Why Technology is standing in the Way of Digital Transformation
There’s a common misperception that digital transformation means adopting new technology and jumping on buzzword bandwagons like AI, blockchain, and machine learning.
The CIO, EMEA, at American Tower Corporation and lecturer at the Gordon Institute of Business Science (GIBBS), Tony Christodoulou, speaking in the latest episode of the Sage Futurealist podcast said “Digital transformation does not mean a change in technology, or something you apply to the front-end of your existing products and services. It’s about business transformation – changing the way you do business to serve your future customer. Most importantly, it must be linked to a specific business objective.”
There are three key elements in a digital strategy, he says:
- a business priority
- data as an asset
- a visionary and strategic CIO
Define the priority
Digital transformation means starting with a business imperative and thinking about how technology can enable it, says Christodoulou.
“Don’t overcomplicate things; simplicity is the art of effectiveness – always go back to why you’re doing this and don’t worry about how you’re going to do it or about understanding the technology. If you don’t know why, look at your value chain and identify your business drivers. Then ask how technology can make you more efficient. If you change how you do things, will you be better, quicker, or cheaper?”
This is not to say that businesses should not dabble in new technology. But Christodoulou says this type of “value play” must be calculated and link back to the business priority. “Nothing is ever a failure – it’s a first attempt at learning. It’s only a failure if you bring technology into the business for no good reason and becomes aimless execution.”
He says tools like chatbots are exciting, but there must be a reason for implementing them; what’s the value? “If it’s to reduce admin tasks so your customer service team can focus on other value add activities to reduce costs and increase revenue – that’s valuable. Chatbots are not valuable simply because they’re cool.”
Data as an asset
The same business imperative question applies to data: what are you trying to see or answer? People think their data problem will be solved once the data is scrubbed and they have reporting capabilities and visualisation tools in place, but again, this starts with the technology rather than a business imperative, says Christodoulou. “Anyone can find insights in their data, but those insights mean little if they don’t link back to a business imperative.”
For him, there is no greater business imperative than treating data as an asset, and this usually requires a change in processes. “Get people on your team with a business process mindset who also treat data as a business asset,” he says. “Good data starts at the business competency, business processes, and user ability to follow the process.”
The person identifying business imperatives and using technology to enable them is the CIO, as the right hand of the CEO. The role of the CIO has fundamentally changed, from a support function and cost centre, to a strategic partner and profit enabler, says Christodoulou. “The transformational CIO has to be a line-crosser. He or she needs to be on the ground, understanding customers’ and employees’ operational pain points and being proactive about architecting solutions – not just waiting for business to verbalise their requirement.”
He adds that any CIO waiting for a requirement doesn’t understand the business problem and is losing the opportunity to be strategic. “By understanding where the business is going, the CIO should be defining the requirements that will enable the CEO’s vision. They need to be thinking about technology from the onset, before there’s a requirement.”
Time for change
Any business embarking on a digital transformation journey should keep two things in mind:
- What does the future customer and employee look like; and
- How will they interact with your current products and solutions?
“There’s no silver bullet to digital transformation,” says Vice President, Enterprise, Sage Africa & Middle East, Matthew Kibby. “It’s not about replacing existing technology – that’s the easy part. It’s about the transformation of processes and understanding users’ current competency level, and their ability to use and adopt new technology. It’s about managing change and ensuring everyone understands what it means going forward. It takes a village.”
Ultimately, he says, it’s about using technology to enable a business process, not the other way around. Be clear on the objective and focus on the value you’re trying to achieve.