10 years (or more), and what part does digitalization play in your strategy? Why? Be sure to also look at developing trends (both technological and others) to develop a coherent strategy.
3. People, people, people: put the right people in the right place
How many times have you heard that “it’s all about the people”? The war for talent has become more and more prevalent. Find the right people to drive your digital strategy forward. These people need an integrated understanding of technology (what / the tools), business (how / the processes) and people (who / the users).
4. Understand what needs to be digitized: determine your core competencies
Understand your customers (customer journeys), required USPs (unique selling proposition – why should the customer buy from you?), and what core competencies you need to develop to meet customer needs. What needs to be digitized, and why?
5. Make change and digitalization a part of your corporate culture
Since the world and markets will not stop changing, neither should you. Make digitalization and change a part of your corporate culture. Once people get used to change and learn to see it as something positive you have drastically improved the flexibility and resilience of your organization.
6. Put digitalization on the corporate agenda
Above all, put digitalization high on your corporate agenda and treat it as a separate topic to ensure that it does not get dug under in the daily business. This is one of the major change drivers in the world today, and it needs top management attention to stay in focus.
How’s my digital strategy? Questions to ask yourself
Ask yourself the following questions:
- What are the pain points that are slowing down my mission critical processes?
- What can I do to improve my core competencies?
- How can digitalization help, and where will it have the biggest impact?
- How much digitalization do I need?
These questions will point to the key issues to be addressed within your organization, and will provide a basis for your digital strategy. Look through the phases of digital strategy above, and as with any topic, keep moving forward. The future holds a lot of potential that you should not leave untapped.
If you have any comments or feedback, or would like to learn more about implementing agile methods in your organization, please reach out to me at any time.
This blogpost was originally published on the consulting blog of Nils Boeffel at https://boeffel.net/en/blog/