Digital Transformation (DX) is best known for its external facing successes in generating new revenue streams, creating new industries, and transforming business models. Don’t underestimate, however, the incredible power of DX when turned inward toward enhancing internal organizational productivity.
I’m drawing a distinction here between internal and external DX because:
- The needed skill sets are different.
- It impacts different parts of the organization, thus, the organizational politics are different.
- The success criteria and required measurements are different.
- It drives increased profitability through cost reduction, rather than revenue enhancement.
The remainder of this post/column will be centered around internal DX.
Think of internal productivity-oriented DX as process engineering on steroids, which asks the questions: How can I use digital technologies to . . .
- Reduce operating costs?
- Speed the time-to-market of new products and services?
- Improve decision making?
- Better understand the preferences and actions of current and future customers?
- Enhance corporate culture?
- Increase product quality with no or minimal additional cost?
A second question can also be asked, regarding the digital technologies your company already owns. This question is: How can I use our currently owned technologies . . .
- In new innovative ways at no or minimal additional cost?
- In other parts of the organization that has yet to benefit from its capabilities?
- In unique/new combinations to create new and innovative solutions?
- To replace other existing/internal technologies, thus saving money and reducing the complexity of supporting multiple products with similar/overlapping functionality?
The outcomes of all these questions can be considered productivity enhancements because their long-term benefits (hopefully) outweigh their short-term costs of implementation. They are also considered DX, because digital technologies are being used enhance organizational processes.
The skills sets needed for internal DX are, generally speaking, all under the control of IT. They include Project Managers, Business Analysts, programmers, testers, and all others that work on traditional IT automation related projects. Having this internal control of all needed internal DX resources can be used by IT leadership to their advantage in the following way:
- IT can gain DX experience and demonstrate its DX capabilities by implementing successful DX-based productivity enhancements within the IT function.
- Once implemented, these successful IT DX implementations can be used as a showcase and internal marketing tool to illustrate IT’s DX capabilities to other parts of the organization.
- Review IT’s current projects and approved future project backlog to assess which ones could be considered DX in nature and rename them with DX labeling.
- Use these re-labeled projects as a way to raise C-Suite awareness of DX concepts and as a way to show IT’s thought leadership (and your thought leadership) related to internal DX.
- Lastly, take advantage of this new-found DX visibility as a steppingstone to a seat at the business table as a thought leader on external DX initiatives and strategic planning.
There are also more subtle advantages, where appropriate, of adding DX labeling to current internal projects that describe the business benefit, rather than the technical task being performed. These advantages can include:
- Increased prioritization and funding because of the understood and perceived business value
- Higher adoption rate by those using the newly implemented system/process because of its perceived leading-edge feel
- Tighter association of IT with DX, thus positioning IT for inclusion in other types of strategic business initiatives
In closing, the integration of productivity-minded thinking and DX related concepts can have enormous benefits for company profitability, IT’s internal branding and perceived value, and as a result, the career advancement of all those involved in the process.