Haven’t we been in the grips of digital transformation since the 1950s? So, what’s different now? Ian Roderick explains how the influence of digital transformation has ramped up — and how to keep up.
Let’s consider Netflix and Uber. They have only been around for a decade or so but have impacted the way we live so drastically to the point of entering the mainstream lexicon. You’d be living under a rock to not have heard the phrases, “let’s Uber there” or “I’m just going to Netflix and chill tonight”.
How can it be that the world’s largest taxi company owns no taxis and the world’s largest movie house own no cinemas? Organisations like Netflix and Uber are known as ‘The Disrupters’, using technological advancements to emerge as some of the most highly valued companies in the world — leaving those around them wondering what they could have done to keep up.
This current wave of digital change is more profound and far-reaching than what has previously transpired. The difference we are seeing now is that rather than just improving existing processes, digital is revolutionising entire industries.
The term ‘disruptive technologies’ is not new by any stretch (it was first coined in a 1995 article by Clayton M. Christensen), but the scale of the disruption at a social, political and economic scale is — in my opinion — unprecedented.
How do we keep up? Can we keep up?
When I first started my career in IT more than 20 years ago, enterprise systems evolved at a sluggish pace. Mainframe systems were only likely to change if an external driver forced the update. For example, the introduction of new government regulations such as GST. And intel server environments only changed every three to five years.
Because of this, we managed IT at that sort of speed and grew accustomed to it — and for a few years it felt like we had things largely under control.
Nowadays, it can feel like we are continually playing catch-up. The sheer pace of change and innovation generated by the technology and IT industry is far greater than most organisations can handle.
Consumerism of IT, big data, mobility, the Internet of Things, artificial intelligence, machine learning, 3D printing and connectivity are all driving innovation into our organisations faster than we can consume it.
But there is a way to stay afloat. The core skill organisations need to realise is to look at adopting technology innovation in a way that delivers value.
And that means they must first think deeply about how they deliver services and engage with their customers.
The true north is understanding customer wants and needs
To help us deal with and interpret the breadth of digital change, our decision-making must be based on something enduring. To get started, ask these two questions:
- What problem are we trying to solve?
- How do we generate value?
It’s imperative to work from the outside in and not the other way around – making assumptions is risky business and organisations must fully understand the needs and expectations of their customers and the problems that need solving before turning to technology.
The cold hard truth
In reality, few organisations are doing digital well.
A recent Telstra study found only 15 per cent of over 3,000 organisations in 14 countries rate themselves as fully achieving their digital transformation ambitions.
The organisations doing better share a few commonalities:
- Their senior executives approach digital transformation as an organisation-wide priority, not just an IT issue
- Data is seen as a critical asset and managed accordingly
- Innovation is built into the organisation — either as an organisational value or a corporate priority
- The IT team is well connected to the business (there is no “us and them” mindset).
Most importantly, there is a focus on doing a few things well and building organisational capacity.
The keys to success
Think big, act small
To effectively ride the wave, organisations need to think big but act small — have a strategy and long-term plan but deliver early and often. Staying agile and being prepared to adjust your approach as the business, context or technology changes, is a must.
Get good at partnering
Together is always better. Many try to go it alone, but this usually results in lengthy delays, costing both time and money.
Understand what success looks like
As with any good strategy, it’s important to know the end goal. Understanding what success looks like starts with clearly defining the opportunity, knowing the problems you need to solve and developing a plan to measure value based on real outcomes.
Ian Roderick Partner