What It Takes To Make Digital Transformation An Organizational Competency

By
Zachary Nowland, Clayton Paul Maike & Katie Aten
What It Takes To Make Digital Transformation An Organizational Competency

Digital transformation isn't a one-and-done—learn how to make it a core competency so your enterprise is prepared for every tech evolution to come

Many companies are experimenting with the use of digital technologies such as artificial intelligence and machine learning to drive incremental value for their organizations. While the application of these technologies is certainly prudent, a “digital for the sake of digital” mantra has the potential to lead to a series of disconnected, patchwork solutions across the enterprise, which can prevent companies from realizing the full return on their investment.

Industry leaders are differentiating themselves by placing a strong emphasis on their digital transformation strategy and delivery model process for these initiatives. This means rethinking the traditional approach to technology projects and developing a new process, set of tools, and skillset to support digital transformation. In this article, we’ll discuss the three actions you can take to help make digital transformation a core competency for your organization.

Action 1: Define A Digital Transformation Vision and Garner Leadership Support

The path to making digital transformation a north star of your business begin by crafting a vision for how digital technology can impact your organization. When crafting your vision, it can be helpful to consider responses to the following questions at various points in the future (e.g., 5, 10, 20-years into the future):

  • How will digital technology change the way we serve customers?
  • How will digital technology change the way we operate?
  • How will digital technology change the way our people work?

Once you’ve established your digital transformation vision, it is critical that company executives and key leaders are bought-in on this vision. Leaders set the tone for how organizations respond to change, so it is not enough for leaders to merely signoff on the digital transformation vision, which would likely elicit a lukewarm response from the organization. To achieve organizational buy-in, leaders must become outspoken champions of digital transformation and the incredible impact it can have on the business.

 

Case Study: The Chief Supply Chain Officer (CSCO) of a global consumer packaged goods company recently bought into the benefits of Cognitive Automation and the Aera platform. By campaigning with regional deputies and key leaders in the company, the CSCO was able to ensure that the use of Cognitive Automation was adopted through the supply chain organization. The top-down mandate issued from the CSCO and their use of cognitive automation helped this organization infuse more agility and responsiveness into their operations. For instance, by leveraging Aera and automating data preparation activities, the supply planning organization was able to shift from a monthly to a weekly planning cycle, which allowed the organization more quickly to supply chain disruptions such as manufacturing delays, raw material shortages, or shipping delays.

Action 2: Create A Detailed Digital Strategy And Continuously Refine It

A digital transformation vision sets an aspiration goal for the organization. For this reason, it is natural for a company’s digital vision to be courageous and provocative, pushing the boundaries on what’s possible. While a grand vision offers significant utility as a motivator, to execute on your company’s digital ambitions, adequate time must be invested to develop and continuously refine a detailed digital strategy and roadmap.

When developing a detailed digital strategy, it is helpful to first identify your strategic objectives and desired outcomes (e.g., improve OTIF performance by 5%). Once desired outcomes have been established, the second step is to translate these outcomes into actionable initiatives targeting specific areas of the business (e.g., forecast accuracy improvement, distribution network optimization, etc.). The final and most important step is to execute and monitor progress using a robust value tracking approach.

The above process should be repeated on a regular basis to ensure the organization’s digital strategy stays in lockstep with the needs of the business. In a 2021 study conducted by Deloitte, reports showed that only 45% of companies refreshed their ongoing strategy annually, and 55% of companies refreshed their ongoing strategy every 2 years or more. While the nature of every business is unique, companies that treat digital strategy development as a one-time activity or that fail to reassess their digital strategy on a sufficient basis run the risk of misusing company financial and organizational resources.

Case Study: Deloitte Consulting recently conducted a strategy analytics assessment for a large, multinational consumer products company, resulting in the delivery of a detailed digital strategy and initiative roadmap. After Deloitte’s initial engagement, the consumer products company took forward the strategy and implemented a regular update process around it, which allowed them to continuously refine the strategy based on inputs from the business. The consumer products company has been able to unlock significant value by viewing their strategy as an ever-evolving activity rather than a one-time effort.

Action 3: Invest In Enabling Capabilities

Implementing digital technology use cases requires more than just an execution plan. In a study conducted by Deloitte, only 13% of Chief Strategy Officers felt confident their company could deliver on their plan to satisfy strategic objectives. For organizations both large and small, digital transformation success depends on enabling activities such as change management, business process integration, and talent development. Without adequate enabling capabilities, even the best technology projects can fail.

Change Management

  • Asking, and expecting, your organization to change their ways of working requires strong change management practices. Robust change management practices include frequent and proactive communications with end users as well as role-specific change impact/readiness assessments.

Business Process Integration

  • A key element to end user adoption is the integration of digital technology into the existing business process. If the process of using a digital tool complicates the existing business process or creates rework, there is a chance that the tool will not be successful. For this reason, it is critical that adequate time is spent during solution development to establish a new process or incorporate the new technology into the existing processes.

Talent Development

  • Successful implementation of digital capabilities requires the right analytical team, comprised of data scientists and architects with skillsets to build and incorporate the digital assets. Organizations need to invest in hiring or forming a dedicated team with the appropriate skillset and resources to dedicate time towards the development and implement digital capabilities.
  • Once implemented, end-user trainings for new systems must be available to business users to ensure practitioners can derive maximum value for the organization.

Case Study:  One of the world’s largest chemical suppliers recently stood up a supply chain excellence group, at the suggestion of Deloitte Consulting, which is responsible for the execution of all strategic supply chain projects. The excellence group had many responsibilities, most important of which included managing PMO, staffing a dedicated change management team, developing a governance process, crafting a common aligned-upon process framework, and rigorous value tracking. By crafting the excellence group and proactively investing in enabling capabilities (rather than as an afterthought), the organization was well-positioned to ensure change initiatives were carried out successfully.

In Conclusion

By taking the actions discussed in this article, you can make digital transformation a core competency of your organization. This means your company will be ready to capture the full value of new technology now and in the future.

By
Zachary Nowland, Clayton Paul Maike & Katie Aten
,
Deloitte Consulting
Published:
November 15, 2021
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