According to the findings of the IDG’s State of Digital Business Transformation report, an overwhelming majority of firms (89%) have either put into motion or are planning to implement a digital-first approach by the end of 2018. The primary technologies driving businesses to digitally transform include big data/analytics, mobile, cloud, and APIs/embeddables.
As the digital landscape continues to evolve, more and more non-IT organisations are transforming their goods and services to capitalise on the opportunities enabled by emerging technologies. To successfully adapt to the ever-changing digital environment, businesses must undergo a cultural shift and embrace Agile practices. In addition, successful digital transitions require project managers to be at the forefront of the process, making tactical decisions to ensure the transformation is successful. Ultimately, project managers are essential for any organisation to navigate and succeed in the digital era.
What Is Digital Transformation?
In recent years, the digital transformation project manager has become an increasingly sought-after role for organisations of all sizes. Digital transformation involves the use of digital solutions to improve processes and increase efficiency. It is often used interchangeably with terms such as digitalization and cloudification, and can encompass a variety of different initiatives. In order to understand the concept of digital transformation and its various applications, it is important to understand what it entails. Digital transformation can involve utilising technology to improve existing processes, introducing new technologies to drive innovation, or a combination of both. It also entails developing strategies that can be used to implement these solutions and adapt them to changing business needs. By leveraging digital solutions, businesses can create competitive advantages, increase efficiency, and drive growth.
Digital Transformation focusing on “digital”
In the two decades leading up to the turn of the millennium, digital transformation was mainly focused on the digitization of existing analogue operations within businesses. As computers became more ubiquitous tools for office personnel, opportunities to improve efficiency presented themselves in various areas, such as inter-company communication, data storage, and contract management. During this period, advancements in technology allowed businesses to more effectively streamline and optimise their operations.
The concept of digital transformation continues to be of significant importance in the modern world, due to the continual development of technologies. We can observe evidence of this in digital-first companies, with teams transitioning to contemporary platforms, such as Slack and Google Docs, as well as collaborative document editing. Nonetheless, today’s concept of digital transformation is much broader than this, and is often referred to by other terms such as digitization and cloudification.
Digital transformation is focused on transformation
When we discuss digital transformation in the rest of this essay, we will be referring to the definition provided in the preceding section.
The development of digital capabilities is a more comprehensive form of digital transformation. This type of transformation may involve the incorporation of one or more of the following elements: product and service structuring, the use of digital technologies, the implementation of new processes and systems, and the adaptation of existing products to a digital environment. By implementing these elements, organisations can gain a competitive advantage in the digital age, allowing them to stay ahead of the curve and remain relevant in the ever-evolving technological landscape.
- Redesigning sales channels based on internet customer behaviour.
- Improving existing products or services by applying software development
- Gathering and analysing data to create analytics for internal or customer use.
In order to effectively capitalise on digital capabilities in the current market, corporations must utilise agile methods as part of the digital transformation process. These methods allow companies to be more attentive to customer demands, more proactive in collecting client feedback, and more adaptive to changing market conditions. While these can be seen as advantages, they can also present some challenges. Still, many organisations have successfully leveraged digital capabilities to improve their operations and processes. These are excellent examples for other businesses to follow.
Domino’s is going through a digital transformation.
Founded in 1960, Domino’s Pizza is an international pizza restaurant brand with franchisees operating in over 85 countries across the globe. However, the company faced difficulty in the early 2000s, with its shares falling to an all-time low of $3 in 2008. In response, the firm embarked on a digital transformation journey, which saw it reposition itself as an “eCommerce company that happens to sell pizza”, as Kelly Garcia, Domino’s Senior Vice President of eCommerce Development and Emerging Technologies, noted.
In an effort to increase digital product development while reducing costs at the franchise level, Domino’s has recently implemented a mobile-first strategy and utilised A/B testing extensively. As a result, they have recently launched a new platform known as Domino’s Anyware, which allows consumers to purchase meals through their mobile applications, as well as through SMS, Twitter, messaging platforms, smart speakers, and other forms of communication.
Domino’s has seen remarkable success in its transition to digital platforms, with its stock price increasing by more than 3000% between 2010 and 2018. This growth has outpaced even the most formidable tech companies such as Google, Amazon, and Apple. In order to further its progression, the company is now exploring the potential of voice interfaces and conversational eCommerce, as noted by Kely Garcia.
John Deere’s Digital Transformation
In 1837, John Deere established itself as a general repair business and manufacturer of agricultural tools, such as shovels and pitchforks. Over time, the company has become renowned for its production of tractors and other farm equipment, but its digital transformation has been even more remarkable than that of Domino’s Pizza.
John Deere has been transitioning into a data-driven enterprise over the past several years, with the aim of providing data-enhanced capabilities to their clients. This transformation is being executed in two ways. Firstly, John Deere is continuing to manufacture agricultural tractors while also integrating data-driven solutions into the production process. Secondly, they are leveraging data to offer new services and insights to customers that are tailored to their specific needs. Ultimately, the data solutions provided by John Deere are expected to give them a competitive edge in the mid to long-term.
