Once companies have a vision for the future, they can take steps to realize that future. Starting with low-risk, high- impact projects demonstrates credibility and can build momentum for future initiatives. Transformation leaders must take care to bring the company culture along on the journey for initiatives to stay on track, however. So, where do you begin?
Few things are as intimidating as staring at a blank sheet of paper. To start building your transformation vision, investigate and understand what digital transformation means in general, in your industry, and for your company specifically. Develop a granular understanding of your company’s real source of competitive advantage and how digital transformation leverages these advantages to deliver significant new sources of revenue. Remember, transformation must be tied to business outcomes to be impactful.47
There are many proven frameworks available today to help your organization gauge digital maturity. Select one that best aligns to your vision, industry, and region. Fight the urge to take an unrealistically rosy view of your organization, which Vinod Galani notes is common. Be honest and realistic when assessing your place on the curve, and then accept where you are.
Identify the gaps in your people, processes, and technology based on your maturity and future vision. Ensure you understand why these gaps exist and what you hope to achieve by closing them before moving on to the next stage.
Identify the use cases that must be tackled to close these gaps. Any use case that can help drive customer trust and loyalty – like in the areas of quality, regulatory, and safety – can be a good place to start. Regardless, each line of business needs a champion to help define those use cases.
To identify these use cases which can provide proof of concept, consider:
Once these priority use cases are identified, they can be tackled through discrete, rapid, pilot projects. After successfully attacking the low hanging fruit, scale up. On the other hand, “if it fails, then you know that you’re not investing much in the wrong areas, [and] you [can] quickly pivot to a different area.”48 In either scenario, you have learned something and are well on your way to transformation progress. This is also the stage when you may find yourself identifying technology partners to assist on your journey. Carefully vet these potential partners to ensure alignment on goals, industry expertise, and a deep understanding of your business. Once carefully selected, these trusted technology experts can become invaluable partners.
Cloud adoption is one element of the solution. While the switch to the cloud can seem daunting, it does not have to happen overnight. Nor should it. Companies can modernize and transform using a hybrid solution of cloud and on-prem solutions, prioritizing cloud adoption where it will add the most value.
But remember, transformation must go hand-in-hand with a robust change management function. Companies must anticipate resistance to change and have a pre-emptive strategy to discourage disruption. Embedding “change instigators” and “change adopters” at every level – from leadership down – is critical to driving the cultural change needed to transform.49
Don’t get discouraged when initiatives move slower or fail more often that you’d like. Change of this scale can and should be incremental. “Reinvention... is not achieved through one big transformation program,” notes Professor Venkatraman, “but through a portfolio of business experiments that are constantly fine-tuned and refined based on results and external shifts.”50 Ultimately, in the long-term, business transformation happens in two major phases:
PHASE 1: Working more efficiently. This phase is all about working smarter. Focus on process-driven and supply chain systems to gain efficiencies and operate more cost effectively. At this stage, innovation is limited, and operational and revenue models stay basically unchanged. Regardless, this is an important first step and sets a “good foundation” before Jeff Schaubschlager suggests asking “How do I compete with the disrupters? Or how do I become a disruptor?”
PHASE 2: Radical change. To compete with digital natives and other disrupters, entire operating and business models will need to shift. Innovation is key to reimaging the future of business. Rather than projecting “the future based on past activities and present realities,” envision a future that solves customer needs. Then build “new business capabilities rooted in a wide range of digital functionalities” to realize that future.51 Projects designed to “shape future business strategy rather than merely support current business operations” require “cross-functional coordination involving decision-rights, roles, and responsibilities” so the entire executive team must be involved.52
Digital transformation is... about looking at the people, process, technologies for your company. Where you’re at. Where you need to be. How do you get from here to there?”
You cannot switch on and say, ‘Okay, I’m digitally transformed and tomorrow I start saving millions of dollars’... You have a really steady state of showing improvement, establishing a baseline, and then continuous optimization.”
Companies must develop a vision of their transformed future tailored to their organization, so they can map a route to that future, based on an understanding of where they are today. The first steps along the route must be discrete, rapid, pilot projects. These projects must be chosen based on each potential project’s ability to measure success, alignment with vision, and value. Once value has been proven via low-hanging-fruit pilot projects, companies can expand the initiative. Typically, the path to the future begins with initiatives that enable the company to work more efficiently. The longer term may entail radical change as companies transform their entire business to unlock the power and potential of data.
Contact Bruce Beilfuss, Veeva’s Vice President of Strategy, to discuss your organization’s unique circumstances.
bruce.beilfuss@veeva.com
Interacting INTERNAL CHALLENGES and EXTERNAL FORCES make the current state untenable, driving the new business imperative.
Operating within this context, change is needed to not just avoid negative consequences, but also to grasp positive opportunities.
The future state organizations should aim for is characterized by agility, efficiency, and innovation, driven by people and data, enabled by technology.
To achieve this future vision, companies must take incremental steps to fully realize the potential of digital transformation. Some companies will go further and radically transform their businesses, putting data at the center of the value they deliver.
