Directions for digital transformation in 2020

Digital transformation is all very well, and we've heard much about it in recent years. Has it really taken off?

Source: Citrix. Pavan.

“For the last few years, digital transformation has been all the rage. But businesses can be in a state of digital transformation for years and never get anywhere. We have all heard how the promise of digital transformation will change user experiences around the world. Yet, when we engage with our customers it is very rare to hear a story about how technology will enable their new business models in the next three to five years,” shared Prem Pavan, Area VP, Asia (ASEAN & Korea), Citrix, a global digital workspace platform.

“In a world where the digital gig economy is growing exponentially, many enterprises that are stuck with legacy technologies, and are piling on more technology for the sake of it without thinking about how that will affect emerging business models, will be doomed to fail.”

Michael Wilkinson, Global Segment Leader, Energy Digitalization, DNV GL – Energy says we are firmly within the digital transformation cycle.

“Are we ready to move beyond digital transformation? No! If anything, I’d say we need to go back to basics. I think of a progression: we start with digitisation (making things digital), progress through digitalisation (business opportunities created by digital technology) to digital transformation. And if we don’t get digitisation right, our efforts to extract business value are futile and business leaders and shareholders become disillusioned.

“It’s time to move beyond the hype of digital technology and focus on getting the details right. For 2020 I predict more focus on digitisation and productisation: seeing pilot projects through to scalable solutions,” he said.

Dialing down the complexity

Source: Dell Technologies.
Clarke.

In a blog post, Jeff Clarke, COO and Vice Chairman, Dell Technologies, says that data visibility will be a top priority in 2020. “(Organisations) lack data visibility – the ability for IT teams to quickly access and analyse the right data – because there are too many systems and services woven throughout their IT infrastructure. As we kick off 2020, CIOs will make data visibility a top IT imperative because after all, data is what makes the flywheel of innovation spin,” he said.

“We’ll see organisations accelerate their digital transformation by simplifying and automating their IT infrastructure and consolidating systems and services into holistic solutions that enable more control and clarity.”

New business models

Source: Cloudera. Micallef.

“Besides investing in technology, businesses will also need to transform their business model to compete more effectively in the digital economy. We foresee more organisations in the region embarking on a journey to become a one-stop centre in 2020, to deliver more convenience to customers.

"However, this will require businesses to move away from the traditional value chain and rethink the way they develop and deliver their products. In order to run on an 'as-a-service' focused business model, organisations will create their own communities and ecosystems with other businesses, collaborating and working together, to deliver an all-encompassing service,” predicted Mark Micallef, VP of Asia Pacific and Japan, Cloudera.

Micallef elaborated with a car purchase analogy. “Traditionally, consumers will head to a dealership or online website to select a car they desire before purchasing it. However, they will also need to pay for additional costs such as car insurance and petrol. In the near future, consumers will be able to pay a monthly fee to use a car as they need, similar to the Access from BMW service in Singapore

“The subscription fee for such services will include the miscellaneous costs as the car dealer will work with their partners – such as automotive insurance and repair shops – to provide comprehensive offerings to consumers. We, therefore, expect to see the rise of new business models that will be created through ecosystems, in which each company will bring a piece to the puzzle to drive growth in customer lifetime value.”

Think people, partnerships and process, too

Sudhir Agarwal, CEO, Everise, a customer experience company, says that AI is being woven into our daily lives and will continue to augment our productivity, rather than replace us. “This, and digital-fatigue will enable a shift in behaviour from being always-on to being consciously-on. Effective workplace transformation - and the employee experience - is the next battleground,” he said.

“Businesses need to be mindful that as technology becomes more advanced, the human element becomes increasingly vital. Where digital transformation changed how businesses delivered services on the whole, emerging intelligence technologies affect the productivity and analysis of an individual. Businesses need to have a proper strategy for both people and platforms.”

Agarwal stressed that digital transformation cannot be treated as a silo-ed IT project. “All departments need to take ownership in order to ensure that end solutions are viable and scalable over the long term and IT needs to ensure they are providing council across the board,” he said.

He also emphasised that businesses should 'eat their own dogfood'. “That is, ensure you are testing your solutions on your employees. This will help drive a transformational mindset across your organisation and improve digital literacy. Digital transformation means nothing if you aren’t investing in your people.”

Tomoko Yokoi, Researcher and Writer, IMD Global Center for Digital Transformation, recommended working with external partners. “Organisations seeking to transform in a hyper-disruptive landscape have difficulty guessing what the markets wants at any given moment. To succeed, organisations who democratise their innovation efforts by building and operating an open digital ecosystem with products and services not only from their own company, but also from competitors, are positioned to succeed,” she said.

