By 2023, the global economy had undergone a significant transformation in response to the epidemic, supply chain disruptions, a worldwide chip shortage, political unrest and a shift in economic structures.
It would be an understatement to say that 2023 tested our ability to adapt. Every company was affected to some degree, and the situation was chaotic. However, a friend of mine once said that how we react to change is what differentiates between trouble and opportunity.
Not All Progress Is Accelerated by Technology
The adoption of new technology is nothing out of the ordinary; often, it can be so gradual that we don’t realize it’s happening. I distinctly remember when USB sticks were being distributed like sweets, and yet how quickly they became redundant.
Although we may readily accept new technologies, this does not necessarily mean that we are eager for change. Businesses may opt to embrace new technologies in order to stay competitive.
However, by the time these businesses have completed their transition, they have lost their competitive edge. It is not those who follow trends that set industry standards, but rather they who must adapt to the requirements of their competitors and the market.
In 2023, John Chambers, the former Executive Chairman of Cisco, predicted that, unless companies are able to embrace new technology, up to 40% of businesses could fail in the next two decades.
Chambers’ outlook on life may be misinterpreted as gloomy and fatalistic, however, it is important to note that according to Yelp, 60% of businesses in America that closed due to the pandemic have not yet been able to reopen.
Would you care to speculate as to why that was the case? The success of businesses that embraced a more flexible approach to their organizational structure, such as enabling employees to work remotely and providing helpful online tools, was greater than that of their competitors.
COVID-19 has undoubtedly had an impact on the workplace, but it is not the only factor to be considered. It seems to have expedited a trend that was already in motion; millennials and Gen-Z employees were already eager to work remotely prior to the pandemic. Zoom had become a popular platform for virtual meetings, and the advantages of XaaS in terms of computing power, data storage, and delivery had already been established.
Incorporating digital technology in a strategic and agile manner can lead to a range of cultural, organisational and operational changes within an enterprise, market or ecosystem.
With an attitude of anticipation, we can embrace digital acceleration and remain alert to developing innovations that could have an impact on our sector. This should, however, be done within the framework of a well-conceived execution plan.
It’s not a random choice to shake things up; rather, it’s a calculated move towards keeping up with the times and being ahead of the competition.
Slowing Down: What Stands in the Way of Progress
PTC research shows that only 52% of organizations with revenue exceeding one billion dollars have fully embraced digital transformation. This indicates that the majority of major businesses are still relying on outdated processes. It is clear that accelerating digital transformation is not a straightforward task. Why is this the case?
Analyzing process objectives and evaluating their success is a key element of Digital Transformation. To ensure our goals are met, we must investigate the reasons why they are not being achieved.
Riverbed claims there are five main factors holding back digital transformation.
- Constraints on Resources
- Inflexible or too complicated existing computer systems
- Inability to see the whole digital or user experience
- Staffing issues, including a scarcity of qualified candidates
- Leadership’s reluctance to put digital projects at the forefront
Results of the survey indicated that 80% of respondents reported experiencing multiple issues with digital technologies that negatively impacted their efficiency and enjoyment.
The survey revealed that a large proportion of respondents experienced multiple issues when attempting to achieve Digital Transformation. Therefore, it is essential to implement a Digital Acceleration Strategy in order to effectively address these challenges.
It is essential to priorities when creating a strategy for taking action. Regardless of the complexity of the situation, it is imperative to assess available resources and distribute them in the most efficient way possible.
The Importance of Keeping the 80/20 Rule in Mind
The Pareto Principle is not a novel concept, however its tendency to be overlooked is remarkable. This theory, first proposed by 19th-century Italian economist and academic Vilfredo Pareto, was further developed by Joseph Juran.
The Pareto Principle states that “80% of outcomes can be attributed to 20% of causes.” This is a succinct statement. For instance, in the mobile app sector, the top 20% of users, who are the highest contributors, account for 80% of revenues.
The Pareto Principle, or the 80/20 rule, is not without its flaws; however, the notion that the majority of outcomes are a consequence of a few key factors, as Juran referred to as the “critical few”, is a valuable concept.
Due to the intricate nature of businesses, the outcomes they encounter usually stem from an amalgamation of elements, not all of which are of equal significance. It is advisable that we focus our endeavors rather than spreading ourselves too thinly across a range of causes.
Microsoft is renowned in the software engineering sector for its implementation of the 80/20 rule. By focusing on resolving the most critical 20% of reported issues, engineers are able to address 80% of the system’s problems.
It is important to note that not all issues can be identified so easily as a bug report. For example, a single line of code can cause a multitude of issues, which can be difficult to trace back to its origin. This can lead to stress and frustration in many situations.
A successful digital transformation strategy should be able to pinpoint and direct resources towards the most essential elements. While I cannot provide a definitive selection of what I deem to be the most important considerations, I can provide some tactics that have been beneficial to us in the past.
- To pinpoint what went wrong with your digital transformation plan, try using a model like Ishikawa’s fishbone.
- If you are struggling to achieve your goals, identify the part of the task which has been most difficult, carry out thorough interviews with the relevant people, and act upon the gathered data. This is akin to a detective attempting to solve a case.
- Consult with experts in digital transformation to get valuable insight from their years of expertise.
- It is essential to make gradual alterations to your plan and keep track of the outcomes; if you observe a prompt improvement, you may have identified one of the essential elements.
- As always, listen to your instincts; they’re probably right.
At this Point Once the Smoke Clears
The international community will eventually come to terms with the pandemic, however the new business environment is here to stay. By embracing digital transformation, you can better anticipate and prepare for the future. To ensure this transition is successful, you should use the most appropriate approach.
