As digital transformation accelerates, how can executives overcome greater risk and uncertainty? Employ a different mindset and approach for 2021.
In 2020, the digital transformation story was all about rapid adaptation. U.S. businesses – many of them already prioritizing digital transformation – shifted into high gear after the COVID-19 pandemic hit. IT staff worked rapidly to enable remote work and shift resources to the cloud in record time.
What often gets lost in that narrative, however, is the uneasiness of C-suite executives who rightly worried whether they were moving fast enough – or too fast – and if their organizations were making the right technology investments under pressure.
In 2021, these ongoing challenges emphasize the need for a different executive mindset – one that embraces uncertainty, prioritizes agility, and focuses on customer needs to drive technology innovation.
Assess recent digital transformation trends
In a year of economic uncertainty and, for many companies, falling revenues, executives remained focused on digital transformation. According to the 2020 “Crowe Business Challenges Survey,” which examined the sentiments of 256 C-suite officers and executives, 34% of respondents were “definitely investing in new/additional technology” in the near term, and 41% were likely investing.
Those results align with Dell’s latest “Digital Transformation Index,” an October 2020 survey that reported that 80% of surveyed companies had accelerated digital transformation, with a focus on:
- Strengthening cybersecurity
- Enabling remote work
- Reinventing the delivery of digital experiences to customers
But 50% of Dell survey respondents also worried that they weren’t moving fast enough. In early 2021, Crowe digital transformation specialists continued to hear similar concerns from executives at the client companies they support. Questions included:
- With limited budget, where do we place our technology investments?
- How do we keep up with our competition?
- What should our digital transformation road map look like in the face of so much uncertainty?
Reframe digital transformation thinking in 2021
Success begins with a clear understanding of what digital transformation is and what it is not.
“When most people hear the phrase ‘digital transformation,’ they think of technology, but that’s just one aspect of it,” says Simon Riley, principal in consulting at Crowe. “Digital transformation is really about business transformation. Leaders should focus on the outcomes they want to achieve, not on the technology itself.”
Business transformation outcomes are driven by five factors: customers, competition, data, innovation, and value. A customer focus is perhaps the most important, as dialogue and collaboration with customers can result in better digital solutions that address their challenges.
Business transformation: Focus
“Digital transformation is a journey, not a destination,” adds Riley. “Leading companies understand that it is an iterative process, and that success comes with progressive improvements over time. These companies take an agile approach – continuously adapting their digital strategies in response to changing circumstances.”
Set a big-picture vision, but be flexible in execution
A changing economic landscape doesn’t mean that companies must discard and re-create their digital transformation road maps every six months. Instead, they can pursue digital transformation on both big and little scales. Big digital transformation sets a big-picture vision and road map, while little digital transformation focuses on smaller, more flexible projects and solutions to achieve that vision or to build upon it.
For example, a large bank might set a goal to create a 360-degree view of its data, achieving a new level of visibility into its loans, deposits, and investments. This vision would require it to develop a new digital banking platform to curate the data. That’s a big digital transformation, and it might remain unchanged through disruptions like COVID-19. But then come the smaller products and solutions built on that platform to address rapidly shifting business priorities. The bank, for example, could develop new automations to process millions of new loans associated with pandemic-related government stimulus programs.
Launch MVPs and pilot programs, then scale
“Today, many companies are approaching digital transformation through minimum viable products (MVPs) and pilot programs,” says Tony Klaich, managing partner of markets and industries at Crowe. Instead of committing to large-scale, expensive initiatives, they are launching bite-sized digital projects to test their viability and see if they fail fast or succeed. For example, a telecommunications organization could launch a pilot robotic process automation solution to process customer data for billing or sales quotes, then evolve it into intelligent process automation to learn via artificial intelligence.
“There are so many competing interests within a company, and that’s why a pilot or MVP makes sense,” says Klaich. “You just have to start small and find an ambassador. Then keep it moving forward and keep expanding your digital transformation.”
