Why digital transformation is more about people than technology

A digital transformation expert provides a road map for organisations, emphasising that the process should not be tied to grand plans or large capital allocations.
IMAGE BY HILCH/ADOBE STOCK

IMAGE BY HILCH/ADOBE STOCK

British parliamentarian and political economist Edmund Burke wrote in 1790 in his Reflections on the Revolution in France: “People will not look forward to posterity, who never look backward to their ancestors.” More than 230 years later, those words ring true today for companies working to revolutionise their business model for the digital era.

“There’s data on this point — multiple studies showing that 70% of digital transformation efforts fail — which is really a sobering, scary statistic,” Columbia Business School faculty member, corporate consultant, and author David Rogers told FM. “So many companies are failing at this. What can we learn from those outliers who are succeeding?” he asked.

In his new book, The Digital Transformation Roadmap, US-based Rogers leans on lessons learned as a consultant to help guide companies through the daunting prospect.

History has taught him two surprising things: Digital transformations don’t actually have to be daunting. And, despite what the name suggests, digital transformations are more about people than technology.

“You need to get alignment across the different parts of the organisation, and that starts with having a common shared vision of where you’re actually heading and why. What is it that is forcing you … or what’s the opportunity for you as a particular business … to change in this digital era?” Rogers said.

He added: “Then, once people start to get on board and understand why we’re doing this and where we’re aiming for … as a leader, it’s critical that you look at the systems you have in place and make sure they are actually going to empower people to push you forward. Because you can’t do this all top-down; it can’t just be a lot of orders from the top.

“You actually need everybody at every level pushing the change forward. That means you have got to remove the blockers, the red tape, and the bureaucracy of old systems that are getting in the way.”

A shared vision is the first of five steps that Rogers lays out in his road map.

Technology isn’t mentioned in detail until within the fifth step:

  • Vision: Define a shared vision.
  • Priorities: Pick the problems that matter most.
  • Experimentation: Validate new ventures.
  • Governance: Manage growth at scale.
  • Capabilities: Grow tech, talent, and culture.

Ways to get started and progress

The five steps describe an iterative journey that Rogers recommends taking briskly. “Take your first pass-through in 90 days. This is always my advice,” he said. “Try to take a stab at all five of these steps within the first 90 days of your transformation.”

Rogers added that during that first cycle you start to define the vision and direction of a project, which leads to the next steps and can be further refined in the next pass-through.

How you define your digital transformation strategy will differ from business to business. One business may want to focus on improving the customer experience to raise average revenue per customer; another may want to reduce risk in the supply chain, improve productivity, or change the business model, Rogers said. Once it becomes clear what drives value creation, then the success of your transformation can be measured and specific KPIs can be set.

“It’s really an iterative process of learning through doing,” he said. “It’s not about a big upfront planning process before you start. And it’s not about big budgets at the beginning.

“Over time, as you start to learn what works for your market, you need to be ready to accelerate investment. But it’s the wrong mindset to say, ‘Well, we’ve got to build this big, detailed business case and spend a lot of preparatory time because we’re going to spend a lot of money.’ ”

When it comes to seed money, rather than leaning on “slow-moving systems of funding” aimed at one major financial investment in new technology, Rogers encourages companies to allot smaller pools of money that allow for rapid testing and learning along the way.

That’s another way Rogers works to help get companies off on the right foot — starting simply, by actually getting started.

“There’s a sign outside of the tree nursery down the road from our house,” Rogers said. “It says, ‘The best time to plant a tree: 20 years ago. The second-best time to plant a tree: Today!’

“I would actually say the same thing about digital transformation.”


Bryan Strickland is a senior news writer at AICPA & CIMA, together as the Association of International Certified Professional Accountants. To comment on this article or to suggest an idea for another article, contact Oliver Rowe at Oliver.Rowe@aicpa-cima.com.


AICPA & CIMA RESOURCES

Articles

When ESG Reporting Becomes a Maze, Technology Provides a Map”, FM magazine, 13 May 2024

How Finance Can Start to Use AI Automation”, FM magazine, 7 March 2024

How to Use Digital Technology to Upgrade Your Supply Chain”, FM magazine, 6 July 2023

Podcast episode

A Road Map to Avoid Losing Your Way on Digital Transformation”, FM magazine, 1 May 2024


LEARNING RESOURCES

Strategic Importance of Digital Transformation and Underpinning Technologies

Designed for the busy finance leader, this course provides you with the tools to determine a vision and strategy for digital transformation and how to apply best practice to lead digital transformation initiatives.

COURSE

Delivering Organisational Value Through Business Influence Certificate

Finance is ideally positioned to take a leadership role in organisational transformation. Learn to apply digital tools and leadership skills to become a strategic business partner for your enterprise.

COURSE

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