A new digital
transformation language

Organizations continue to struggle with digital transformation. A technology-independent common language could be the key to strategic transformation

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Dani Wong

Partner, Singapore

At a Glance

Organizations continue to struggle with digital transformation. A technology-independent common language could be the key to strategic transformation. 

Adaptation is required to win the future, from disruptors and disruptive technology to pandemics, political upheaval, and climate change. To survive and thrive, leaders must determine how to sustain a competitive edge and enable the ability to win in a way that not only tolerates but also embraces change in order to produce new strategic alternatives. 

In the twenty-first century, an adaptive firm is often a digitally powered business, prompting many organizations to undertake digital transformation. But why do so many makeovers fail to provide tangible results? Why is it so difficult to promote cross-functional change, plan beyond one technology at a time, or develop a strategy that can adapt as technology develops and businesses’ underlying assumptions shift? Developing a uniform, strategically linked language for digital transformation could be the answer to gaining digital advantage and adaptability. 

Defining the Digital Transformation Debate

When the pandemic hit, 85% of CEOs increased their digital initiatives. Most of them can’t talk about their whole strategy and progress beyond the fact that they invested in technology. Creating a business that can thrive in the digital world is becoming more and more important for businesses to do. If CEOs cannot demonstrate that their digital transformation has resulted in new business benefits or agility, they have not truly transformed. This distinction between business and technology strategy highlights a larger phenomenon: many leaders recognize that technology should not drive business strategy. However, all too frequently, that understanding is overshadowed by the desire to ask, “What should our AI strategy be?” or to react to events by making a series of tech-first, one-time expenditures. The desire to conceptualize in terms of distinct technology can be strong. 

This difficulty is exacerbated by the fact that C-suite executives have diverse focal areas and objectives. And, more than likely, a single technology will not suffice to meet their requirements; rather, a complicated combination of solutions may be required. They also often don’t talk to each other when they’re making technology decisions, or if they do, they have a hard time communicating well. If you want to make sure that projects are coordinated across different leadership roles while still being consistent, you should use a playbook.

While many organizations have a digital strategy, they lack a common vocabulary to strategize across functions, making it difficult to digitally transform and handle relevant opportunities and dangers. Indeed, a common language for digital transformation may enable C-suite executives to hold tech-adjacent and tech-agnostic conversations that transcend any one technology and go to the heart of their processes and culture, as well as how people work and connect. 

Organizations can begin to break down human behavioural and structural barriers by adopting a common language. Everything in a company is interconnected. By simply communicating more effectively, leaders across functions may speak thematically about shared needs, prevent duplicating investments, address emerging risks, and modify procedures at scale. 

Plan for more than one technology. Platforms, capabilities, and initiatives frequently include the secure collaboration of several digital and physical technologies. When these technologies join together, they become more than the sum of their parts, bringing new capabilities and value. 

Ascend into the future. Today’s breakthrough technology will be obsolete tomorrow. A common language enables leaders to think flexibly across a matrix of business and technology needs without relying on a single technology. 

Increase your strategic business worth by demonstrating your ability to change and win. This technique assists organizations in better aligning and executing on their business plan in order to achieve the intended outcomes of advantage and adaptability for the company, individuals, and technology. 

According to research on the exponential enterprise, a company with above-median scores on both the ability to win and the capacity for change indices has measurable gains. Based on data from 2015–2020, these companies had a price-to-earnings ratio that was 53% higher and share price volatility that was 21% lower than industry competitors with below-median scores on both dimensions. 

