Why you can’t outsource transformation and need ultra-transformation
Starting my technology career in the late 1980s I have been fortunate to experience and be part of several waves of digital transformation and the impact this has had on organisations, countries, employees and consumers, writes Chris Minas, the founder and CTO of Nimbletank.
Evolving from mainframes to networks, to client server applications, to frame relay networks – the internet – then Web 1.0, 2.0 and so on, each has had a phenomenal effect on how we work and interact with each other.
Typically the transformational phases seemed to be cyclical ten-year periods. Since 1999, the web has seemed to drive acceleration and reduce cycles of change down to five years. More recently it seems technology is evolving so rapidly that 12-24 month cycles are emerging and seemingly creating a need for more rapid digital transformation which I call Digital Transformation 2.0 or Ultra Transformation.
Digital Transformation 2.0 has been rising on the board agenda since early 2016 and is now firmly set on corporate business and marketers’ agendas. Boards are on their way to making these changes and businesses need to understand the new challenges arising as a result and how to address them.
According to Gartner, 47% of CEOs said they are being challenged by the board of directors to make progress in digital business. In particular, CIOs from the banking and investment services, telecoms and government sectors are placing digital transformation as their number one business objective in 2018.
And it’s also clear that the internal IT customer in general is becoming more empowered: A growing percentage of organisations are pushing the boundaries of bring-your-own-technology programmes to spur new tech discoveries by internal stakeholders.
Keeping up with the pace of change in the industry is one thing, but when it comes to true Digital Transformation 2.0 there are other factors that must be considered to stay ahead of the curve. In a PwC report, 73% of CEOs cite skill shortages as a threat to their businesses and 81% say they are looking for a wider mix of skills when hiring.
An ability to use technology effectively is highly sought after for both skilled and unskilled workers, with 22% of global job growth expected in digital positions by 2022, according to the World Economic Forum. The digital skills gap and the ever-growing chasm between the needs of employees of different generations, customer expectations, in-house skills versus third-party providers, the technology stack and legacy structures are just some of the things giving businesses sleepless nights.
Here’s a look at an eight point strategy for approaching Ultra Transformation:
- Develop a vision and share it: Digital transformation, by its nature, will be as varied and complex as the business itself. Business processes can encompass a whole range of initiatives. You need the business behind you. In order to do this you’ll need a clear, singular vision, the context to your thinking and a simple way to share and communicate this. Everyone in the business needs to be taken on the journey and involved at every step of the way.
- Define a roadmap: A vision is powerful and moving but to deliver and maintain confidence, a roadmap is essential. The roadmap will also allow stakeholders to raise flags regarding impact on their business areas and identify blockers. Always understand what to track, and create a culture of continuous measurement.
- Involve IT early: Even if the strategy isn’t concerning digital transformation the likelihood is it could impact IT, tech stacks and legacy systems. The capital expenditure impact can be large and needs to be considered early on so as not to derail progress.
- Agree your methodology: Agile is great but not every organisation can adopt the methodology. Agile means different things to different people. Define what success looks like at the beginning too and get stakeholder buy-in to this.
- Don’t believe everything that customers tell you: Research is critical for successful transformation and developing customer-centric solutions. However, unconscious behaviours as well as verbal ones provide a true indication of customers’ motivations and drivers. Consider engaging psychologists for this purpose to get to the core of understanding how customers and users change every day and the need to be agile enough to respond to them. One of the biggest challenges is to work at the pace of digital natives like Facebook, Google, and Amazon, which will roll out new products and features every day to suit customers’ demands.
- It’s not all about digital: Even in digital transformation strategies, digital is only a part of the solution. There are many other dependencies and considerations depending on the nature of the business, including manufacturing, call centres, customer service, employees and distribution. Transformation is often of a global nature so culture and language training, for example, may be necessary to help make the service desk aware of regional differences for smoother interactions with customers.
- Pivot: Transformation takes time. Things change – competitors, products, people – and success requires flexibility. The people leading the process need to be comfortable with uncertainty.
- In-house skills versus external experts: The answer is likely to lie somewhere in-between. To deliver Ultra Transformation, you really do need to maintain the direct relationship with the internal workforce, they are your transformation agents with the knowledge and skills to enable the transformation process. It is not realistic to repurpose everyone or lose valuable employees who understand your business.
The true challenge is not only to maintain staff, maintain skills but to also evolve, educate, innovate and create new skills directly with the existing workforce and then build upon those skills until you have a digital workforce in all departments. The new skills required are no longer a commodity that is easy to purchase off the shelf.
It is fair to say that large businesses move at a slower pace than smaller independent specialist digital agencies so there is an argument to temporarily hire highly skilled agencies at the leading edge of technology inside the business to enable the transformation phase to a point where it augments the business until it is ready to transfer these skills internally permanently.
As the market matures it is important to adopt this approach or remain somewhere in between and dependant on external partners. Transform from within by creating the understanding and capability of technology within every person in your organisation and visualise and map what your business will look like in five to ten years. Ask your teams, what processes should be automated, what skills you will need and which opportunities can be created through emerging technologies?
The author of this blog is Chris Minas, the founder and CTO of Nimbletank