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Digital Transformation - A Perspective

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While Digital Transformation might have been seen as cliché or buzzword before COVID-19, its importance is quite evident in post pandemic world. Many businesses across the world quickly implemented Digital Transformation to survive the events brought on by COVID-19.

Every few years Information Technology reaches an inflection point where some of the experimental technologies start to become mainstream and commercially viable and available. This phenomenon creates interesting opportunities for various industries to either create new revenue channels and/or generate operational efficiency at a different level.

Benefits of Digital Transformation

Like any other transformation process, if we understand the key components and the overall process, Digital Transformation can be extremely powerful, liberating, and even life changing for an organization. At the same time, it is also easy to fall for the buzzword nature and optics of Digital Transformation and make it nothing but window dressing. A successful Digital Transformation not only enhances key foundational technical capabilities, but it also increases an organization’s ability to deliver key customer-facing functionality and best customer experience with high speed to market in an agile fashion.

I spent almost 20 years building eCommerce capabilities for organizations in a “Direct to Consumer” department store retail industry and essentially supporting organizations through that inflection point. We can broadly categorize any Transformation across the following three areas and in this order of importance:

- People & Culture
- Technology
- Process

People & Culture

An organization’s most important assets are people. No transformation, digital or otherwise, can happen without transforming people and culture. As more revenue continues to originate through digital touch points and channels, it is extremely important for people and culture of an organization to change accordingly.

While as customers themselves, people experience and expect this change in their day-to-day interactions with other companies, most people seem to struggle to adapt to such a change in their day-to-day work life. Some of it can be attributed to usual ‘resistance to change’ from purely a human angle and the rest of it can be explained by the fact that legacy ways of doing things did bring success over the years so why change a winning formula, right?

Digital businesses require different level of agility, speed to market, and solution mindset from people working for these businesses. It is extremely important to build awareness of these concepts with people so that they can understand why these are important and how this impacts the organization.

Agility is the capability of an organization to adapt to and make the most of the changes in the business environment, and overall macroeconomic trends. As the pace of change in digital businesses is much higher, an organization’s ability to deliver business capabilities and solutions to meet that pace of change defines speed to market. Solution mindset is a key cultural component that can accelerate an organization’s Digital Transformation. It is a subtle change in mindset that takes the phrase “these are the constraints as to why something cannot be done or accomplished” and flips it on its head to “what do we need to do and how do we eliminate the constraints to make something happen.” Just imagine if every associate in an organization adopted this mindset and the transformational power that it could bring to an organization.
Technology:

We can categorize the technology items into two key categories. Foundational, capabilities that are core to support agile delivery and speed to market expectations of digital businesses, and key technology trends that take an organization to a higher level of digital maturity.

Foundational Technologies:

o Automation: To achieve speed to market expectations of a digital business, it is important to implement automation in various aspects of the technology ecosystem:

• CI/CD Automation – simplifies source code and release management aspects of software developmentto help minimize human errors related to environmentmanagement and code deployment.

• QA Automation – to move to two-week agile sprint cycles of software delivery, it is important to have QA automation in place so that sprints can be used for development with minimal time spent in automated quality assurance process.

• Robotic Process Automation–this can be effectively used for automating repetitive business processes to save manual effort and leverage that human potential for value-add work.


o Iterative/Agile development methodologies:
While traditional waterfall methodology was suitable for legacy technology environments, it is important to implement an iterative/agile software development methodology.

o Performance Engineering: As organizations move to being “always-on” and “always-available” digital businesses, high performance of all system components is crucially important.
o Service Reliability Engineering (SRE)&Continuous Improvement: Implementing concepts of Service Reliability Engineering and Continuous Improvement are equally important for Operational Excellence.

Key Technological Trends:

o Digital Technologies: As business transactions and processes continue to move from physical to digital domains, implementation of digital platforms for business transactions and peripheral processes are crucial.
o API-fication: As migration to digital technologies continues, system integrations and business transactions, continue to move to APIs. Increase in IoT solutions further necessitates API-fication across systems.
o Advanced Analytics: Digital technologies create tremendous increases in data being generated which can further be leveraged to gain key business insights using Advanced Analytics capabilities.
o AI (Artificial Intelligence)/ML (Machine Learning): More data is now available across digital footprints which combined with various automation technologiesare now elevating organization capabilities toMachine Learning and Artificial Intelligence.
o Cloud Computing & Cloud Native Solutions: With the advent of cloud computing, we continue to see migration of IT-infrastructure from on-premises to various private/public clouds. As a result, software solutions are also migrating to subscription-based SaaS (Software as a Service) solutions.

Process:

Digital Transformation is not just about new technology implementations; it is also about redefining business processes that bring agility to business activities.

Digital businesses require light weight and nimble businessprocesses so that businesses can easily adapt to rapidly changing business environments. As the pace of change continues to increase, an organization’s ability to change its business processes with similar pace is crucial not only for growth but for survival. This requirement is also driving the elimination of hierarchies and flattening of the organizational structure which in turn facilitates faster decision making and agility.

As customer interactions continue to migrate and morph into customer experiences and businesses move to creating an experience economy, a focus on Customer Experienceis essential. This focus is needed in every customer touchpoint and interaction whether it is across digital channels like websites, mobile appsetc. or other traditional channels like customer service call centers, sales/marketing organizations etc. Thinking through and ensuring best Customer Experience practices across every customer touch point is extremely important for success in digital businesses.

Integrating and applying Innovation in business models, processes, and supporting technology capabilities is another key factor for organizations to continually evolve their digital capabilities and create strategic advantage.

In summary, successful Digital Transformation not only enhances key foundational technical capabilities of an organization, but it also increases an organization’s ability to deliver key customer-facing functionality and best customer experience with high speed to market in an agile fashion. It also helps build an organizational muscle to apply ‘art of the possible’ and a ‘solution mindset’ in everything an organization does.