To guarantee that all parties can understand and contribute to the conversation, the language of digital transformation should have one foot on the business side and one foot grounded in downstream technology and operations, while avoiding technical terms. Leaders from various industries appreciate the importance of connecting the two sectors in a friendly, universal manner. “If you want to become closer to and become more crucial to the business and its goals, you need to speak the same language as the business,” says Tighe Wall, chief digital officer of Contact Energy. In the future, every organization will become more technologically and digitally focused. People who have already bridged that divide and are speaking the same language in business as they are in technology will be successful. ” 

Five Digital Transformation Imperatives

We’ve identified five business outcomes that technology influences and enables that can aid in the development of that common language. Thinking thematically across these five digital imperatives—experience, insights, platforms, connectivity, and integrity—allows organizations to communicate across functions in a way that prioritizes strategy over technology, leading to initiatives that deliver a more modular, flexible technology core that better delivers transformation and strategic value. These business-techno principles can serve as guardrails to help executives avoid slipping into the trap of a technology-led conversation. They can also assist in the development of digital strategies that are tied to technical realities and workforce considerations. In essence, they serve as a link between business and technology strategists and workforce and operational leaders. 

Getting into further specifics: 

  1. Experiences: Optimize interactions with users, whether they are customers, employees, or other stakeholders in the ecosystem. 
  2. Insights: Determine what data, analysis, operational models, and workforce are needed to support corporate strategies. 
  3. Platforms: Focus on the location and administration of information across a company’s or network’s network.3.0
  4. Connectivity involves the flow of information between platforms, experiences, and insights, as well as networking with other organizations and ecosystems. 
  5. Integrity: A cyber-minded culture focuses on enhancing resilience, security, ethical technology, and trust across all internal and externally exposed corporate systems and processes to handle constantly emerging threats. 

For each requirement, there will be more than one technology to examine. It can be helpful to think of the imperatives as categories or “capacity stacks.” Themes enable categories to become fixed as technology evolves. As a result, leaders can consider today’s enabling and disruptive technologies (such as cloud, IoT, blockchain, AI, cybersecurity, mobile, 5G, digital reality, edge computing, quantum, and others) while maintaining the same strategy in place for future disruptive and horizon-next technologies to meet the same strategic objectives. 

Putting the Imperatives into Action: Drive Transformation by Aligning Strategy

Organizations can utilize these imperatives as a lexicon to develop a digital strategy that is aligned with the organization’s strategic north star. 

Begin by evaluating how that broad goal ripples through company, technology, and workforce considerations: 

What is the enterprise goal for digital transformation? Willingness to change? Possibility of victory? both? 

Ask the following questions about each of the five digital imperatives: 

What is the strategic business aim that best supports our company’s goals (s)? 

In terms of purpose, function, security, and risk, how does technology need to support this business goal? 

What are the implications for operations and the workforce of such business, technological, or security decisions? In turn, how may workforce strategies and capabilities influence the transformation strategy in a way that takes into account profound shifts across leadership teams, operating models, ecosystems, and the workforce aligned with strategy? 

We may then develop a technology strategy that includes planned technology investments that are aligned with organizational and workforce transformation objectives and ladder up to the overarching organizational aim. 

Let us provide an example to demonstrate what we mean. Developing a strategy for smart factories First, evaluate the company’s goal for the smart factory, such as creating small batches or personalizing things at a lower cost than conventional mass manufacturing processes. Second, develop the digital business strategy by analyzing how each of the five imperatives aligns with these manufacturing goals in terms of insights necessary, platforms and connectivity required, and, lastly, how to do so with integrity. Then, as you work your way down the list of digital imperatives, assess your technology requirements in relation to the digital business strategy. Instead of starting with the cloud as an expected investment, talk about a variety of technologies (that may or may not include the cloud) and their consequences for the workforce and operations. Better strategic alignment across the digital business plan, technology investment strategy, and organizational or workforce transformation agenda could follow. 

Change, Compete, and Win: Creating Value through the Five Imperatives

While our proposed framework is novel, the reality of implementing an integrated, cross-functional approach to digital transformation is not. However, creating such an integrated approach is critical. We discovered that the technologies listed in our survey that align with these imperatives were rated as the top five most important to enable digital transformation when we analyzed data from 2,860 global business and public-sector leaders who responded to the Digital Transformation Executive Survey. Furthermore, we discovered that the more digital imperatives these organizations implemented, the higher their digital maturity and profitability. Furthermore, more digitally linked organizations outperformed in terms of strategic objectives, adaptability, and ability to succeed.

