What Defines a Successful Digital Transformation Solution?

| 13th July, 2015

Digital Transformation can mean different things to different people. What is key, is the realization that merely implementing on new technologies cannot help an enterprise achieve digital transformation. What are the key aspects of a successful digital transformation solution for an enterprise looking to take the leap?

Innovation is the buzzword of 2015. One often hears leading CXO’s discussing how they are forging an innovation strategy that is aimed at transforming their company’s business to ensure both long and short-term success.

In fact, The Global Intellectual Property Centre (GIPC) at the United States Chamber of Commerce has found that Malaysia has been the top performer among middle-income countries evaluated in the 3rd Edition of its International IP Index. Malaysia was placed 12th out of 30 countries measured in the index on strength of legal support for patents, copyrights, trademarks and trade secrets. This has put Malaysia just behind high-income countries like Canada, and a full seven places ahead of worthy competitors like China.

But why is everyone talking about innovation? “The main thing that has caused companies to fail,in my view, is that they missed the future,” is one of Google CEO Larry Page’s famous quotes. Innovation is fascinating everyone today because it is all about bringing future to your doorstep while you have been preparing for it. Get innovative or get left behind. Business leaders who recognize the real impact of digital technologies on their industry, customers, partners, and business practices stand to gain an advantage over their competitors in the race to the future of the digitally-enabled enterprise.

"Digital technology has altered, and will continue to alter, the landscapes of business, education, entertainment, and government, and the pace of change and scale of change are accelerating at the individual, societal, and organizational levels," said Marc Strohlein and Fred Magee, adjunct research advisors with IDC's Research Network. "Businesses will have to cope with ongoing geopolitical, economic, and environmental disruptions. Digital transformation is one means of creating "antifragile" businesses that can weather, leverage, and actually thrive on such disruptions."

Most businesses are now rethinking how they engage with their customers, the speed at which

they deliver their products and services, how they innovate, their resilience and the reliability of their operations. Those who thrive in this digital economy will be the organizations that leverage technology to win the talent wars. And, digital transformation is a sure step in that direction.

How do we define true Digital Transformation (DX)? According to IDC, digital transformation is the approach by which enterprises drive changes in their business models and ecosystems by leveraging digital competencies

DX is multi faceted and usually occurs at an accelerated pace. From changes in enterprise leadership to deep changes in the operating model, DX can occur in different forms and create different results for each enterprise that undergoes the change. It is changing the way business is being conducted today. Entry barriers have drastically gone down, customers and employees are feeling more equipped to make decisions and old ways of generating or capturing value are crumbling all around us. Have you thought about the impact DX will have on your business? When do you think will DX transform your customers, your industry and your company? Is DX posing a threat of disruption to your business right now? If yes, even as you are anxious, this is your opportunity to leapfrog the competition!

Every CXO must deeply understand the various aspects of an ideal digital transformation solution to successfully scale the path towards achieving it. True change comes with true preparation.

What are the key aspects of a successful digital transformation solution? A successful digital transformation solution requires a seamless combination of business process and IT or people change that meets business needs with the correct implementation of 3rd Platform technologies, says Ali Zaidi, Senior Research Analyst,IT Consulting and Systems Integration Strategies at IDC. Simply put, DX occurs across five key dimensions : Leadership, Omni-Experience, WorkSource, Operating Model, and Information. Together, they form IDC’s Digital Transformation MaturityScapes framework that provides a view of the breadth of business and IT management issues that encompass leaders who hope to leverage digital technologies for competitive advantage.

Leadership DX: In this transformation a leader has to create plans for transforming leadership practices and attitudes to drive digital transformation in their businesses and business ecosystems. IDC's research on Leadership DX works on the transformational properties of the 3rd Platform, which encompasses mobility, cloud computing, social business, and big data and analytics (BDA).

"Leadership of digital transformation requires a nuanced set of skills and abilities, some of which may not come naturally to many executives," says Fred Magee and Marc Strohlein, adjunct research advisors within IDC's Research Network. "Leading digital transformation is inherently multifaceted and multidirectional — DX leaders must have the ability to create digitally fueledbusiness visions; to attract "coconspirators" including customers, partners, and competitors to help realize the vision; and finally to orchestrate the myriad components needed to actually execute on the vision."

Omni-Experience DX: In this aspect, a CIO has to identify the stages, dimensions, outcomes, and actions required to continually disrupt his/her company’s customer experience in order to maintain market-leading performance. IDC’s research on Omni-Experience DX provides a framework for leaders to discuss and create plans for creating and capitalizing on a multidimensional ecosystem approach. Companies that are able to deliver an optimized omni-experience as part of their digital transformation journey should be able to continually attract and grow loyalty with customers, partners, and employees across the entire ecosystem.

"Delivering an optimized omni-experience across the entire ecosystem requires the entire organization to buy into the digital transformation strategy," say Leslie Hand and Philip Carter, IDC analysts within IDC's Research Network. "Companies that are able to deliver an optimized omni-experience as part of their digital transformation journey should be able to continually attract and grow loyalty with customers, partners, and employees across the entire ecosystem and positively impact their business performance as a result."

WorkSource DX: Business leaders must master not only the disciplines but also the alchemy of combining and managing their talent management and recruiting interactions to create digital gold. IDC’s research on WorkSource DX provides insight on various stages of maturity in enterprise leadership to manage talent, source talent, optimize work, and facilitate a digital transformation mindset.

"Most organizations will find opportunities and business benefits to improve across some or many dimensions. Organizations that can master the orchestration of improving each WorkSource dimension will thrive; those that don't will struggle,” says Cushing Anderson, vice president for Business Consulting Services research.

Operating Model DX: Digitally transforming a business operating model demands a look into connected products or services, connected assets, connected processes, decision making processes and the whole organizational structure. IDC’s research on Operating Model DX speaks on these aspects in great detail.

According to Bob Parker, group vice president and general manager of IDC Retail, Energy, and

Manufacturing Insights, "While operating model transformation is one of the five elements of overall digital transformation, it may be the most foundational for continued success and the most difficult to realize given the long-established practices in many industries. This study will help our clients understand where they are in transforming their operating model and what they have to do to realize the benefits."

Information DX: Information transformation within a digital enterprise cannot happen without involving ourselves with changing the way we do data discovery, understand value development and realization and transform the way we create knowledge and collaborate. IDC’s research on Information DX delves into these topics in detail apart from providing a deep understanding on successfully undertaking an overhaul of your Information Architecture. It also enables executives to prioritize and obtain guidance in leveraging and managing their fastest-growing asset: the information asset.

Leaders in information transformation must treat data as they would any asset as well as invest in a range of technology and people to unlock the monetary value of this information treasure," says Serge Findling, vice president of research with IDC's IT Executive Programs (IEP). "IDC's Information Digital Transformation MaturityScape offers senior leaders a framework to assess their enterprise challenges and create a sound information transformation strategy."

On the whole, the IDC Digital Transformation MaturityScape aims to address how business capabilities for a particular dimension (e.g., Leadership) need to change to improve the business' ability to leverage digital technologies for competitive advantage. In the coming days, we will be delving deeper into other exciting aspects of digital transformation within the enterprise.