business model

The Top 3 Reasons Why Digital Transformation is so Difficult

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  1. Finding a vision when you don’t have anything concrete to go to

Firstly, take comfort in the fact that no one knew where things were going with digital disruption and didn’t have a clear vision to begin with. We are in the age of “we’re figuring this out as we go.” The fundamental question everyone will be asking you and your organization is why. Why is your organization going to actually go ahead and take this leap into whatever the heck “digital” is for you – especially if you are not traditionally a technology business. For some organizations it is clear – you are losing market share and money to disrupters. For some organizations, it might not be so evident (I know this sounds crazy, and yes we have historical examples of epic fails that should be enough) but depending on the kind of business you are in, and how your business has evolved – it might not be so obvious.

So what should you do?

Knowing that there is empirical evidence of organizational downfalls and why this occurred is probably the first start. Why is this important? It’s because you have to do some outside in scanning and understand the core business reason that it happened. Just because it is not your business exactly, doesn’t mean that the underlying issue can’t impact you (ego reasons, culture reasons, investment – or non investment decisions etc.) If you haven’t done it yet, you should perform a SWOT and PESTLE analysis. Take a look at the weakness/threats your organization has and the external things happening in your industry, nationally or globally that will at some point have an impact on your organization.

Next you have to determine whether you want to take an offensive or defensive (or both) approach to your transformation. There are a few reasons that are pretty standard that underlay digital transformation if you don’t consider it an imminent threat or if you’re not losing money… yet. You can choose from the below, what you think might be the most important to your organization and its future:

  • Because the pace of technology change is quicker outside your organization than in
  • Because customers demand better user experiences and access on all different types of technology platforms
  • Because the world is going to be increasingly interconnected through technology
  • Because you need to think about your succession planning and talent attraction/retention

Maybe its one of the above or maybe it is all of the above. But take your SWOT/PESTLE and any of the above reasons, as well as whether you think you should be going offensive or defensive. You now have your “why” and some places you think you should be headed as an organization. You have a vision of where you want to go and you can create an action plan around it.

2. Business Model Generation

Now the truth is – and if you’ve heard it once, you’ve heard it a million times – digital transformation is business transformation. What does this actually mean?

  • It means how you invest your money will change, because you will need to bring in new talent, stand up new divisions and the biggest will be how you invest in your technology infrastructure and architecture to enable your organization.
  • It means how your budgets are planned and allocated will need to change. People get resistant to having smaller head counts or having less money to do what they want. It might even change how you do your accounting in the business.
  • It means processes are going to change. Areas that once owned a process, or where certain decisions happened will change. Often people translate this immediately too: job loss. But no. It just mostly likely means that roles get to change, or the ownership of certain aspects of the process are shifting.

You can choose a variety of models for digital: Decentralized, Centralized, Center’s of Excellence, Offsite (Labs, Mode 1/2). What you pick is really dependent on how your business operates and what you think will help you get early wins. What matters most is that best practices in change management are carried out, which include tons of communication and that processes, roles and responsibilities get ironed out to prevent conflict.

3. A willingness to admit that you may not have the right people at the table

Digital is one of these tricky things that didn’t happen with a school degree. Most digital professionals (myself included), didn’t have a digital degree option when we were in school – and had to go through the evolution of this industry in the school of hard knocks. You might (or might not) be surprised by this, but many digital professionals came from IT (development or product engineering) or marketing/communications – because digital really is the intersection of these functions.

There are numerous debates about whether Digital should be part of IT, or Marketing or on it’s own – but nonetheless it requires people who have real experience in delivery of digital products and experiences. More importantly it requires people at the decision making table with the experience to understand what the organization is being asked to do when it comes to becoming digitally enabled. It means having someone who is versed in digital who can inspire and excite, can see the future of where your organization could go digitally and who can ruffle feathers in a non-threatening way while pushing change in places with less resistance to drive the places with more resistance.

Why does this matter? Those who work in delivery know when someone does or doesn’t understand. You must have a leader that is able to talk to developers, engineers, UX pros, look at the analytics and understand what they are telling you. This is the difference between garnering real respect from your reports. Their belief in you as the beacon for organizational change rides on this respect.

It also requires someone who can speak to the rest of your business and build and nurture relationships for when the going gets tough (cause it’s gonna)! If you have someone at the table who can really understand the details of what is required to deliver digital transformation, it helps decision makers understand what they are getting into. Someone at the decision making table with these skills means the ability to create the endorsement, relationships and support needed to mobilize an organization to really make change.

