Seven Pivots for Digital Transformation Success

By Gary Audin

Digital transformation can lead to more revenue, higher profits, increased market share, and improved efficiency. It also can help an organization keep loyal customers, increase customer satisfaction, and rapidly resolve problems. Do not expect that this is only an IT effort although IT and the network are integral to the digital transformation success.

I was reading “Pivoting to digital maturity; Seven capabilities central to digital transformation”. The report identifies 7 pivots, capabilities that when developed contribute towards a business successfully bringing about positive growth through digital transformation.

The report covers a survey from November 2018 consisting of 1,200 US based executives. They were knowledgeable of their organization’s digital transformation efforts. The organizations surveyed employed at least 500 people and had global revenue of $US250 million.

Digital maturity is attained when organizations systematically and broadly execute the digital pivots. Digital maturity comes when the assets and capabilities are implemented and adopted. The adoption creates a condition where the organization will experience significant positive business impact.

Lower-maturity organizations usually take a narrow view of digital transformation. They may decide that supporting omnichannel customer interaction or adding robotic process automation for call centres is enough. Higher maturity organizations take a broader view across the whole organization and do not limit their horizons.

Three Top Digital Pivots

There are seven pivots for digital transformation success. Three are foundational.

The first is a flexible and secure infrastructure. The design of the infrastructure needs to balance security and privacy with the ability to respond to business changes as well as agilely support new capabilities. This includes cloud infrastructure, agile/DevOps methodologies implementing technology platforms instead of ad hoc applications, and deploying a cybersecurity strategy. You need to look at digital transformation as a totality, not as set applications. A platform is a reusable collection of assets and capabilities working together to make it easier to produce a product or deliver a service.

IT should be the leader of this pivot and pursue it with an evangelical spirit and wide organization adoption. The report found that 60+ percent of higher-maturity organizations had implemented this pivot in at least five functions. About 15 percent of lower maturity organizations adopted this pivot.

The second is data mastery which involves data usage and analytics to discover insights that help improve efficiency and pursue new business opportunities. Data mastery is not just constructing data lakes. It is also about structured and unstructured data. This is where artificial intelligence (AI) surfaces in organizational processes that enable decisions at the enterprise edge.

Data mastery value allows the organization to make micro insights widely available. The chief data officer should identify and evaluate data assets and build or acquire (with IT support) the necessary platforms and competencies. 

Eighty-eight percent of higher-maturity companies reported that they obtained a positive impact from their use of data, compared to lower maturity organizations at just 24 percent. IT is the driver of this pivot as well.

The third is talent. Many consider talent as the most important operational and cultural challenge organizations face is finding, training, and retaining the right talent. This reminds me of the gap in cybersecurity experts. There are more jobs than people to fill them.

To reduce this gap, organizations have to retool training programs to focus on digital competencies. Higher-maturity organizations are about five times more likely to strongly agree that their organization excels at assisting employees develop digital skills. Human Resources is the key in architecting this pivot using incentives and rewards to guide talent to behave more like the staff at digital native organizations.

The Other Four Pivots

There are four more pivots for digital transformation. Although these are not as foundational, they cannot be diminished or ignored.

  • The ecosystem engagement pivot is defined as working with external partners. This can include startups, R&D organizations, and other groups that are technology incubators. This is important to gain access to resources such as people to help obtain talent, intellectual property, as well as new technologies.
  • Intelligent workflows consists of balancing people, processes, and technology capabilities that can produce positive results. Done properly, intelligent workflows can release talent and resources for higher value projects.
  • Unified customer experience deals with delivering a 360 degree customer view that is available to the entire organization. This includes digital and human interactions that produce an enjoyable and satisfying experience.
  • Business model adaptability means that an organization has more than one business model and has an optimized revenue stream that can positively respond business and market changes.

Get the Pivots Right

There will be many challenges. One barrier can be the existing business model even if it has been successful. Executing the pivots requires cross-functional coordination and shared asset use that may not be supported. The report found that a poorly suited operating model/structure was the most common challenge.

Other factors to limited success are leadership support, budgets, and lack of focus. There are also the problems with acquiring and developing talent.

About 40 percent of the survey respondents reported “upgrading legacy systems/processes” as one of the top-three challenges to digital transformation. This is no surprise. Digital transformation projects amplify these issues when executing pivots such as intelligent workflows and unified customer experience.