“This digital ecosystem approach enables organisations to enhance their business agility by being hyper-aware about market changes and being more informed. Application programming interfaces (APIs) will continue to be a key enabling technology to connect and build these ecosystems for digital transformation.”

Look within

Source: Telstra.
Andriesse.

Marjet Andriesse, MD, Asia Pacific, Telstra, says that good decision-making is vital in making the most out of the digital transformation process. “According to our research focused around disruptive decision-making, Singaporean organisations often focus heavily on technology during their transformation efforts with less attention on the associated people and process considerations.

“While technology is important, our research shows us that a balanced approach will yield much better results in the long run. There is a clear opportunity for business leaders in Singapore looking to advance further on their digital transformation journey by rethinking their digital transformation plans from the ground up,” she said.

“This means thinking about the role of employees and what is necessary to support them as they learn new ways to think and work. Technological innovation needs to be tempered with efforts to prioritise and strengthen the employee base. Without creating a workforce culture that supports digital transformation, companies will not reap the full scope of benefits they are seeking.

“While there is no silver bullet for success in digital transformation, there is certainty that successful leaders in 2020 will be those who bring people, process and partnerships together around new technologies to increase digital maturity and build new revenue streams that will drive growth.”

Source: Cisco. Iyer.

Vish Iyer, VP, Architectures, APJ, Cisco, focused on the business mindset required for digital transformation. “Effective digital transformation demands a disruptive culture of experimentation and risk-taking to serve customers, employees in more meaningful ways. It’s all about people learning fast, failing fast, and fixing faster in today’s digital world – a massive shift from being process-driven to performance-driven. It’s the active reimagining of our organisations from a new generation mindset who grew up being digitally native,” he said.

“Last year, a total amount of US$1.3 trillion was spent on digital transformation by organisations across the world. Emerging technologies like artificial intelligence (AI), the Internet of Things (IoT), cloud are enabling this transformation by using automation to finetune the enterprise workflow process through synchronising the work of multiple people in multiple silos. However, digital transformation is not only about upgrading technology because that is like just upgrading the business hardware. Real transformation only happens when any company makes culture its operating system.”

New leadership approaches

Source: SolarWinds.
Adato.

Leon Adato, Head Geek, SolarWinds predicts more convergence between the C-suite and the IT department, allowing the two to jointly “identify common ground to achieve modernisation, digitisation, and transformation”.

“Technologists and executives historically haven’t understood each other. This lack of understanding has added layers of complexity resulting in expensive misunderstandings for organisations as they seek to modernise. Evolved C-suites will identify this challenge and see it as an opportunity to help bridge the language gap between IT and executives,” he said.

Forward-thinking executives will even seek mentoring opportunities with tech professionals, which ultimately results in better use of technology for businesses, Adato added. “Changing the dialogue with IT means leadership won’t have to distill technical jargon, and they can more effectively work toward the common goal of ensuring business performance,” he explained.

Nikolaus Obwegeser, Research Fellow, IMD Global Center for Digital Transformation, said that the role of the chief digital officer (CDO) has been "doomed from the beginning". “Intended to reduce the uncertainty surrounding digital and assign responsibility, many CDOs learned the hard way that they were set up to fail: ambiguous roles, limited authority, and a general lack of understanding for their job across the organisation.

"Ten years later, we know that single the most important KPI for CDOs is how fast they can make their own job redundant – by planting the digital seed making every single employee a CDO that embraces digital innovation,” he said. KPI stands for key performance indicator, an agreed measurement reflecting performance standards.

Source: Cisco. Dane.

Don't forget security

Stephen Dane, MD, Cybersecurity, APJC, Cisco said that complexity is the enemy. “With more people and devices connected, there will be a heightened focus on identity and passwords. From a threat landscape perspective, ransomware will continue to be a menace while increased connected devices from factories and smart cities initiatives, for example, will lead to greater IoT cybersecurity risks that organisations will have to be prepared to tackle. The move of application-based workloads to multiple clouds will be another area that businesses will have to stay on top of, signalling the need for security to be the underlying foundation of any digitalisation effort and not an afterthought,” he concluded.

Thinking about it wrong?

Source: IMD. Professor
Wade.

When all is said and done, could we have been approaching everything the wrong way? Professor Michael Wade, Professor of Innovation and Strategy, IMD Business School in Singapore and Switzerland, suggests that the main idea behind digital transformation - that businesses are moving linearly from a non-digital state to a digital state - is flawed.

“In 2020, most companies will realise that transformation is not a singular event but a perpetual process of adaptation to change. Instead, companies will focus on building themselves into agile organisations optimised around three capabilities: keenly sense technological, social, competitive, and environmental changes that may impact their performance, drawing on this information to make quick, evidence-based decisions, and translating those decisions into executable plans at speed. In 2020, agility will be the new transformation,” he said.