Three Major Digital Transformation Challenges
From my conversations with enterprises all over the world, the questions and concerns business leaders have about digital transformation share a lot in common.
Everyone I meet wants to see how they can get results. They want to understand what digital transformation looks like and how it can enable them to capture borderless growth and boost productivity in the short and long-term future.
Digital transformation is about execution; whether automating processes, moving applications to the Cloud or communicating with customers in new ways. It is easy to plan a digital strategy and believe in the cloud but there are a few critical things that enterprises must address to get it right.
1. Think global, act local
The first challenge is developing and deploying a centralized transformation strategy that can be localized. One size doesn’t fit all and this can lead to new complexity for enterprises looking for a global transformation. From a strategic level, there needs to be a centralized approach, which has the flexibility for local offices to implement digital transformation as per local needs. This could include maintaining control of the P&L, either through effective process control of local billing entities or centralized cost centers, noting the need to observe local tax and intra-company transfer pricing rules. After all, regulatory environments and user demands can differ quite a bit from market to market.
Service Level Agreements (SLAs) and security should support a globally consistent experience for end users while local flexibility enables regional operations to be agile in how they manage the transformation. At the same time, this approach removes the limits on growth and enables enterprises to seamlessly expand their geographic reach.
2. Choosing a transformation partner
The second point is that transformation doesn’t just mean deploying cloud solutions. Enterprises need to migrate from a multi-vendor environment to a single global partner capable of managing local vendors in a consistent and efficient manner. Multiple vendors can limit agility, flexibility and productivity, erasing the benefits of transformation.
Enterprises should focus on transitioning, ending contracts and vendor program management. It might not be as exciting as deploying new cloud solutions, but it creates a foundation for the future. There’s an opportunity to reduce the complexity that comes with managing multiple carriers, contracts, invoices and service management procedures.
Enterprises need a single service provider to deliver integrated cloud strategies both around the world and on a site-by-site basis. The relationship should be a continual evolution, in which both organizations commit to the same journey.
In year one, the enterprise and service provider work to understand the state of play within the ICT organization, collaborate on solutions and begin executing. By the time year three rolls around, they should be evolving their partnership to match changing demand and new opportunities.
3. Measuring transformation
The final challenge is measuring results. Enterprises must track cost savings and optimization across the business but also on a return on investment (ROI). They need to look at the big picture and how transformation has influenced individual departments and functions within the organization to achieve business goals on expansion, cost containment and corporate compliance.
Digital transformation isn’t just about saving money on IT. The deployment of a customer relationship management (CRM) system globally, for example, impacts the whole business. The benefits of new efficiency and productivity will cut across the organization and go beyond the ICT function.
When an enterprise assigns key performance indicators (KPI) to its transformation journey, it can see when it is a success. When an enterprise hits its KPIs, transformation is no longer a buzzword but the new reality for the organization. That’s the exciting part for both the enterprise and their service provider partner.
The critical path:
A successful digital transformation hinges on having a global strategy which shows an acute awareness of local implementation needs. Furthermore, you need a single transformation partner that will commit to measurable objectives which you achieve over an agreed period.
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