Digital transformations are all the rage of business strategy discussions. An avalanche of articles on how companies will not survive without artificial intelligence, hardware/software robots, blockchain puts fear into executives’ hearts and loosens strings of budget guardians.
Add to that relentless mentioning of how Amazon will eat up your business segment, unless your company changes, disrupts, revolutionizes, and out-amazons Amazon, and the picture is near complete. Grudgingly, every business looked into their analogue mirror and ordered themselves digital remake of this or that, carefully dipping a toe or two into the digital rivers.
And then the pandemic happened.
If anybody ever wished to validate the value of their digital transformation, the pandemic provided a perfect set up. The chaotic transition from “normal” to “somewhat abnormal” to “new normal” in a space of days provided ample of opportunity to see what can be done with pure digital means, as opposed to counting on people trudging to the offices and performing their daily tasks from behind their desks.
Academics and consultants will be cherishing this pandemic event for decades to come. An endless stream of case studies will appear on how companies failed or succeeded in the chaos of the events around them. There will be also some far-reaching pronouncements of what it means to transform for some form of “new normal”. There will be plenty more pronouncements on what information technology will be useful in averting analogue chaos in the future.
What the pandemic really exposed about digital transformation projects?
Digital transformation projects focused on providing consistent customer experience regardless of the channel for interactions provided the richest returns. The truth is, that customer experience should have been the driver and the main objective for your company’s digital transformation projects. A well-executed digital transformation should have produced a seamless transition from people-to-people mode to a people-to-machine mode the day when the employees were ordered to stay at home. The world wide web portal of your business should have instantaneously become the primary way of transacting and communicating with your customers
If it took your staff days or weeks to evacuate their office equipment to their homes and switch their customer-oriented work to all means digital, I am sorry to say that you misspent your digital transformation budget(s).
If your electronic portal was unable to answer customer queries and enable quote-to-cash process execution entirely through the use of AI sales rep bots, specific recommendations provided by an AI-powered engine, optimization-generated execution scenarios for the customer to opt for or out, automated workflows to carry out checks, verifications, execution, complaints, and audits, then yes, you guessed it. You misspent your digital transformation budget(s).
No fax machines. No frantic phone calls and flipping through endless screens, running through documentation binders, or whatsapping screenshots of shipping advice, contracts, receiving slips, authorizations, certificates, price lists, purchase orders and invoices.
If the digital twin of your workforce, and the ways they normally go about their tasks at their desks, has not taken the reins of lights out business execution, you probably lost a lot of your business or you made your current customers start thinking of switching to your competitor. At least that is what a survey by Adelante SCM, BluJay Solutions, and Council of Supply Chain Management Professionals discovered when 61% of the respondents say “Yes” to the following question: “Over the next five years, customer experience will overtake price and product as the number-one brand differentiator. Do you agree or disagree?”
In your company’s project funding discussions, you heard or mentioned words “resilience” and “agility”. Digitalization gives those two words very specific meanings both to describe how your company performs actions internally, and how it makes your company impervious to the speed of market disruption.
Agility of your digital transformation projects meant that your business model adaptation to rapidly changing market conditions and administrative/policy moves by the national and regional governments was closely followed by adaptation of your digital solutions. Digital transformation projects run with a lean startup mindset proved themselves to be able to follow. Digital transformation projects, agile in their name only but run like the classic waterfall IT projects, hindered your ability to adjust. Only months before the chaos of the pandemic, barely 25% of interviewed companies said they were confident that their digital transformation projects were making them more agile and resilient in the way they execute their business model. That admission would make a whopping three-quarters of the digital transformation projects not worthy of their budgets and efforts. Assessing them in light of their usefulness to thrive in the periods of chaos should come up high on Boards’ agendas.
Will the disruption of the decade give momentum to reviewing the priorities for digital transformations? I certainly hope so.
Kris Kosmala works on innovative applications of mathematical optimization to solve real-life business planning & execution problems. All his writings draw on real-life business experiences with his clients.
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