To accurately assess the value that organizations can gain from increased adoption of digital imperatives, we divided respondents into two groups: seven “digital all-rounders,” who had implemented three or more digital imperatives (13 percent of respondents), and “digitally developing,” who had implemented fewer than three digital imperatives (87 percent of respondents). While 67 percent had adopted at least one digital imperative, organizations realized greater value when they coupled them into an integrated digital strategy. 

Digital all-rounders are at the helm of digitally developing organizations in the following areas: 

Capacity to change: Digital all-rounders were better able to scale, achieving full-scale implementations more frequently (77 percent vs. 64 percent), and their digital capabilities aided them greatly in dealing with COVID-19 problems (35 percent vs. 24 percent).

Ability to win: All-rounders also reported higher-than-average revenue growth rates (74 percent vs. 65 percent) and citing digital capabilities as a critical differentiator (36% vs. 25%).

Many organizations, whether they recognize it or not, are already pursuing this integrated strategy. We interviewed four global leaders in charge of digital transformation in their organizations, each in a different business and technical function, industry, and geography, and discovered that they were already approaching transformation in this manner—but without a clear language and frame to guide them. During these discussions, we found out that this framework can help organizations with three different digital transformation goals: optimize one digital imperative across all three of these areas; combine multiple imperatives to build a more complete strategy; or use a combined approach that combines multiple imperatives across these strategies.

Prudential, for example, prioritized the insights imperative across business, technology, personnel, and operational strategies. They engaged underwriters in the construction of its algorithm to automate underwriting in order to get better adoption and value from the transformation. “The way they work is changing,” said Robert Huntsman, chief data scientist for Prudential Financials’ life insurance and retirement business. “Knowing that, underwriters have been involved from day one in helping to write the requirements, crafting how the model works, as well as changing their own processes for how they would interact with the model.” Now, you can get an expedited judgment on 60% of applications, lowering the amount of time an underwriter needs to spend examining an application. That represents a significant cost savings for the organization, allowing us to be more price competitive and offer our consumers the services they require more quickly. ” 

Alternatively, the framework can assist organizations in developing a more integrated business strategy that incorporates platforms, insights, experience, connection, and integrity. A platform approach to improving end-to-end data integration across customer insights and experiences while keeping data integrity in mind. “We’re concentrating on linking our company from end to end to deliver an improved and more transparent experience for our consumers, customers, and ingredient suppliers,” he stated. This necessitates connecting all data from the start of R & D, all the way through the supply chain, to our retail customers, and all the way to the consumer. 

British American Tobacco and Contact Energy examined a number of digital imperatives that were aligned across business, technology, and operations/workforce initiatives. Elaine Chum, area head of digital transformation, British American Tobacco, North Asia, described how she is leading her company’s online retail platform strategy in Japan to create a direct-to-customer buying experience while adhering to regulatory integrity requirements in order to drive increased sales revenue. In today’s society, she says, “I should be able to deliver within 24 hours.” We began by looking at consumer experience and constraints, and with those three imperatives in mind, we said, “Put the consumer experience at the front, middle, and back of your company’s agenda.” Consider the strategy element, internal business processes and how they can enable transformation, the technology and platforms that we own and operate in, the capabilities that we have, talent, people, resources, [and] the organizational structure, “highlighting the unique challenges of operating in a region that values stability over change and finding Japanese-speaking digital talent. 

Furthermore, Wall of New Zealand’s Contact Energy is expanding the digital platform his company developed to maximize customer experience to reduce friction for its customer care employees, thus improving workforce operations. A thorough, matrixed strategy can enable this type of flexible, synergistic decision-making while keeping the larger company’s aim in mind. 

A language for Today's and Tomorrow's Transformations

Our digital imperatives can help businesses make changes that are in line with their long-term goals while being able to adapt to changes in their strategy in the future. They recognize the importance of AI, cloud, and cybersecurity today, but they leave room for evolution toward “horizon next” technologies, avoiding the trap of chasing every flashy new technology. Finally, they assist in the development of adaptable business processes and technology architectures that accept dynamic change and reconfiguration in the face of ongoing disruption and risk, with the goal of compatibility for numerous conceivable futures. 


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