DigitalTransformationTalk: Developing a transformation strategy that optimises your digital investments

On 25 April, Digital Transformation Talk host Kevin Craine was joined by Fiona Delaney, Chair, Blockchain Ireland - Startups Group; Nitish Mittal, Partner, Technology, Everest Group; Dr. Tim Bottke, Partner - Telecoms, Media & Entertainment Leader, Deloitte, Chris Wynder, Director of Marketing, Developer Cloud and OEM, OpenText.

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A high percentage of companies that pursue digital-based platform models falls into a costly trap: they manage their digital platforms like a shared service. Traditional technology operating model discussions tend to revolve around the centralization versus decentralization axis. In a decentralized model, teams supporting local business units often deliver faster outcomes, but at the expense of higher overall costs and sometimes fragmented technology stacks and long-term technical debt. In a centralized, shared services model, shared teams are optimized to drive efficiency and standardization. Invariably, local agility suffers.

The ideal digital platform, however, is built on a hybrid product-based delivery model that is both centralized and decentralized. Although strategy is key, in today’s dynamically changing business environment, you can’t really see the end or all the potential outcomes at the planning stage. It’s probably better to take an ecosystem approach to understanding a business’s market and its network. 

What businesses need is a strategy in an open innovation context that is robust and flexible. Instead of recreating the same old problems with new technology, they should always keep in mind how a new platform can make the organisation a better company. Measuring has to be consistent across the whole business, not just within departments and teams. It’s also key that measurements are reviewed from time to time to align with changing circumstances. Saving money on change management and communication about why the change is necessary in the first place is often a key reason why transformation projects fail. 

Ensuring you measure the right data points

The question is how businesses should measure the success of their digital efforts to be able to demonstrate a return and optimise investments. It’s important that data points which are being measured should be linked to the strategic goals of the business. In an ecosystem with the right infrastructure, it’s not so important that all partners or suppliers are early adopters of digital technology. User-centric design is also a key element of a successful digital transformation journey. Communication between tech and business people about the transformation often gets vague as even the same words they use may mean different things in their respective fields of expertise.

The problem is that these teams are typically not aware of these discrepancies. In the case of a deployment, there are four-five system integrators and 5-7 platform vendors with “the greatest technology on earth”, as well as integration layers,  middleware layers, and organisations with different understandings of what agile and squad mean. Establishing a common language between teams Is the most important value driver of these projects.

Although you need to have a vision from the start, planning should be an iterative process. With multi-party projects, it’s very helpful to have a framework from the start where each stakeholder has a role. There are three different spheres of ICT within a business: the frontier for innovation, an in-between sphere, which is closer to the core but still has opportunities for innovation, and the core itself. No corporate can manage all these three spheres by themselves and therefore need to build ecosystems.

The panel’s advice

While the IT core of a business needs to be rock solid, certain other areas can be opened up for innovation to see how new digital technology can make it more efficient. 

Digital transformation frameworks get out-of-date rather quickly, especially in sectors such as banking. 
Although it’s easier to start a brand new data capturing and analytics system, you definitely need to deal with your legacy data too. 

Take a lego-based, modular approach and use what is already available on the market. Don’t reinvent the wheel.

Establish where you want to play and how you’re going to win and think of the rest only after that. 
Find the framework that fits your purposes.