In his 1999 book The Age of Spiritual Machines, Ray Kurzweil proposed his Law of Accelerating Returns. Kurzweil predicts that technology will advance exponentially, that machine intelligence will overtake human intelligence, and that 100 years of progress, in the 21st century, will feel more like 20,000 years of change.
While “spiritual machines”, for now at least, remain safely in the sphere of philosophy, rapid technological change is a reality that most businesses face. The phrase digital transformation is used, but its definitions vary; how much change is necessary, and when – if ever – is the transformation complete?
Digital agency Strata3 specialises in digital transformation, consulting and tailored products, catering to clients including An Post, Bank of Ireland, Fáilte Ireland and Irish Rail.
Chief executive John Mitchell explained that digital transformation is an ongoing process. “Even for ‘digitally mature’ businesses, the process is not cut and dried, nor is it ever really finished, because digital and associated technologies are never static,” he said.
The methods and requirements for transformation are themselves transforming constantly, to the point where specially commissioned research might actually be out of date by the time its recommendations are put into practice.
“Large organisations and brands that commission strategic consulting projects, based on heavy analysis and long-tail roadmaps, often fail to deliver clear pathways to implementation,” said Mitchell. “This is especially painful for industries facing active disruption – they need to move faster.”
Catherine Doyle, director of strategic outsourcers, EMEA alliances, at Dell Technologies, stressed that digital transformation must go hand in hand with organisational change.
“It has to be cultural as well as digital,” she said. “With a lot of companies there are embedded older systems, and they might just put a portal on top of it, but really, underneath, it’s the same old system. Companies do that because it’s expensive to change an entire system.”
While younger companies have the advantage of coming into being at a time when technology is more sophisticated, there are still options for every business.
“It depends heavily on where the company is, its current state, and where it wants to be in the future, as well as the commercial budgets which underpin that,” Doyle said.
Digital transformation helps companies retain a competitive edge, reduce operational costs and attract the best and brightest new talent, but it also plays a crucial role in giving your customers the best experience possible.
It’s tempting to throw money at the problem, investing in the newest, flashiest technology, but true change has to run through the organisation at every level, encompassing practices as well as products used.
“It’s a common mistake to view investment in a new technology platform as a panacea. Often the real challenge is the operational, workflow, HR and business transformation change to allow the benefits of the technology to truly manifest,” said Mitchell.
“We too often see a technology-first approach that fails to satisfy the needs of real-world end users. The rule should always be ‘people before technology’.”
Digital transformation cannot be top-down, nor can it be shallow.
“For any organisation digitally transforming, irrespective of size, it’s helpful to articulate a corporate vision and values,” Mitchell said. “For instance, if a company ethos is truly client-centric, then delivering a best-in-class digital customer experience and products is a lot easier.”
Another mistake people make is relegating experimental or risky ideas to obscure departments within the business, so that the organisation as a whole never has the chance to benefit.
“Too many times, in our work, we hear people say ‘we have a digital centre of excellence’ or ‘we have a head of digital innovation’, but they don’t actually change,” said Mitchell.
“For real digital transformation, it needs be taken seriously across every aspect of a corporate culture. Keeping digital change in a box or within an innovation hub usually results in a poor return on investment for organisations and brands.”
One of the first steps to digital transformation will also help your security strategy: you need to get your data in order. Clear out unnecessary, outdated and useless data, assemble a map of what you have, and then put it to work. Artificial intelligence (AI), as one important example, can bring rapid, dramatic change to your business, but you have to feed it relevant data to get the most from it.
“Often companies aren’t sure what’s important and what’s not important, so they keep it all,” said Doyle. “AI can do so many things, from standard bots used to clean up the back end, to handling customer-facing queries. But for AI to start really helping people, tagging data and classifying data is necessary.”
Mitchell added: “Businesses are awash with data, the vast majority of which is indigestible, which cannot help leaders make decisions. A lot of data is disconnected, non-standard and fragmented.”
Storing your data in one place is helpful, as is measuring and testing digital products in a live environment, developing a digital roadmap and investing in data analytics tools and experts to get the most from them.
All this might sound intimidating, especially if you know you’ve already fallen behind, but it’s never too late. “One exciting aspect of digital transformation is that organisations that are late to the party can still avail of ‘last mover advantage’; they can adopt new technologies to leapfrog the competition,” Mitchell said.
Where your capabilities and your budget allow it, this might even be an opportunity to take risks. “Our advice to organisations is to create a corporate culture that allows for experimentation with new technologies today, rather than waiting for the next wave,” said Mitchell.
Doyle advised businesses to start with a clear idea of where they want to end up: “I think one of the big mistakes a lot of customers make is in trying to make what they have more digital. The best practice, coming from consultancy firms, is to start with your endgame in mind and work backwards.”
Don’t aim for dramatic change: stay mindful of your budget, your deadline and, crucially, your customer’s needs. Change comes to those who plan for it. “With a proper time frame, a plan and an organisational structure to actually implement change, you can make a success of it,” Doyle said.