DigitalTransformationTalk: From cost to value creation - changing your transformation narrative

On 19 March 2024, Digital Transformation host Kevin Crane was joined by Dr Tim Bottke, Chief Innovation Officer, Deloitte; Diana Kearns-Manolatos, Technology Transformation Research Leader, Deloitte; Steve Rennie, Director, Data-Driven Technologies Division, Government of Canada.

Views on news

Technology organizations aren’t inherently viewed as innovation leaders. Unfortunately, IT is often viewed as a cost centre only. But with a mandate to “figure out” generative AI, technology leaders are now closer to innovation. However, to lead digital and AI-first transformation, CIOs must think like CMOs. Members of the C-suite are often expected to take on the roles of their fellow C-suite managers. To avoid that, the best way for all of them is to have an understanding of all the capabilities of the company and act as a team, as well as “asking different and better questions.” Communication between C-suite leaders tends to be a missing link. 

How to address the pain points of DT

Enterprises see now DT as the most important investment to drive enterprise value. What they’re struggling with is establishing the right metrics to measure its value. Difficulties include identifying whose responsibility it is to track metrics and an overall inconsistency with value measures. The right order of things to consider before embarking on a DT project is benefits, while the costs and risks associated with them come only after that. You shouldn’t ever presuppose that AI will be the best tool to solve a certain use case. 

According to Deloitte, there are 5 value categories to consider – financial, customer, those gained from processes, from your workforce and purpose related KPIs. In some areas, you’re going to optimise existing values, in others you’re generating new ones. Metrics will help you build a better business case at the outset, measure the performance of your digital initiative; meanwhile, demonstrating delivery of DT goals will help you get refunding for further stages of the project. Don’t use shallow buzzwords to describe your strategy. A litmus test for your strategy – if the opposite of it is nonsense, so is the strategy itself. E.g., “our strategy is customer centric or lean and efficient”, where the opposite is “we hate our customers and we’re slow and inefficient”. Unless you have a good strategy, you won’t be able to communicate it well and won’t get the necessary buy-in. 
Employees usually have mixed feelings about AI. Involving them and other stakeholders in the project from the start helps build buy-in and address concerns that they have. As part of this, they should be informed about the benefits they or their teams will enjoy. There should be a focus on functional experts too, particularly when streamlining processes, as they have a much more granular knowledge about them than IT experts can acquire. 

In fact, the bulk of the implementation weightlifting is done at the level of departments or functions. According to a Deloitte study, the deficiencies in cross-departmental communication are the number 3 reason for the failure of DT projects (1 legacy system dependency 2 security concerns). To address this, organisations should look at how they set up their agile pods to enhance innovation and the sharing of info (see internal platforms and data strategies), which also involves transparency about who is doing what in order to share and adopt good practices. Consistency of digital solutions across departments such as chatbots are also key both from a customer experience and a cost efficiency perspective. 

The panel’s advice

• You shouldn’t use different metrics for your AI and cloud investments. They should be uniform for all deployments.
• Strive to be tech-agnostic and ask yourself if it’s really AI that can do the job best. 

www.deloitte.com/global/en/issues/digital/maximizing-value-using-digital-transformation-kpis.html