Vijay Sethi, Chairman, MentorKart, CIO News, ET CIO

By Vijay Sethi

We are at the door step of 2023. CIOs and IT leaders across organizations are busy thinking about their IT Budget, IT Strategy, IT Roadmap and the most common answer to the question as to what their key priority is (and no prize for guessing that) “Digital Transformation”

Is everyone really doing digital transformation?

Reality, as I see, is that many IT leaders use the term Automation, IT Modernization and Digital Transformation interchangeably.

In simple terms,

• Automation is about taking the manual processes and adding technology to them to reduce manual work – it could be implementing a workflow system, implementing new or some modules of ERP or rolling that out to other functions, manufacturing locations etc. or building / implementing software’s in areas where we have manual activities today.
• IT Modernization is about taking your current IT Landscape to the next level through upgrades or even entirely new technology. Moving from CRM version A to B or development platform from version X to Y or from technology A to B are some of the examples of the same.
• Digital transformation, on the other hand, is about using new set of technologies to fundamentally transform how a particular process is done or your business is carried out. For example, when banks started doing video based KYC, they fundamentally changed the KYC process or use of AI based Chatbots for enhancing customer experience or using VR technology for pain reduction therapies.

We need to keep in mind that IT Modernization and Automation are not bad targets to set, in fact they can be great stepping stones for the Digital Transformation journey of an organization. Automation and Modernization share some key benefits with digital transformation, such as streamlined processes, improved efficiencies and productivity, but they are never going to change your way of working fundamentally. Do all Digital Transformation initatives really succeed?

We must remember that transformation of any kind is hard, and digital transformations are harder. As per some statistics and surveys, a large number of digital transformation efforts either fizzle out or fail (some putting the numbers between 70% and 80% that fail or fizzle out) and only less than 20% Digital Transformation initiatives (and some consulting companies say numbers could be as low as 10%) are considered successful. A simple definition of the success here is that initiatives were able to meet or surpass the objectives that were set up for them.

If success rate of digital transformation initiatives is so low, why companies still want to pursue?

The reason is very simple, for those who succeed, the benefits are immense and there are so many examples where companies have altered their business models or started new revenue streams or significantly enhanced their products or customer service or time to market etc. because of digital transformation initiatives.

What can a CIO / IT leader do to ensure the chances of success of digital transformation initiatives becomes high

Let me share 5 things that each CIO / IT leader who is or wishes to be on a digital journey should do to make the initiatives successful should do:

• Develop a Digital Transformation Roadmap

Without a Roadmap, it is like getting into a journey where you do not know where you have to go, so, any road will take you. A digital transformation roadmap will provide the plan that moves your organization from its current state (using your current digital processes) to a new state (using new digital processes).

The roadmap will give you and your colleagues a clarity as to:

• Why do we need to transform business digitally?
• What Digital technology interventions (and in what all areas and what time frame) does the company need to stay ahead of competitors in the future?
• What resources are required in the Digital Transformation journey?

It will also help you in

• Establishing vision, mission, and goals for Digital Transformation
• Prioritizing the initiatives
• Quantifying the potential gains
• Getting various functions and people at various levels on-board with digital transformation plan and establish accountability
• Allocating resources and budget
• And perhaps most importantly, bring everyone on same page and avoid duplicate efforts across the organization

• Focus on Cybersecurity from Day 1: We have seen a huge surge in cyber-security crime during last few months – be it cases of phishing, malware; ransomware, spyware, Trojans, financial frauds, hacking, denial of services or other attacks. As the level of digitization increases in an organization, so do the potential risks. You should not make cyber security an afterthought. It should be planned upfront and made an integral part of Digital journey and not a ‘bolt on’.

• Focus on People : Any digital transformation effort will be as successful as the people who use want to make it. There could be potential Resistance to Change to Digitization efforts and globally it is one of the key reasons for failure of digital transformation projects. Digital Transformation is not just about getting or implementing best Technologies but it is about ensuring employees and other stakeholders use the technology to meet business objectives. You need to consider people aspect and look at reasons why people may resist change and take appropriate measures. Measure could include providing necessary trainings and upgrade their skills, having appropriate channels of communication, changing the mindset of the organization to one that realises the importance of digital and of data and data analytics. A culture that is agile and supports experimentation would help digitization efforts succeed.

• Focus on Processes and Policies: Digital Transformation efforts if not accompanied by suitable changes in Processes and policies could either expose the process and policy gaps in the organization and make the entire effort suboptimal or could even derail the Digital Transformation journey. So, you need to review the processes and policies because as they say ‘ what brought you here may not take you there’ – meaning many of the current policies and processes may actually become hindrance in your digital transformation journey.

• Measure Progress Regularly and Take Corrective Actions: Finally, as you progress on the journey, you need to constantly figure out what is going right, what is not going right, what changes can be brought – and these could be because of technology, people, processes or any external factors. Key here is to be objective in your evaluation, learn from issues and mistakes, and be agile in decision making and taking corrective measures.

The author is a Digital Transformation and Sustainability Evangelist, and Chairman at MentorKart.