The world economy underwent a major shift by 2023 as a fallout of supply chain disruptions, the global pandemic, scarcity of microchips, political turmoil, and an alteration in economic systems.
To say that 2023 was a test of our adaptability would be an understatement. The impact was widespread, disrupting every business to some extent and causing a state of chaos. Nonetheless, a wise acquaintance once remarked that our response to change distinguishes us between adversity and prospect.
Some Advancements Do Not Depend on Technology to Progress
It’s not unusual to see new technology being introduced, and sometimes the transition can be so seamless that we are unaware of its occurrence. I can vividly recall how USB sticks were in high demand at one point, only to become obsolete in no time.
Despite being open to integrating new technologies, it doesn’t imply that people are always seeking change. Companies might choose to adopt advanced technologies to maintain their competitive edge.
Unfortunately, these organisations lose their competitive advantage by the time they have finished integrating the latest technology. Setting industry benchmarks is not achieved by following trends, but by adapting to market dynamics and competitors’ demands.
In 2023, John Chambers, the former Executive Chairman of Cisco, warned that without the ability to adopt new technology, around 40% of businesses could face failure within the next 20 years.
Chamber’s perspective on business may seem bleak and pessimistic, but it’s crucial to acknowledge that a Yelp report claims that 60% of American businesses which closed during the pandemic have remained shut to this day.
May I ask why you think this happened? It seems that companies that implemented a more versatile business model, offering their workers options like remote work, and making available useful online resources, managed to achieve more success than their rivals.
Although COVID-19 has had a significant impact on employment, it is not the only aspect worth noting. It appears to have accelerated a trend that had already begun; millennial and Gen-Z workers were already keen on remote work before the outbreak. Virtual meetings via platforms like Zoom were in high demand, and the benefits of XaaS in computing strength, data storage and delivery, had already been proven.
Employing digital technology in a well-planned and adaptable approach can bring about various cultural, operational, and organisational shifts within an enterprise, market, or ecosystem.
By adopting an enthusiastic mindset, we can welcome digital advancement and stay vigilant for emerging breakthroughs that could influence our industry. Nonetheless, this should be done under the guidance of a properly formulated implementation strategy.
Revamping operations is not a random decision, but a strategic manoeuvre towards keeping pace with current trends and surpassing the competition.
Impeding Progress: What Hinders Growth
A recent survey conducted by PTC illustrates that just 52% of companies with more than one billion dollars in revenue have fully implemented digital transformation. This implies that most large organisations are still reliant upon outdated methods. It’s evident that boosting digital transformation is not a simple task. What are the reasons behind this?
An essential component of Digital Transformation is examining operational goals and assessing their effectiveness. To guarantee the attainment of these objectives, it’s important to examine the reasons for their non-achievement.
According to Riverbed, there are five primary reasons impeding digital transformation.
- Limitations on Resources
- Rigid or excessively intricate current computer systems
- Failure to comprehend the entirety of the digital or user experience
- Human resource challenges, such as a shortage of qualified candidates
- Management’s reluctance to prioritise digital initiatives
The survey findings revealed that 80% of respondents encountered various challenges with digital technologies which had an adverse impact on their productivity and satisfaction.
The study unveiled that a considerable number of participants encountered several obstacles while trying to accomplish Digital Transformation. Consequently, it’s crucial to establish a Digital Acceleration Strategy to tackle these difficulties effectively.
When constructing an action plan, prioritisation is critical. It’s necessary to evaluate the available resources and allocate them in the most effective manner, irrespective of the situation’s intricacy.
The Significance of Bearing the 80/20 Principle in Mind
The Pareto Principle is not a new idea, but it is quite striking how often it is disregarded. This theory was initially put forth by Vilfredo Pareto, an Italian economist and academic in the 19th century, and was later refined by Joseph Juran.
The Pareto Principle posits that “80% of effects come from 20% of causes.” This is a concise explanation. For example, in the realm of mobile apps, the top 20% users, who make the most significant contributions, generate 80% of the revenue.
Although not infallible, the Pareto Principle, or the 80/20 rule, is still a useful concept. As Juran referred to as the “vital few,” the idea that most effects are caused by a handful of key factors holds significant value.
Given the multifaceted nature of organisations, their outcomes typically arise from a combination of factors, not all of which are equally important. Thus, it is recommended that we concentrate our efforts rather than dispersing our attention thinly across various causes.
Microsoft is recognised in the software engineering industry for its utilisation of the 80/20 principle. By prioritising the resolution of the most crucial 20% of reported problems, engineers can effectively address 80% of the system’s issues.
It is crucial to bear in mind that not all problems can be as straightforwardly pinpointed as a bug report. A lone line of code, for instance, can trigger numerous issues that may be difficult to trace to its source. This can result in stress and frustration in several circumstances.
A prosperous strategy for digital transformation should identify and allocate resources to the most crucial components. Although I cannot present an unequivocal list of what I consider to be the essential factors, I can provide some approaches that have proven advantageous to us in the past.
- To identify the root cause of problems with your digital transformation plan, consider using a model such as Ishikawa’s fishbone diagram.
- If you are having difficulty reaching your objectives, identify the most challenging aspect of the task, conduct comprehensive interviews with the appropriate individuals, and act on the collected data. This is similar to a detective working to solve a case.
- Speak with digital transformation experts to gain valuable insights from their extensive experience.
- It is crucial to make incremental adjustments to your plan and monitor the results; if you notice a rapid improvement, you may have identified one of the critical factors.
- As usual, trust your instincts; they are likely to be correct.
After the Dust Settles
The global community will eventually come to grips with the pandemic, but the new business landscape is here to stay. By adopting digital transformation, you can more effectively predict and ready yourself for the future. To ensure that this shift is successful, you must employ the most suitable method.