Welcome to the topic “Scaled Execution Of Digital Migration.”
COVID-19 crisis has forced most companies to digitize at least some part of their business. To remain competitive, businesses are migrating to digital. Digital transformation is proving beneficial in retaining employees and enlarging the customer base.
Since digital technology is transforming and disrupting organizations across a variety of fields, organizations are required to create and execute an effective digital transformation strategy. Businesses are adopting digital technology at a rapid pace. While it is generating new and better opportunities, it’s also creating risks.
Do you want to avoid digital transformation pitfalls?
Digital transformation can indeed change your business in a massively positive way, but you need to be cautious. In this article, you’ll learn about the risks of digital transformation and how to perform a successful digital migration.
Digital Transformation Continues To Gain Momentum
By the end of 2020, worldwide spending on digital transformation technologies and services would increase up to $1.3 trillion (by 10.4%). Despite the challenges presented by the pandemic, spending on digital technologies will witness strong growth across different sectors, ranging from 8 to 13.8%.
Recent data revealed that in just eight weeks, this pandemic has fast-forwarded consumer and business’ digital adoption by five years.
COVID-19 outbreak will continue to accelerate the pace of digital transformation. International Data Corporation (IDC) has predicted that more than 50% of all Information Technology (IT) spending will be for digital transformation and innovation by 2024.
Even after the pandemic, working from home will be more acceptable in companies. Organizations will continue to enhance employee’s digital experience and use communication and collaboration tools. Digital transformation will not only increase operational efficiency but also transform most of the existing business processes.
Businesses are embracing digital transformation technologies and services all across the globe. Organizations have realized the importance of integrating data analytics, consumer insights, cloud technology, and mobile platforms into their digital strategies.
In addition to all that, the rise in artificial intelligence (AI), machine learning (ML), and the internet of things (IoT) will completely change consumer experiences as well as workforce collaboration. The application of new technologies is rapidly changing the way companies curate experiences, manufacture their products, distribute, and service them.
Risks Of Digital Migration
According to Gartner Inc., 87% of senior leaders agree that digital transformation is the top priority of their company. But digital migration is not that simple. It requires expertise, strategy, and cultural transformation.
Most digital transformations do not succeed in reality. According to a survey of McKinsey Digital, less than 30% of organizations succeed in digital transformation.
Business leaders make strategic choices concerning investment, resourcing levels, technology, and digital skills. These choices impact not only the short-term profitably but also the long-term viability of businesses. Strategic decisions involve an element of risk.
Businesses have to cope with external threats and internal threats simultaneously. Study shows that 84% of digital transformations fail. Many major brands have experienced failures that resulted in job loss, defunding, and CEO exits.
According to Harvey Nash-KPMG survey, only 18% of organizations rated their digital technology practices as “very effective.” Successful digital transformation is not easy. The following are some reasons why digital transformations fail:
- Attempting “one and done” transformation instead of an iterative one.
- Lack of prioritization.
- Talent shortages and lack of digital skills.
- Insufficient funding.
- Operating models that don’t adapt to digital quickly.
- Lack of excellent and focused leadership.
Lack of digital mindset of leaders is the primary reason why digital transformations fail. Harvard Business Review agrees that a successful digital transformation is ultimately the responsibility of senior leaders of the company.
Many C-suite executives are of the view that digital transformation initiatives are an all-in-one solution. However, digital transformation is not something that can be simply slotted into an organization. That is the reason why scaled execution of digital migration is so important.
Digital transformations succeed due to the following reasons:
- The right leadership
During a digital transformation, change takes place at all levels. According to a survey by McKinsey, almost 70% of respondents said that their organizations’ top teams changed during digital transformation. Results of the same study indicate that when leaders have a digital mindset, companies achieve transformation success.
Adding a new leader who is already familiar with digital technologies is one of the keys to transformation success. Leadership commitment is also essential for successful digital transformation. When the leadership is more involved in the transformation, success is more likely.
- Developing talent and skills
Most digital transformations succeed when talent and skills are developed throughout the organization. Building capabilities for the workforce is an essential factor for success in digital transformation.
Business leaders need to redefine the roles and responsibilities of individuals in such a way that they align with the transformation’s goals.
The integrators and technology-innovation managers also play an essential role in the transformations. They can bridge the gaps between the digital and traditional parts of the organization.
Also, companies with successful transformations have a more robust and better-funded approach to digital talent compared to others. When an organization invests the right amount in digital talent, chances of transformation success increases by 3%.
- Empowering employees to work in new ways
Digital transformations also require cultural and behavioral changes across the organization. C-suite executives need to empower their employees to embrace the new changes. Success depends on senior leaders and people engaged during the transformation.
For successful transformations, companies reinforce new behaviors and ways of working that support organizational change. Along with that, employees should have a say on where digitization should be adopted. They should generate their ideas about digitization and where it supports the business.
The leaders need to encourage employees to challenge their old ways of working. When senior leaders and other leaders engaged in the transformation encourage employees to experiment with new ideas, success is more likely.
- Digital upgrade
Digitizing tools and processes also support success. Companies that adopt digital tools to make information accessible throughout the organization are more likely to succeed in digital transformation. You need to implement digital technologies for both employees and business partners.
Organizations need to modify their standard operating procedures and include new technologies. An increase in data-based decision making and the visible use of interactive tools doubles the likelihood of digital transformation’s success.
Importance of scaled execution
A digital transformation journey doesn’t have any finish line. Your goal isn’t just reaching a certain level in leveraging digital technology. You need to adapt to the new possibilities and technologies continuously. To sustain digital transformation, rapid application development and agility are crucial.
During digital transformation, companies need to internally transform the organization’s culture and generate innovative ideas along with external transformation aimed at providing a better digital experience to the consumers.
Most organizations go all-in on the digital transformation efforts. They start digital migration of their processes for both customers and employees and in all departments all at once. Only a few organizations succeed with this “one and done” approach.
Keep in mind that digital transformation is an ongoing process. With the emergence of new technologies and evolving customer expectations, digital transformation can never be finished.
Digital transformation is not a one-time event. So, companies must be prepared to execute digital migration via a scaled and continuous iteration cycle. The following are the seven most common digital transformation strategy steps:
- Assessing the current state of digital across the organization.
- Defining digital transformation objectives.
- Outlining digital transformation roadmap.
- Choosing the necessary tools and technologies.
- Establishing clear leadership.
- Setting a realistic budget for digital transformation.
- Empowering and educating the employees.
What do I need to do?
To ensure the scaled execution of digital migration, you need to approach the entire transformation process strategically. What does that mean? Don’t go all-in right away. You need to start with specific areas and then grow from there.
Most companies know the challenge. To remain competitive and relevant, it’s important to modernize the aging technology of the company. A part of this challenge is finding out where to start and how to go about it without disrupting the day-to-day business operations.
Scaled execution allows organizations to test the waters and gain on what can be done with their tactics, approach, and software with a conservative risk while disrupting business activities.
Do you want to execute a successful digital migration?
We are here to help. Our extensive global network of experts can help you succeed in digital transformation. We offer careful and scaled execution of digital migration to ensure that the strategy suits your unique business needs while minimising the risk.
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