Are you digitally transforming?

Digital transformation has clearly moved into the mainstream for the majority of companies, with analysts reporting that most corporations are pushing to complete their “wave 1” projects within the next year (“70% of corporations will complete their first wave of digital transformation projects” – Gartner). Case studies published by the major cloud providers highlight some intriguing transformational customers. 

• Effective use of IoT (actually, IoME) by Sensoria Fitness with sensors directly woven into their garments and shoes. Imagine the possible impact when you tell an athlete that they were slacking during practice based on real time feedback provider by his/her shoes?  Better yet, imagine the customer loyalty that is established when your Sensoria heart monitor, including an artificial intelligence algorithm, detects fluctuations in cardiac function and notifies you of a potential heart attack!
• Leveraging advanced voice capabilities, Merck is rapidly advancing their “verbal management” of diabetics. With voice interaction at home, Merck is fine-tuning treatment and management of diabetic patients to ensure improved outcomes.
• Tetra Pak ensures that food and beverages flow, safely, from producer to your table. Using big data and cloud analytics, Tetra Pak can assess production line usage and schedule pre-emptive maintenance to ensure continuous production. When you’re responsible for more than 180 billion packages in 175 countries, precise use of big data becomes a big deal.
• Sales driven via real-time recommendation is a critical piece of any online retail experience where incremental revenue may be captured and that fact did not elude the leadership team at Nordstrom. In their online shopping experience, Nordstrom leveraged a serverless computing architecture to deliver the retail recommendation engine that powers their website.

Each of these examples highlight a compelling solution supported by a visionary leadership team focused on delivering a transformative solution.  The reason I highlight these solutions is to call out the difference between these transformation stories and the “typical” digital transformation journey that I see in many organizations.  The difference is more apparent when we simply state what digital transformation is not.  Digital transformation is NOT a lift-and-shift to the cloud. It is NOT (only) an IT cost reduction project. It is NOT (only) an exercise to eliminate IT CapEx from your financial statements. 

To ensure that your transformation initiative delivers…

• changes in cross-team collaboration and corporate culture,
• enables the “digital education and cohesion” of your leadership team,
• drives expected improvements in productivity, business processes and customer engagement, and
• ensures innovative upgrades across your entire business,

I would recommend that you focus, from the start, on establishing measures of success that ensure your business performance is directly tied to digital transformation.

Whether implemented as a separate KPI scorecard or integrated into your existing business operations, your measures of success must drive upside. Improved margins (as the result of productivity/efficiency gains), incremental revenue (tied to upgrades in customer engagement) or entirely new revenue streams are THE measures that distinguish a top line-driven digital transformation strategy. Especially when compared to the cost savings cloud community that has been established with IT-centric transformation efforts.  Yes, IT cost savings, speed and agility are all expected as part of digital transformation and cloud migration. But these are table stakes, not the ultimate reward. 

If you have any questions or simply need some additional inspiration to understand the upside opportunity that comes with digital transformation, I would reference to some of the early digital transformation research and related publications.  Leading Digital (Westerman, Bonnet, McAfee; HBR Press) is always atop my reference list and the MIT research supporting the story line directly ties to top line performance. Digital masters (the top line-focused transformation teams) produce, on average, revenue growth of +9% and profitability of +26%. 

When I need a bit more prescriptive guidance on how to structure and execute my digital transformation, then my first pick for a reference is The Digital Transformation Playbook (Rogers; Columbia Business School Publishing).  Rogers highlights many different companies focusing on and delivering against a top line transformation strategy. But the real value here is the prescriptive guidance and supporting tools provided by Rogers to help execute your digital transformation project.

After doing a bit of additional reading and setting your top line transformation targets, there is a clear realization that we will need a great team, with great talent, to define and deliver against our vision.  While the previous books address this topic, Digital to the Core (Raskino and Waller, Gartner) is at the top of my list. To complement this recommendation, I will offer a couple of personal recommendations that dovetail with the guidance provided by Raskino & Waller. 

Educate your digital transformation team

A potential point of failure and surely an inhibitor in any digital transformation initiative is a gap in Industry perspective and Company Strategy / Operational understanding.  To begin any digital transformation initiative, I would ensure, via an educational deep dive, that everyone is ‘on the same page’.  Enlisting the entire team in an educational exchange that ensures a refreshed understanding of the business and a common view of future business objectives is an empowering experience for any team.   Taking education one step further, I believe that every leader and team member should receive value from their transformation experience.  For team members, one of the best ‘take-aways’ from a transformation project is a fresh new certification; technical, professional, project oriented, financially focused, whatever.  There are many different certifications that are valuable in supporting digital transformation; and the best DT Leaders are those who challenge the team to enhance their education and secure certification.

Clarity through coupling

To support our top line transformation, we need to ensure a healthy dose of digital transformation input from our traditional “business leaders,” in tandem with the insights and innovative thinking available across our technology team.  To establish success measures, clarify the customer experience, optimize business processes and streamline our approach. A coupling of business and technology leaders is critical.  By coupling key leaders and establishing accountability for specific aspects of your digital transformation, we establish a new level of collaboration and clarity in our digital transformation initiative.  As you launch your digital transformation project, be proactive in discussing the collaboration environment and teams that will be required to drive change across the business and start to develop and publish a new digital transformation team/organization chart with key leaders leveraged, as part of a team, in different aspects of your digital transformation initiative.

Are you digitally transforming? With your top line transformation plan, supported by a certified and collaborative leadership team, your chance of realizing the rewards of digital transformation are certainly much improved.  Do the reading, do the work and trust your team.  Your transformation trophy awaits.