In late November 2014, Montreal hosted a “Change Café” organized by the Centre d’Excellence en gestion du changement. One of the topics discussed was digital transformation.
WHY THE BUZZ?
The MIT Sloan Management Review and Cap Gemini Consulting define digital transformation rather broadly, as the use of digital technologies (social media, mobile devices, embedded and analytical tools) to allow for major operational improvements.
Digital technologies have become indispensible in both our professional and private lives, redefining much more that our work tools. In fact, they’re in the process of redefining our management tools, including the ones we use to manage transformation projects – which explains our keen interest in this issue in the past few years.
As an example, after going through serious financial difficulties in 2009, Starbucks decided to invest in digital technologies to get closer to its customers. The company created the position of Vice-President, Digital Projects, which was filled by Adam Brotman. His very first initiative was to offer free Wi-Fi access in every Starbucks location, as well as free access to certain publications, such as The Economist, on the homepage of the Starbucks website. More recently, the company has made it possible for customers to pay with their smart phones – a move that helped raise Starbucks’ stock value from about $8 a share in 2009 to nearly $73 in July 2013.
CONCRETE AND MEASURABLE BENEFITS
According to the Altimeter group, there are many benefits to digital transformation, including:
- A more modern, more human vision of the organization
- The emergence of a strong push towards innovation in other parts of the organization
- Generating concrete competitive advantages, recognized by management
- Noticeably improved cooperation among different departments
- More effective decision-making and process appropriations within departments
- A better knowledge of the nature and location of the data available in the organization, leading to improved consumer knowledge and more easily demonstrable ROI
- Improved customer loyalty
TRANSFORMATION THAT COMES WITH HUGE CHALLENGES
According to a 2013 survey of over 1,500 executives and managers from various industries, managers believe in technology’s potential to bring transformational change to businesses. However, they say they’re frustrated to see how hard it is to achieve good results with new technologies.
- For 78% of respondents, digital transformation will become critical to their organization within the next 2 years.
- 63% even think that the technological shift is happening to slowly, mainly due to the lack of a sense of urgency.
- However, only 38% of CEOs have put digital transformation on their agenda.
- Although 93% of employees surveyed consider digital transformation is the right thing for their company, this vision is shared by only 36% of their bosses.
KEY IMPLEMENTATION PRINCIPLES
As for any change-related project, digital transformation must be implemented using the best change-management practices, which means following these steps:
1. PREPARING employees
2. ESTABLISHING the project’s foundations
3. MOBILIZING the organization
4. SUPPORTING the transformation
Because digital technologies are brand new, internal experts are hard to come by. That’s why it’s important to put together a digital transformation team in order to make the transformation last. This team should include strategic and technological advisors who, according to Altimeter, should be tasked with educating stakeholders, establishing an excellence centre, and creating a functional partnership with the organization’s IT and marketing departments.
TRANSFORMATION MANAGEMENT: THE FUTURE IS DIGITAL
Several companies – including ours – that specialize in guiding clients through organizational and technological transformation have developed digital tools to better assist companies in their transformation process. This benefits consultants as well as their clients. We’ll explore this topic in the second part of this article, coming soon.