Do you have the right skills in the right places with the right people to make your organizational evolution possible? It’s a tough call, and only you know what your organization needs – but it does mean you have to be willing to admit that you may not have what you need.

What are some of your lessons learned that you would be willing to share with other change agents?

Updated: To Centralize or Not Centralize Digital

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centralized-vs-decentralized-md

 

I was inspired to write this post because of taking a new role, and having had the opportunity (at this point in my career) to see all variations and attempts at different digital business models.

While digital is a technology driven field, I do think that there lies some significant differences between digital and IT. For these reasons, there are markers between the two and for the most part the people who play in these arenas are able to identify them while understanding where the blur is. At the same time we understand that we also need one another.

All that said, I think that digital taking on IT business models may no longer the most efficient use of time and resources. Digital is considered disruptive in nature. It surprises me just how much of an IT business model digital departments adopted in the push to centralize things, rather than looking for business models that challenged the traditional architectures of what frustrated digital people about IT in the first place.

Without a doubt there is need to have a centralized place where there can be an inventory of digital assets, and aligning with enterprise wide technologies, standards and securities.  I agree that it makes sense to have guardians of the realm so that people aren’t running all willy nilly all over the place inventing broken experiences and orphaned or abandoned digital assets.  I get it.  I really do.  And more than anything I am a big proponent of not allowing things like this to happen in companies because of negative brand impact, user experience and more critically adoption and engagement that is such a central focus of Digital ROI and big data.

That said, most digital departments really need to look at their business model.  In small to mid sized companies a completely centralized digital business model makes sense.  They are more agile and flexible, making adapting to change and new technologies less rigid.

However, once you move into larger organizations this stops being efficient.  Now you have business units competing for dollars, shifted around as priorities of importance and girdlocked in process that allows technology and user experiences to become outdated and frustrating. This very quickly turns into brand trust and perception, things that take forever to develop and can so easily be broken.

Digital fluency needs to exist in all areas of the business, all the more reason why centralizing digital no longer makes sense as a business model.

Here is the structure I propose and why digital needs to become a more decentralized business model:

  1. Each business unit should have a dedicated digital team that controls, manages and governs their digital assets.  This dedicated team needs to sit within the unit to best understand the business needs, audience and goals they are trying to achieve.
  2. Having a dedicated team means that there needs to be dotted line reporting.  These roles should ultimately roll up into digital but have a dotted line reporting structure into the business unit.
  3. Vendor contract negotiation and relationship management for any technology that plugs into digital assets for the business unit, should reside in this group.  Ultimately at the end of the day, vendor shortfalls impact the digital experience.  Users have one experience.  They can’t see the difference.  If a vendor isn’t delivering which ultimately impacts brand perception and users, this group needs to have the authority to let them go and find better options.
  4. Digital Departmental budgets.  More and more independent business units need to begin considering that their budgets need to be inclusive of digital spends.  IT needs to take care of the enterprise wide infrastructure without a doubt.  Parametres need to be set, however digital departments within the unit should have their own budgets to provide ongoing website maintenance, ad hoc campaigns, or added features that may not have risen to the top of the IT priority and budget chain enterprise.
  5. This structure should also remove lock downs on existing or new digital assets.  It made sense in the past to have front end dev, CMS’s and SEO locked down in old world structures.  People in the business unit  were not digital or tech savvy enough to understand what they were doing or the ramifications of what an error on their end could cause.  With digital people in existence, much of this has changed, therefore the ability to do front end things needs to be opened up to allow for customization and elements that may short term in nature.
  6. Lead the overall strategy with regards to device roll outs within the unit. Sounds insane right?  But digital needs to work closely with the business unit and with IT to determine what makes the most sense.  Otherwise you end up in what I call the digital  “black hole.”  That’s the place where your sales team all got new iPads that would enhance their abilities in the field all while the enterprise infrastructure and business unit technology was never optimized or able to support a mobile experience.
  7. Regular regroups with the enterprise wide digital team.  Being ultimately tied back and part of the digital team, means that regular meetings need to happen.  Weekly with the reporting manager, and monthly with the digital team as a whole.  This would allow for idea sharing, resolution sharing, and identifying what the common trends are across the enterprise that may require deeper and more extensive research or dedication.