Improving the customer experience with digital solutions, increasing operational excellence by adapting to changing markets and digitally transforming operational processes, improving administrative efficiency – a wonderful new world through digitalization.
This is THE opportunity for IT managers and CIOs to step out of the shadow of the board of directors and to no longer just be “enabler” but rather “driver” of the new business! After all, we digitize with modern IT technology, because our processes are supposed to be faster, more automated, more customer-friendly and cost-effective and are supposed to unleash additional potential – sometimes not explicitly even called for by business. But beware: of the last 5 projects that needed my help and refurbishment, 3 were digitization projects. So it seems they do have their pitfalls…
Why many digitalization initiatives are getting into trouble
First of all, it is probably the complexity of the dependencies in which such a change is taking place. It’s not just about digitizing individual areas or processes. With each building block you come across others which, if you do not include them immediately, will cause a breach of media or logic and thus threaten to undo the whole positive effect.
A holistic digitalization strategy must therefore be first and foremost. The development of a “Digital Ecosystem” includes both technical and organizational components. So first we have to analyze exactly how digitization is defined, which (specialist) areas will be affected, which processes and interfaces need to be considered, how is such a project or program with resources, know-how and budget, etc. set up. Last but not least, this most important initiative of recent years will have to be measured by its contribution to the company’s goals as well as the corporate strategy resulting from it. This means the ball for the sponsorship role is in the court of the entire board and the CEO!
All beginnings are difficult – how to start, where are the problems?
Probably every company will start such a complex project with a lot of question marks and uncertainties. You can’t have everything pre-predicted on your Radar. You have to develop that from the rough ideas into the subtleties. An “agile” approach will be necessary to focus on the important things and to be flexible enough to react quickly and efficiently to mistakes or wrong developments before major losses arise. However, the complexity of the interfaces between the components to be developed requires, in my experience and conviction, a single, unifying “hybrid” program management that brings the individual threads together, coordinates them and at the same time keeps an eye on the maximum possible overall benefit.
There is no one-size-fits-all or “proven roadmap” for a digitization programme. Every company is different, and thus every strategy and every implementation concept is unique. At this point, however, I would like to draw attention to the many pitfalls, hurdles, and limitations that I have experienced in my “healed” projects and programmes, and which any digitalization initiative will experience and how they overcome or resolve them will ultimately decide between success or failure:
- Limits in corporate culture: Digitalization is present in many, if not almost all, areas of corporate organization, especially in “mature” companies. The Board of Directors and departments must relinquish responsibility and redefine their roles in the future digital world. This will not be done without friction.
- Limitations in the organization of companies: It is not uncommon for the accents of the products and services to be redefined in this phase. A completely new, perhaps even project-driven business model is emerging. Digitization is always associated with a ruthless revision and unification of workflows and processes, so that they can be streamlined, digitized and automated. Here, too, beloved habits and competences will be put to the test on a massive scale.
- Limits in technical competencies: Digitization comes with new operating concepts such as scalable, cloud-based and/or mobile solutions. They often come with in-memory technologies and big data (e.g. based on SAP S/4 HANA or similar), Unified Communications & Collaboration (UCC), a digital identity for every employee, digital work places and O365 for efficient access to information, etc. Are we already prepared for this and properly set up? Do we have the process and technical know-how in our own ranks? Do we need external help – service providers for implementation, and experienced project and program managers on our site who can stick to the plan and avoid creep?
- Limits in data quality and data management: The digital processing of large amounts of data will lead to the merciless disclosure of poorly maintained or incorrectly generated data. The effort required for data cleansing in legacy systems and the definition and planning of future data to be collected or generated should not be underestimated. And once you get a taste of it, you will want more!
How to make better progress
The “natural limits” at the start of the digital transformation certainly seem gigantic at first, but they can be dealt with using caution and realism, but not under unrealistic time constraints. And it must be clear that all this will cost a lot of money. However, the pay-offs are at least as large. Last but not least, for most companies, their remaining in the market in the medium to long term will depend on it.
If you want to do it well, you should also consider:
- Measures to secure the Digital Trust and data security. The new cloud and mobile components open points of attack.
- A digital laboratory for building and testing prototypes. This includes a well-thought-out test strategy and concept, such as regressive, automated testing, as well as the capacity of one or more good test managers.
- Digital Reverse Mentoring, a multiplier network, digitization training, a Corporate Digital Committee to initiate company-wide digitization initiatives, annual digitization reports, a digital core team and digitization partnerships. Digitalization will bring a lot of corporate change. Neglecting this would greatly reduce, if not thwart, the main players in the game, who do onboard users sufficiently, thereby severely limiting, if not thwarting, the effectiveness and success of the investment.
- Use Cases to AR/VR/MR, IoT, process digitization, RPA, block chain, smart services, electronic access control and voice assistance including Proof of Concepts (PoCs) with Minimum Viable Products (MVPs), et.al. There is no limit to the entrepreneurial creativity of opportunities here, and in some innovation, there may also be an market advantage that should not be underestimated.
Digitization is certainly not just a short term, modern hype, but a necessity for future competitiveness.
The digitization initiative is not just a few digitization projects, but a complex program that is coordinated with the corporate strategy and strictly aligned with business benefit. Even done as agile.
You have to have the appropriate know-how (process, technology, program management) in-house or at least on the side of the CIO at the conference table with external IT service providers, otherwise it can become expensive and ugly.
The reward is a self-organizing, sustainable and scalable digital ecosystem, a wide range of possible customer initiatives, up- and cross-selling, new customer orders, tried-and-tested use cases and smart services with improved customer experience and operational excellence. And last but not least, the ability to adapt more flexibly to changing markets – as a future perspective for the entire company.