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Demystifying Digital Transformation For The Enterprise Sector

by Mandar Marulkar, - Chief Digital Officer, KPIT Technologies February-2018

The key for moving towards the right direction in digital transformation lies in realizing the importance of a digital strategy. Understanding that digital strategy is no longer a separate agenda but the start of the whole scheme is imperative. The best way forward for enterprises is to frame business strategies that would suit this fast-paced digital world.

While enterprises work on forming the relevant business strategy, first they need to observe the weak signals—the ambiguous and controversial bits of information, that are typically hidden in the ‘noise’ of the prevailing organizational mechanisms— and make sense of the information. Companies very often overlook these early warning signs.

Some weak signals are about fine-tuning the business by understanding trends within the current processes, targeting of marketing messages based on social media listening, using data and analytics from Twitter feeds, and so on. Increasingly, many companies are getting better at sensing and responding to weak signals in their operations. But I strongly believe that companies need to focus on weak signals, not just to fine tune today’s business model but, to better understand how the current business model itself could be disrupted and/or enhanced by digital technologies.

It’s time and again proved that many leaders lose valuable time developing an initial strategic response, while not having understood the importance of such weak signals, and mobilizing and reorienting their organisation towards the new direction. If leaders are unable to recognize and respond to weak signals in a timely manner, they might impede their organization’s ability to adapt. Making sense of weak signals is the essence of thinking strategically about the digital future and understanding the possible scale, scope, and speed of these digital shifts.

After identifying the weak signals, enterprises need to answer the question pertaining to what big problem can they distinctively solve and for whom, by taking advantage of digital technologies? Akin to their counterparts in other industries, digital giants and tech entrepreneurs have moved into places where the incumbent companies’

products and services were dominant until the recent past. Incumbents in the automotive industry, who have been in existence for a century or more, are witnessing emergence of disrupting innovation by unconventional companies such as Tesla and Google. Incumbent pharmaceutical industries with a string of patented blockbuster drugs, are shifting their focus to understand how patients respond to a system of treatments and not just individual drugs. People spearheading market research for large multinationals for over decades are now competing for relevance with the likes of Google, Facebook, Amazon and Twitter, who have amassed an unprecedented amount of information about consumers. Big retail companies are seeing a large-scale customer churn with buyers shifting their loyalties to e-commerce platforms such as Amazon, Alibaba, and eBay.

Evidently, every incumbent company needs to establish its relevance by solving big problems, staying ahead on the technology curve and being mindful of the changing business models. This calls for enterprises to quickly set up units that can enable them to experiment with new ideas, take learnings from others, and act at speed. When they realise that their set of sequenced experiments are showing a clear path forward with ways to mitigate risks, they must seize that moment to bring the change. It’s a big moment to move from allocating minimal strategic resources for a few experiments to committing the company to a new direction. They should ask questions such as what tasks with minimal human intervention to automate? What processes to augment with smart assistants? What jobs to amplify with active interactions between humans and machines?

To ensure success, enterprises need to build a ‘Think Digital’ culture. This means, making every employee passionately curious about the digital future and making every leader profoundly uncomfortable with the status-quo. Companies need to build a digital dream team comprising dreamers, designers, doubters and doers who collectively represent different viewpoints but share the same vision. Leaders will need to define with clarity who they want to attract and re skill and determine how they will work with powerful technologies to deliver value.

Companies with a futuristic vision should take a comprehensive view of their transformational strengths and weaknesses vis-a-vis-technology adoption. They will need end-to-end transformation to streamline operations, develop new businesses that serve new customer needs and eliminate businesses that don’t align with their organizational objectives. Transformation on this scale can be a long process. While it will involve a number of challenges, it will also open up unprecedented opportunities.

In my opinion, there is no litmus test or one best way to determine how well a company can prepare itself to begin the digital transformation sojourn. By following the process of understanding the aforesaid weak signals, experiment at the edge by put their best resources and failing fast, along with having a deep conviction about digitization its promises and pitfalls, believing in the ecosystem approach (participation or orchestration) and building the ‘Think Digital’ culture, enterprises will be better positioned to adapt faster to the changes than the peers.