Originally Published in Forbes.
With every technology wave comes vast amounts of budgets spent with the hopes that shiny new solutions will magically and instantly lift organizations out of their calcified, sluggish processes up the sleek slope of hyper-competitiveness. Cloud computing is an example of such thinking, and lately, this has been expanded to encompass digital transformation.
There’s no question that digital technology helps open new doors to innovation. The cloud, for example, is an abundance of on-demand, low-cost or no-costs resources on which to launch ideas and build businesses. Remember, though, only humans can launch ideas and build businesses. Software can execute commands, but cannot decide to go into a new market. What is needed more than new technology is bona fide corporate transformation, with an emphasis on innovation, spirited development and shared ownership. Technology plays a supporting role.
I recently had the chance to explore the promises of digital transformation with Rajan Kohli, senior vice president and global head of Wipro Digital. You might assume a leader of a tech-driven organization would be pushing technology front and center. But Kohli sees the world for what it is. “It is a common misconception that digital transformation is all about ‘going digital’ – forcing every facet of the business to be digitized,” he says. “Organizations should instead be focused on re-imagining experiences and outcomes first.”
Forcing digital technology onto existing processes “will not yield the expected returns, whether that be cost savings or improved customer experience,” Kohli emphasizes. “We often see companies focusing on a digital initiative – say a new digital channel – without looking at much broader measures of digital fitness and readiness across the organization.”
What happens is “companies often undertake projects with the belief that technology can solve all problems. For example, implementing a new marketing technology stack to upgrade their global websites will make them digital. That’s missing the most important opportunity. In order to achieve full digital transformation, companies must recognize the need for management to transform itself first, before integrating technology into the mix.”
What is Kohli’s definition of “digital transformation,” then? How should that occur, ideally? A true transformation needs to occur at many levels, he explains — “enterprise-wide change is required to deliver new or re-imagined products and services.” Examples of business-led changes include that of “an established, regional bank with legacy branches and systems that evolves to become a mobile-only bank, delivering an entirely new product and service experience,” he illustrates. In another example, it may be “an established manufacturing company that invents new services and revenue streams from connected devices and data. These are the kinds of transformations that need to occur for companies wanting to be digital.”
A true digital transformation “impacts the entire organization,” Kohli continues. “Companies must have a complete understanding of what they want achieve and how it will resonate throughout the business – before jumping head-first into unknown territory.”
An important element of any transformation is leadership from the top. While many aspects of digital transformation may be part of a grassroots movement within the organization, it’s going to ultimately require inspired, forward-thinking management vision. “The C-suite and upper management will ultimately be responsible for integrating the transformation across the silos,” Kohli says. “To execute this strategy, the C-suite must rethink traditional roles and responsibilities and ensure that a consumer-centric approach is in place to implement these new strategies.”
Where to start then? There is only one place where companies should always stay focused — on the customer. If a company has poor customer service, digitizing its internal operations will not improve that service. “Make the customer and his or her interactions with a product or service the starting point for digital efforts,” Kohli advises. “Many businesses become blinded by the constant overload of new technologies that they fail to correctly assess the value that each new technology will bring and tie it back to the customer’s journey. They let technology lead them, rather than being led from the outside-in and by customer insights, experiences and expectations.
Ultimately, organizations need to constantly re-evaluate and be ready to change how they work – ranging from processes, to organizational teams to ways of working, Kohli points out. “Being digital requires so much of the enterprise to evolve.” Look at the lessons learned from previous technology waves — such as the shift to packaged software and ERP, he says. “The biggest lesson is a company needs to disrupt its own business or it will become obsolete,” he says. “Most incumbents in previous technology waves failed to grasp the significance of a subscription economy based on cloud and SaaS. As a result, they fell behind cloud-first players and saw erosions in their own market. In the past, technology projects meant one-off technology implementations or integrations often limited to a specific function, market segment or channel. Today, enterprises are realizing that going digital requires end-to-end-transformation – with all teams onboard.”
Most importantly, the “fundamentals” of business success that have been in place for decades — if not centuries — still prevail, with some modern adaptations. “While the fundamentals of acquiring and retaining customers haven’t changed, the established rules have all changed,” says Kohli. “Size and scale no longer guarantee success. Many traditional barriers to entry have fallen. As we have seen, a superior product or service can dislodge established incumbents in a very short period of time if they are built from the ground-up with the customer journey at the heart and with agility in how they operate.”