New businesses in the Internet 3.0 age are disrupting business models. Airbnb is changing the hotel industry; Uber and Lyft impacting significantly the taxi business; Amazon making online shopping convenient and with free delivery challenging brick & mortar retailers; Streaming media companies like Netflix are making DVD’s go the way of dinosaurs. Indeed, it’s hard to think of any industry that’s immune to the effects of digital disruption. What are you doing in this “digital age”? If you ignore you may become a dinosaur. So what is the best way to embrace this change and get ahead of the competitive horizon? Here are recommendations for the best way forward.
1. Don’t let legacy practices hold you back in crafting your transformation strategy chess move.
More than not during the years you have been in business, the internal and external stakeholders have developed entrenched habits of the ways of doing business. They may be hesitant to embrace change and/or not knowledgeable about the “digital” way forward. This does not help when you want to conduct an objective analysis to answer the? “To change or not to change”. Here is ideas for developing business strategies and objectives.
To do: To begin with manage expectations of all stakeholders during your digital journey. Assemble key assumptions. Then test these against your proposed changes. Smart way forward is to assemble small teams and let them to conduct tests. Then carefully analyze the results and confirm reasons to move forward.
2. Second for sure remember that you do have a successful business. Do not fix if it not broke.
The basic premise driving need to transform is gain momentum and increase relative competitive edge. At all stages of this transformation, including selection and adoption of the latest digital technologies; you want to make sure the business drivers are directly linked to the options being considered. In what way will the selected digital technology tactic help achieve which specific business strategies? Again test as before the proposed changes.
- To Do: The executive team must task team leaders to provide answers to why change: Clearly state the business case assumptions that have been made and how have they been validated?
“Acumatica has completely changed our business. I just look in the accounting and all the information from the sales is in there… For our business that’s a big deal.” Says Ronald Krieger, CFO Consolidated West Distributing; Watch the Video.
3. The very technology that has been working well now may very well become a liability e.g. the IT Infrastructure. How to manage this change?
Existing business practices lean towards short term thinking, which is a definite problem in the fast rapid pace of change of the digital transformation. E.g. the product/service you use now is very likely to be different next year. If you are planning for the medium and longer term, how will you plan for technology change, and will it mean taking big business risk?
To Do: Get rid of short-term thinking.
4. Build a capability for rapid prototyping and testing the proposed scenario.
Inherently there will be complexity and associated risk. There is better way to resolve this; embrace incremental testing as a go to strategy! You may find data flows that worked well before are no longer applicable. This will be a real problem when you go for the fully scaled-up live implementation.
Excellent strategy relies on rapid prototyping capability and most certainly depends on a multidisciplinary approach. Involving key business subject matter experts internal or external (like IT vendors/consultants); all working together on the same prototyping team. Familiarize yourself with the micro test objectives and apply advanced analytical methods to help make better decisions.
To Do: Model and testing key business scenarios will increase probability of success.
5. Ensure business and technology governance can support business transformation.
In this new world perceived “best practices” may be inappropriate due to the lack of robust data. Using approaches based on applying lessons learned from previous successes and failures, should be standardized as best practices. However, “best” is relative, and organizational inflexibility could be hindrance to change, especially one supported by digital technologies.
To Do: Reliance on “best practices” should be tested for relevance.
Recent industry research shows alarming data. It shows more than half of all enterprise digital initiatives have failed, with only one in eight delivering on their promises. Such a statistic highlights the importance of determining your business “digital transformation” strategy according to your organization’s unique goals and mission rather than listening to digital technology hype.