To start, the company is enhancing its mechanical abilities through the integration of sensors and Internet of Things (IoT) technology to facilitate precision farming. Leveraging computer vision and Artificial Intelligence (AI) capabilities, John Deere is able to differentiate between various stages of plant growth, detect and eliminate weeds, and apply nutrients and herbicides only when required. This has been made possible through the acquisition of machine learning startups such as Blue River Technology.
Secondly, all of the machines operated by John Deere generate large amounts of data that is synchronised with the cloud every 5 seconds. This data is then transmitted to the company’s Operations Centre, a platform that has been adopted to make available to an assortment of third parties, from small AgTech startups to major organisations such as DuPont.
In order to keep up with the ever-evolving market, John Deere has implemented Agile methods, hired software engineers and data scientists, and established a presence in Silicon Valley. It is essential that the company’s employees who are experts in the machines collaborate with the new technological divisions. As Than Hartsock, Director of John Deere Precision Agriculture Solutions, puts it, “These two groups must come together and collaborate – they understand the equipment and the task it performs, and we understand the technology. By working together, we can create a powerful connection.”
Project managers should be thinking about digital transformation at the moment
It can be easy to mistakenly assume that only those at the board or executive level have the authority to make decisions about digital transformation. However, this is not the case, and project managers are particularly important during this process. In fact, they play a crucial role in the success of any digital transformation initiative.
Anand Swaminathan, a Senior Partner at McKinsey, has explained the difference between a technological transformation and a digital transformation, emphasising the importance of project managers in the latter. When a firm opts to implement an enterprise resource planning (ERP) system for financial operations, it does not necessarily require a significant overhaul in the company’s operations and customer relations. This is an example of a technological transition, in which the top-level executives have the primary decision-making authority and the rest of the affected personnel must adapt to the new reality.
Senior management outlines the objective of a digital transformation (such as a company that provides both eCommerce and pizza services), however, it is the responsibility of the organisation’s “executive muscle” – project managers – to bring the goal to fruition. Raj Swaminathan, an expert in digital transformation, explains that this gives the project manager a great deal of autonomy and control in making decisions. He states, “You are creating a completely new set of experiences, products, and services for your customers.” Therefore, it is imperative that project managers are equipped with the necessary skills and resources to facilitate the digital transformation effectively.
Digital transformation is plagued by difficulties
Every business is different and will face its own unique set of challenges. To assist in navigating the difficulties that arise, we have created a list of the most commonly encountered issues that could have a significant impact on the majority of businesses.
Customer requirements are overlookedCompanies have traditionally worked in segregated departments, with each department accountable for a certain role inside the organisation. The issue in such a framework is that only the top levels of decision-making emphasise the consumers’ interests. Employees begin to concentrate on the output rather than the result when it comes to real work with which consumers must interact (marketing material, customer service, product, etc.). The job becomes about making a pamphlet rather than imparting knowledge, about closing support cases rather than assisting consumers.
Client feedback is scarce.Following on from the previous point, if customers’ needs are not prioritised, it is probable that their feedback is not sought out or adequately collected when it does occur. This makes determining how to enhance the product or service much more difficult, particularly when attempting to rebuild everything around digital capabilities. Even for a major corporation, digital transformation is a startup situation. It is fraught with unknowns and needs continual customer input in order to deliver the best answers to the market.
Decisions are not made with data.It is significantly simpler to acquire and evaluate data when developing bespoke software. Most businesses have financial data but little use of statistics. As a result, judgments are made based on gut instinct. Using data to assist choices requires a shift in perspective as well as a new set of internal skills.
How to Be a Successful Project Manager During a Digital Transformation
When discussing digital transformation, it is important to recognise that it is not just limited to companies whose primary focus is not IT. Even technology firms have similarly undergone digital transformations. For instance, in 2016, Google announced that it was transitioning from a mobile-first to an AI-first approach. Although this is a type of digital transformation, in this article, the focus will be on firms typically outside of the IT industry.
Due to the fact that digital transformation is an all-encompassing endeavour for companies, no project manager can be solely responsible for its success or failure. Nevertheless, project managers can have a positive effect within their areas of expertise, which may improve the chances of a successful shift. In addition, it may open up career opportunities within the business, as those employees who demonstrate productivity during the transformation process are likely to be well-equipped to take advantage of the organisation’s new digital setting.
Distribute Agile Values
It is often underestimated how essential culture is to the successful implementation of digital initiatives in organisations. All too often, organisations assume that they can transition to a digital future without undergoing the necessary shifts to their cultural environment. However, this approach neglects the fact that culture is integral to any successful digital transformation.
Agile methodology is becoming increasingly ubiquitous in the digital world, and is set to become a cornerstone of all digital transformation initiatives. Whether an organisation opts for Scrum, Kanban, or any of the numerous Agile frameworks available, they are all rooted in the core principles outlined in the Agile Manifesto.
As a successful project manager, it is essential to have a comprehensive understanding of Agile concepts and be able to effectively communicate them to your team and colleagues from other departments. Additionally, it is important to challenge traditional methods of operation, and to involve stakeholders in the process of making internal procedures more agile. By approaching projects with this mindset, you can maximise the potential of your team and create a more efficient workflow.
