Your guide to digital transformation
Digital transformation is not about changing strategies, but rather about being nimble in the marketplace with new capabilities. We examine the methodologies and processes that improve business function for the better.
Transformations streamline processes and eliminate friction to improve how a business operates. To truly digitally transform, a business requires understanding all aspects of that business and its strategy, so that technology can be thoughtfully designed and implemented to achieve the broader business goals.
“For a corporation to begin a digital transformation, they need to think about where they want to go with their customers, business product, offerings and the business objectives they want to achieve – digital assets are yet another business tool to grow, optimize and expand your business,” said David Thompson, Chief Information and Technology Officer for American Express Global Business Travel.
You can’t just talk to someone once and take the design, build it and come back. You have a much more participatory process.
Digital transformations work by connecting systems, processes and people to make the flow of information faster and more streamlined so that better decisions are made faster. All parts of the business are impacted, with the more successful transformations bringing together different parts of an organization.
Traditional projects followed a waterfall methodology where engineering would build or buy a product that didn’t always fit the business need.
Today, change happens fast and with a lot of collaboration. “You can’t just talk to someone once and take the design, build it and come back,” said Raman Venkatraman, Vice President and Global Head of the Alliances & Technology Unit at Tata Consultancy Services.
In a digital transformation, you’re joining together business leaders, technical leaders and engineers in an agile fashion.
“You have a much more participatory process. In an agile process, it’s more interactive. It’s split into mini projects called sprints – you create smaller teams and start interacting with customers on a weekly basis.”
Before moving to digital, it’s important that business leaders remember the metrics and what they’re looking to achieve, whether that’s trying to reach a new demographic or product or transferring customers into a new product, for example.
“You have to understand these because technologists need to know what you’re trying to build and where you’re going together,” said David. “In a digital transformation, you’re joining together business leaders, technical leaders and engineers in an agile fashion.”
What is Agile?
Agile is about organizations working together to leverage different skills to get technology out the door quickly. Sprints are development sessions where different stakeholders come together to develop a specific product.
Business leaders articulate their ideas so that engineers can create, approve and test the product before the release, and everyone works together to ensure the right results are achieved.
“Sprints are cross functional – you may have finance, compliance, marketing, technology and the business unit staff in a room together during these sprints,” said David.
If a sprint yields results that are worse than previous, the team can take a different direction and modify.
“Otherwise, if a finance or compliance person steps out, code is written, screens are created, and you may have to do another sprint for what was missed. The product’s designed right in front of everyone in the room and at the end, it’s released.”
Each sprint can last from two to 10 days, and launches can take from six to nine months and have five to six sprints, with each sprint building on the last until real results are in the marketplace.
Whatever the project, technical teams and business analysts form the plan together while being mindful of the metrics behind that goal, like improving customer satisfaction or capturing more market share, and change is implemented through an iterative process.
If a sprint yields results that are worse than previous, the team can take a different direction and modify until they see the desired results.
Since the system is built over a series of smaller changes and the large task is broken into smaller tasks, the transformation can progress forward without having to wait for the broader project to finish.
There isn’t a single release as well, but instead, multiple smaller releases that increase production over time.
Start With a Win
No matter how broad the roadmap for the digital transformation, driving quick wins and marketing these internally is key to success down the road and inspiring ideas. “If you have real friction in a process, at least start to tackle some of that,” said David.
“You want to start to show results to people who might be sceptical of the transformation. Find ways to show early results or progress in a project and put these in the earlier sprints so you have time to refine them as you put the process out there.”
Pick something you know you can win on, build your experience, and then move onto a business problem that’s larger.
By starting with something that can easily be improved upon, the team is able to build its acumen and muscle memory so that something larger can be tackled in a later sprint.
The team can iterate on that product based on investor feedback and market results to achieve the desired result and address any negative responses from customers.
“Many people try to do these massive digital transformations rather than say, ‘We have a number one product – how do we continue to improve on that?’,” said David. “Pick something you know you can win on, build your experience, and then move onto a business problem that’s larger and more challenging.”
No Detail is Too Small
“These sprints make you analyse your business process, information flows and customer experience, and business leaders need to understand how their customers interact with their products in a digital way,” said David.
During each iteration, business leaders articulate ideas to the tech leader so that they can adjust the product accordingly.
Everyone can see changes and results in real time, and one product can be tested against the other in an A/B test comparing two different versions to determine if that sprint works in the marketplace.
Changes can be as minor as a font colour, location in type face or wording, and iterating these will lead to optimization.
Dissecting the details will also pinpoint any friction in a process or where the problems are with a product. “You may question why you ask for certain information if it’s unneeded – this may inhibit your transaction flow or sales growth, and there might be someone in your company who wants that market data, but it’s killing your process,” said David.
Finance is Integral to Change
From a finance person’s perspective, the sprint is about the right budget, how budgets are dispersed and the measurement of metrics, said Raman.
Since digital transformations can change an entire process, that will also change how budgets are allocated in real time and the business results.
During the sprint, financial teams may opine on how these changes affect the core financials. However, they can analyse financial models built around a product or market, as well as ‘if’ and ‘how’ that sprint can change the business.
New Products Versus New Designs
Not everything needs to be built internally: sometimes a new tool is the best solution, but it has to be the right set of products.
“There’s physical hardware, and then the business applications run on top of those for finance, human resources, sales, etc.,” said Raman. “All these systems are connected together through standard integration software or from a data perspective.”
If you look to what the product is designed to do and take the processes as is, you can reduce the burden on your company.
Many enterprise software manufacturers have enabled significant digital transformation. “Look to best in class digital capabilities and leverage those suppliers and cloud solutions to enable your transformation,” said David.
“Many products give you some best in class process capabilities, and if you look to what the product is designed to do and take the processes as is, you can reduce the burden on your company.”
Be Thoughtful and Steady
“Companies have already invested significantly in technology, and you want to leverage those investments and make incremental changes,” said Raman.
“Some organizations can change at different speeds, but you take participants on board and make those changes going forward.”
When companies need significant, immediate change and rip and replace technology, those transformations tend to be difficult and unsuccessful.
It’s not just about external stakeholders being happy, but also about keeping internal stakeholders happy.
“When we make changes incrementally and talk about changing results as a series of steps, we have found the transformation to be very beneficial and to have a significant impact in changing the results of an organization,” said Raman.
By being collaborative, it’s not just about external stakeholders being happy, but also about keeping internal stakeholders happy.
“You have to improve how employees are working and you have to make their life better in the role they’re doing,” said Raman. “You want to make sure the work they’re doing is happening faster and they have the tools that are required as well as trained to use the tools to achieve the outcome.”
About the author
Andrea Murad is a New York–based writer. Having worked on both Wall Street and Main Street, she now pursues her passion for words. She covers business and finance, and her work can be found on BBC Capital, Consumers Digest, Entrepreneur.com, FOXBusiness.com, Global Finance and InstitutionalInvestor.com.