The 4 practical steps a business needs to follow to implement digital transformation - Part 3
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The 4 practical steps a business needs to follow to implement digital transformation - Part 3

The 4 practical steps a business needs to follow to implement digital transformation - Part 3

University of Michigan's Ross School of Business shares the third in a 4-part article series on digital transformation, detailing the four practical steps companies can take to implement digital transformation – to successfully “make the leap” across the digital divide.

  • We are now in what Gartner calls the “hype” stage of a set of advanced technologies that include AI, Cloud Computing, Data Science, IOT, 5G and others
  • Being at the hype stage, there are many variations of solutions in the marketplace, driven by the fact that the “killer applications” (those that are both commercially and technically efficient) have not yet emerged
  • That will come next during the consolidation phase as the technology matures, becomes more affordable and more efficient, and clear adoption models have been identified

Authors: Mary Hinesly, Professor of Executive Education, University of Michigan Ross School of Business; and Jay Srage, Head of Operations - MEA, University of Michigan Ross School of Business. 

Welcome to the second in a series of four articles on practical steps companies can take to implement digital transformation – to successfully “make the leap” across the digital divide. These articles will be published over the coming days, so stay tuned for the latest articles in this series. 

Welcome to the third in a series of four articles on practical steps companies can take to implement digital transformation and “make the leap” across the digital divide.  

In Part 1 and Part 2, we talked about conducting a digital audit to more fully understand the current state of technology and cultural readiness in the firm, and took a deeper dive into educating employees to raise their skill level so they are equipped to lead and implement digital initiatives.  In this segment, we will address the process of selecting technology based on a rational framework. In the final segment we will focus of applying and implementing technology through collaborative communication.  We previously mentioned that when organizations attend to these four steps, technology adoption happens smoothly – a state of things we call “Technology Cohesion.” 

By following the first two steps, the company should now know, at least at the executive levels across different divisions and functions, the technology platforms they have and the gaps they need to fill to fully upgrade their digital technologies.  The end goal may be automating the few most important business processes, or something as lofty as building self-learning smart digital platforms that will help the organization overdeliver customer and stakeholder expectations.

Step 3 – Selecting the right technology based on a rational framework

We are now in what Gartner calls the “hype” stage of a set of advanced technologies that include AI, Cloud Computing, Data Science, IOT, 5G and others. How these technologies are applied will redefine companies, create new economic sectors and revolutionize existing ones. Being at the hype stage, there are many variations of solutions in the marketplace, driven by the fact that the “killer applications” (those that are both commercially and technically efficient) have not yet emerged. That will come next during the consolidation phase as the technology matures, becomes more affordable and more efficient, and clear adoption models have been identified. 

Several years ago, when working with the second largest accounting firm (in terms of revenue) in the US, we observed that they were very forward thinking, creating what we now call a Rational Framework for technology selection. Our team at the university helped them create a strategy to recruit digitally so all new employees were oriented to required digital tools prior to hiring. The firm invested in digital onboarding, using a rational framework to select the tools the new employees would be using for future tasks and job performance, ensuring new employees would have familiarity before they started their jobs.  They created an ecosystem by infiltrating groups of new employees into existing teams to accelerate adoption within those teams while providing channels for reflection, learning and rolling out new initiatives.

Read: HR departments have a key role to play in digital transformation

What follows is what we call the “DICE” model – a rational framework to select the technology that best fits the organization. 

  1. Define your growth path. AI and other defining technologies are not intended to just keep you caught-up with industry evolution, nor are they only to eliminate jobs. Those defining advanced technologies are intended to grow beyond existing goals for the company, and bridge you to the era of automation before other incumbents have made the leap. These technologies are intended to accelerate your growth and help you maintain your competitive edge. What is your growth path? What are your transcendent goals? Are you setting the pace, keeping up, or needing to catch-up?

  2. Invest in your organization.Once you have completed the audit of technology adoption, and educated the organization, it is time to invest in the organization by hiring key operational, technical and executive players who fill the skill gaps identified in the audit phase. Keep in mind that every other firm is going after those same tech-savvy players – to recruit them, you will need to create the kind of work environment that digital workers find attractive. Once hired, they will work together to execute on the vision and objectives set by the executive team. Ideally they will sift through the landscape, complete technical assessments, and select the technology solutions that will achieve the growth path.

  3. Collaborate to build the selection process. Selecting a technology platform takes more than an old-style RFP process launched by IT. Today, it requires a cross-divisional process that engages experts who apply their skills to define that process. These experts include data scientists, digital transformation operational managers, and others. The selection of technologies will require investments and customization.

    Each piece being selected should be viewed as its own venture that will require collaboration to be successful. Such collaboration will define new KPIs for productivity and efficiency with the introduction of each piece of the Digital Platform puzzle. The goal is to create a roadmap for technology implementation and define the gradual steps that will allow the company and organization to absorb those new technologies. In this process, each division will assess how they will maximize the positive impact of automation.

  4. Enable the Ecosystem.The winning organizations will become an active part of the Advanced Technology ecosystems, not just be a consumer of the ecosystem products. In this stage as we transition from hype to maturity, it is critical to leave a stamp of the company’s presence in the ecosystem of the industry you play in.  

    To do this you can build partnerships, invest in start-up companies, and develop talent in order to ensure the vision you set forth, and the technologies you invested in, have a chance of success in the future. This means contributing to the success of other players by participating in industry-level conversations about standards setting and opportunities for joint action.  Within these relationships, practice unselfish knowledge-sharing about how to  overcome challenges, whether economics, regulatory or commercial.  Help drive your industry towards the direction that works best for the interests of your company and all the other stakeholders in the ecosystem.  Be confident enough to know that if the  whole ecosystem is thriving, your organizational will reap even greater benefits. 

To conclude this segment, digital transformation is not a one-time activity but a long-term evolution of the company. Selecting advanced technologies for deployment in your firm requires a careful and rational framework that goes beyond the typical processes used in the past. The paradox is that within a very rational framework, the smart firms preserve the flexibility and freedom to experiment and fail along the way – they realize that organizational learn more through real world tests and adjustments than by endless paper planning exercises.  By filling key skills gaps, and encouraging collaborative action both within the firm and across the industry, you can position your organization to lead these changes rather than playing catch-up.  

Watch this space for our fourth and final installment of the series, on the topic of implementing technology through collaborative communication.

Read: Leveraging AI can save GCC governments up to $7 billion annually, report finds

Author
University of Michigan Ross School of Business

The Ross School of Business is the business school at the University of Michigan, well-known for its Master of Business Administration (MBA) program, which places a high level of emphasis on real-world experience and problem-solving. It is often ranked among the 10 best MBA programs in the world.

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