We develop strategies with some objectives in mind:
Digital transformation is about optimizing the performance of the company. Often the organization begins to sense panic, that they have fallen behind in their business execution constructs and now need a specific intervention so that the organization can catch-up with current digital developments and hopefully jump the learning curve on a few ideas that would give them a competitive advantage.
It’s true that in the wonderful world of technology advances, many companies have found new fortunes by changing their business model – i.e., enhanced the sources of revenue. This unexpected gift from digital is neatly translated into what Cisco and others refer to as having your data on your balance sheet. So, your digital transformation will not only achieve a closer collaborative relationship with your market and enable you to execute work in an optimum frictionless environment, it can also add enterprise value to your organization through the monetization of the very data used to run the company.
Looping back to our objectives for strategy – Strategy is about value creation. In its barest form, it refers to the business model’s value proposition by answering why the market would give us money. Digital plays three district roles. It enhances the transactional experience both through better information and through much improved user experiences with the company. Secondly, digital lowers the cost of the transaction by automating many steps and simplifying the process. Thirdly, digital offers the opportunity to add adjacencies to the product in the form of data. For example, an equipment vendor providing performance data from all its units to its customers to leverage and optimize algorithms.
We note that strategy is also about winning – Having a competitive advantage that prevents your customers from going to the opposition. Digital supports this strategy by allowing you to gain this advantage through extending your apps into the user base to make their selection processes or their maintenance management easier, becoming the industry standard on assessing or evaluating assets, using digital to establish the best customer relations or simply, being the lowest cost supplier because of an astute deployment of digital in your operations.
Strategy is about selection and focus, and plays with two hands – Digital transformation cares about selecting the latest technology to lower operating costs, increase quality of delivery and make the sales transaction the least complex. Digital transformation also focuses the organization on developing a culture of continuous improvement. No longer is simple production delivery good enough – every business process has to be improved continuously through digitizing steps and introducing algorithms that can optimize process choices.
Finally, we said that strategy is about speed and agility – Focusing the organization on a narrow set of plays and executing better than your peers. Speed and agility comes with focus, and we double down with digital to enable that. A digitally enabled business model contains the key elements for speed and agility. Think of operations focusing not on the daily delivery of goods, but on improving that process as a core part of the operation’s culture. Now add to this a continuous improvement culture with the tools and methods of a robust Agile project management system and the organization is transformed into something quite different than what we were used to. Taking all options into consideration, a digital transformation offers the penultimate best choice for organizational renewal and increased performance.
Digital transformation plays directly into the four core objectives of a good strategy. It enhances the value proposition, it improves your competitive advantage, it streamlines your resources, and finally, it is the de-facto best tool for business transformation as it structurally changes how work is done. Here we are concentrating on speeding up the business decision cycles with a dynamic continuous improvement process and an agile execution.
At VCI, we experience the best digital transformation outcomes when clients take the time to wrap their arms around the full scope of the opportunity. We see the least success when digital transformation becomes an IT systems integration project – it is not. Digital transformation starts with a proper Assessment to establish a “one truth” and is followed by a Vision, Strategy and Roadmap. We also see an increased appreciation for a proper Program Management Office to ensure the success of a Digital Transformation.
Paul Leonardi is the Duca Family Professor of Technology Management at UC Santa Barbara. He holds appointments in the Technology Management Program (TMP) and the Department of Communication. He is also the Investment Group of Santa Barbara Founding Director of the Master of Technology Management Program.
Dr. Leonardi’s research, teaching, and consulting focus on helping companies to create and share knowledge more effectively. He is interested in how implementing new technologies and harnessing the power of informal social networks can help companies take advantage of their knowledge assets to create innovative products and services.
He has authored dozens of articles that have appeared in top journals across the fields of management, organization studies, communication studies, and information systems research. He is also the author of three books on innovation and organizational change. He has won major awards for his research from the Academy of Management, the American Sociological Association, the Alfred P. Sloan Foundation, the Association for Information Systems, the International Communication Association, the National Communication Association, and the National Science Foundation.
Over the past decade, he has consulted with for-profit and non-profit organizations about how to improve communication between departments, how to use social technologies to improve internal knowledge sharing, how to structure global product development operations, and how to manage the human aspects of new technology implementation.
Before coming to UCSB, Dr. Leonardi worked at Northwestern University on the faculties of the School of Communication, the McCormick School of Engineering, and the Kellogg School of Management. He received his Ph.D. in Management Science and Engineering from the Center for Work, Technology, and Organization at Stanford University.
Willem Buhrmann is an experienced mining professional that has extensive African and international experience in project management, strategy implementation and corporate finance. Willem was previously Business Development Manager (Africa) for Rio Tinto Energy and more recently consulted to the wider mining industry including majors and a variety of juniors. He holds degrees in finance (Chartered Accountant) and the legal world (LL.B.)