Navigating the path to successful digital transformation

Today, no sustainable business transformation is possible without embedding digital technologies and analytics into core operations. Digital transformation and generative AI are being discussed around boardrooms worldwide.

In India, these conversations are gaining urgency as businesses look to becoming sector leaders. However, in discussions surrounding digital transformation, the complexities of implementing it effectively are often overlooked.

To truly harness the potential of digital transformation, organisations must go beyond broad aspirations and understand what ‘digital’ and ‘analytics’ mean at the functional level. Successful implementation requires deep expertise in functional areas, technology, and analytics. Companies need to address the realities of execution to ensure that their efforts are aligned with long-term business objectives.

Trends driving the industry

The rush to digitise everything: Businesses are rapidly digitising processes, machinery, and even everyday items like coffee machines and safety helmets. While digitisation can offer increased productivity, it’s important to avoid digitising suboptimal processes. Organisations must first optimise their workflows before using digital tools for them.

Democratised expectations across sectors: A Harvard study talks about the importance of experience in driving the next wave of growth. Whether it’s customer experience, product experience, or enterprise experience, businesses must now meet expectations shaped by the best-in-class across industries. For example, a good fintech app experience might influence customer expectations in the automotive sector. Companies that quickly sense and respond to shifting customer preferences gain a competitive edge.

Data everywhere but insights nowhere: Organisations today possess large quantities of data—from enterprise resource planning (ERP) systems and Excel sheets to legacy systems and manufacturing equipment. Yet, many struggle to synthesise this information and generate actionable insights. The ability to consolidate data into a single, dependable source of truth and derive meaningful insights is critical for understanding strengths, fortifying themselves against threats, and disrupting markets.

The transformation journey

Organisations commonly face the following challenges:

·      Data often resides in multiple systems, creating inconsistencies and inefficiencies in its use. There is data available, however, it is not being used effectively

·      There is no single source of truth, which means similar sets of data exist in multiple places

·      Resistance to adopting new ways of working

·      Digital transformation requires substantial investment, and organisations require guidance on becoming digitally savvy while being able to earn measurable returns

Five key steps for a successful digital transformation

As with any significant venture, digital transformation is a journey that demands careful planning and execution. Here are the five key steps that organisations must take on their transformation journey:

Develop a digital strategy: Identify digitisation opportunities across functions, such as manufacturing, supply chain, and marketing. Prioritise these based on return on investment or ROI, ease of implementation, and required investments. For instance, capital-intensive industries may focus on procurement and manufacturing operations, while consumer-facing businesses might emphasise sales, marketing, and logistics digitisation.

Develop a future-ready technology blueprint: A robust technology foundation with the right building blocks is essential for scalability and sustainability. This involves assessing current architecture, identifying integration challenges, and ensuring the compatibility of the current architecture with future technologies. It is advisable to engage a trained enterprise architect to help build a roadmap tailored to the organisation’s needs. Do not ignore this basic building block for digital transformation.

Digital and analytics tool implementation: Tool implementation requires a blend of functional expertise, technical skills, and cross-functional custodians who bridge the gap between functional requirements and technological constraints. Many organisations lack these custodians resulting in risks such as project delays and unmet expectations.

Centralised data for easy access to insights: Invest in a centralised data platform to consolidate information emitted by digital /analytical tools. This will enable the organisation to have one version of truth and undertake insight-driven decision-making.

Driving employee adoption: Success of even the most advanced tools hinges on adoption by employees. Adoption requires a combination of both ‘push’ and ‘pull’ factors – top-down advocacy and grassroots engagement.

Digital and analytics transformations are essential for staying competitive in today’s business landscape. However, for mid-size organisations to transform successfully, meticulous planning and execution is critical. Building a digitally savvy organisation must be done through the investment of time, effort, and a willingness to learn and adapt.

(Sameer Amte is a Managing Director with Alvarez & Marsal Business Transformation Services)