As we discussed in the first part of this two-part series about digital transformation, transformation strategies and technologies cannot outpace the readiness of the organization that’s doing the implementing. Doing so will shine a light on potential inefficiencies, not fix them outright.
In this second part, we will focus on what it means to be digitally transformed in 2020 and how AI supports digital transformation agendas. We will also address what challenges or hurdles stand in the way of digital transformation and suggest three strategies for overcoming them.
Leaving Tasks to AI, and Strategy to the Humans
A Forbes article from 2019 makes the claim that artificial intelligence (AI) technologies are the key to unlocking the full potential of digital transformation, but at the same time, that full potential may look a little different than we would have imagined. “Transformation doesn’t result from merely digitizing manual tasks; it comes from automating entire processes and leaving humans to guide strategy rather than execution.”
Focusing on the tasks that AI can digitize and leaving the strategy up to the humans creates a more solid framework for understanding the coming together of digital transformation and AI technology. Gartner released its tech predictions for 2020 and forecasted: “Through 2021, digital transformation initiatives will take large traditional enterprises, on average, twice as long and cost twice as much as anticipated.”
They continue: “Smaller, more agile organizations, by contrast, will have an opportunity to be first to market as larger organizations exhibit lackluster immediate benefits.”
Organizations are still trying to capture the expected $16 trillion in AI gains in the next decade, but in 2020, top companies across organizations will up their investments in AI to give rise to a more intelligent, agile organization.
The answer for these large corporations could be in leaving more tasks and execution to AI, for example using tech to automate critical back-office functions that all organizations must manage such as order processing, invoicing, and accounts payable. This allows more time, energy, and critical people power to focus on top-level strategizing for the future.
Think of how the robots helped Judy Jetson with the dishes — leave the machines to the minutiae of executing day-to-day functions and unlock the full potential of AI, which is creating and protecting time for humans to do what humans do best: innovating and strategizing. This is what digital transformation provides — fulfillment of both AI and human potential.
3 Debts that Impede Transformation
Unfortunately, there are challenges that impede progress and digital transformation, and some of these challenges are inherent in big business, as they have more to lose.
Leaders need to understand transformation and its urgency, otherwise there is a major lack of prioritization and investment. But aligning interests, incentives, and support is not something you can outsource, game, or outright convince people of. There has to be ground-level agreement before meaningful transformation can take place.
CIOs are aware that change and digital transformation is necessary and, as Deloitte found, 43% think legacy and core modernization will have the largest impact on businesses over the next three years.
There are three main main deficiencies, or debts, that can make digital transformation difficult. Those three deficiencies are:
- Process debt: When companies lack the appropriate frameworks needed to operate using modern technology.
- People debt: When companies lack the needed workforce of skilled and able technicians to negotiate the emerging tech landscape and trends.
- Tech debt: When companies lack upgraded technology to keep up with their competitors. Organizations with high technical debt are 1.6 times less productive than companies without. Upgrading is necessary to drive better business results.
In order to address these issues, companies should foster an environment where people are willing to learn and update processes in order to modernize. There are ways to combat each of these types of deficiencies with targeted strategies that prioritize change and mobility.
3 Steps for Success
Here are three practical steps that can be taken to drive transformation success:
Establish a consistent and clear story across the organization and ensure that all executives are prepared to communicate this message across departments. Confirm alignment on objectives and create a clear path to success by creating goals for each department that focus on transformation.
Offer leadership development opportunities that focus on knowledge for digital transformation and coaching programs to help manage employees in their new mode of working.
Define customer needs
Currently, only 28% of organizations are starting their digital transformation initiatives with clients as a priority. By placing emphasis on customers’ needs and looking for solutions that directly impact their experiences, the enterprise will have a unique advantage over other companies that are working on digital transformation.
Break down silos and goals
Emphasize agility in the work environment. Change is hard — discuss and decide upon key priorities with the organization and with stakeholders. From there, break those into smaller goals.
By implementing these three strategies, companies can find ways to mitigate potential barriers to transformation entry. Even smaller companies can utilize these steps to stay on trend and change with the times, rather than against them. Digital transformation can be transformative for not just the tech and processes you use, but your ROI and profits.