It Is Important to Treat Legacy Processes with Compassion and Respect
It is important to acknowledge and respect the established practices and procedures that have been put in place. This is for two primary reasons. Firstly, it is essential to recognise and consider the context of the historical precedents when questioning the status quo. Secondly, it is important to recognise the value of existing procedures and practices, and to ensure they are not disregarded without proper consideration.
At the outset, it should be noted that habits are not easily modified and individuals are typically resistant to changing their established behaviours. Even though the organisation’s leadership may have concurred that the company needs to adopt an agile approach, the imposition of such measures is not recommended. Doing so is likely to arouse opposition and conflict with colleagues.
Furthermore, Agile is not the solution to all problems and this is especially true for organisations where IT is not their primary focus. Different departments have their respective levels of responsibility and potential risks, thus they may not all be able to adopt an Agile approach. For instance, mistakes made in the legal or finance departments may be much more costly and hard to undo compared to errors in a customer-facing platform.
As an Agile coach, it is important to take the time to consider the context in which existing practices have been established before attempting to modify them. It is essential to approach the situation with humility, as the current practices may have been implemented for reasons that are essential to the team’s success.
Create Client Feedback Loops
It is important to consider how your organisation currently interacts with customers. Examine all existing forms of customer communication, including customer service, sales staff, and project managers. Ask yourself questions such as: Does customer service have the primary role of communicating with customers? Are sales personnel mainly interacting with decision-makers? As a project manager, am I mostly engaging with customers at the beginning and end of a project? Evaluating your current customer communication strategies can help you determine if any changes need to be made.
Despite the possibility of completing projects without regular customer contact, many projects face problems with unmet or changed expectations when clients observe the outcome. While it may be difficult to involve clients in the production of physical goods, digital technology offers opportunities to involve customers more often and collect feedback more frequently. This is beneficial for aligning requirements early and avoiding issues towards the end of the project.
Reconsider User Interaction
Digital technology provides your organisation with the ability to communicate with customers and clients in novel and innovative ways. The most noteworthy advantage of digital technology is that customers and clients are able to make use of your products and services at their own convenience, achieving their desired results almost immediately. Many common customer interactions are typically time consuming and require a wait time for customers to be serviced, for example, email responses from customer service representatives, or account set up with an account manager.
If you are routinely dealing with the same customer support issues, you may want to think about establishing help pages or user-driven discussion boards. An additional alternative to consider is the implementation of chatbots. Additionally, designing self-supporting solutions for account management can be beneficial for both customers and employees; customers will have the advantage of immediate access to the services they need, and employees can save time by delegating certain activities to the users.
Transformation digital non è una panacea
Digital transformation should not be blindly embraced as a solution for all business challenges. Rather, many local companies may find that they need only to acquire specific digital competencies rather than undergoing a radical digital overhaul. Waterstones, a UK bookseller chain, provides an illustrative example of this. After a period of poor performance, the company announced profitability again in 2017. This was achieved through a strategy that focused on localising and differentiating itself from digital competitors such as Amazon. This is becoming increasingly significant as customers strive for a balance between their ultimately digitised lives and the unique, real-world experiences that can only be found in their local areas.
Two key criteria should be considered when assessing the need for digital transformation. Firstly, it is essential to understand the source of customers, in order to ensure that their needs are being met. Secondly, it is necessary to consider the desired interaction between customers and the company in order to maximise customer satisfaction.
If the response to any of these queries is “yes” and it involves digital technology, it is likely that digital transformation will bring benefits to your organisation. Digital transformation can open up new opportunities, improve efficiency and processes, and increase the overall profitability of your business.
Despite the potential for this topic to remain unaddressed, the competitive nature of the global marketplace will likely drive most firms to embrace digital technology in order to remain competitive and capitalise on the future advancements enabled by digital technology.
Many local businesses, such as coffee shops, kiosks, and small merchants, offer services that are tailored to their local community and thus do not require a full digital transition in the manner that digital-first enterprises do. Additionally, the presence of a physical component in a product or service can be used to determine whether or not a digital transformation is necessary. For example, activities such as dining at a restaurant and purchasing flowers are highly dependent on physical interactions, and whilst digital capabilities may enhance the experiences, a comprehensive digital transformation may not be required.
Digital transformation is more than simply converting existing processes to digital formats or moving operations to the cloud. It involves re-evaluating services and products to take advantage of current digital advances. As examples of successful transformation, John Deere has boosted their tractors’ capabilities with AI-driven data collection, while Domino’s has evolved into an eCommerce company that also sells pizza.
Project managers play a critical role in the successful implementation of digital transformation initiatives. To ensure that projects are delivered on time and to the required quality, project managers must be proficient in the use of Agile frameworks and be able to respond quickly to changing market conditions and new technologies. Moreover, effective project managers should create feedback loops with customers to ensure that operational software is delivered in accordance with their needs. By reframing user interactions, project managers can help their organisation stay competitive by providing timely and relevant results to their customers.