Today, the word digital and technology appears everywhere, however, the organization strategy is still paramount. Only when the organization strategy, is clear then we can look into Digital Transformation.
Any digital transformation that focuses solely on technology will ultimately fail. Any successful digital transformation today, must first involve looking into the current business model.
We must look into the business holistically, gone are the days whereby we were looking into digitalizing the Human Resource Department, the CRM, or Accounting software. Even the big debate on whether it should be Cloud; is largely settled.
Furthermore, Digital Transformation must never just be making a process more automated, faster, or efficient. Sometimes the question should be, do we even need to at all.
The 5 key questions most business owners should ask before undertaking any digital transformation to ensure they are proceeding in the right direction.
1. Will the business (industry or product) still be around in 5 or 10 years?
Answer this question honestly. Using the most up-to-date information, get someone to play devil’s advocate. Recently I was asked to assist a car exhaust manufacturer to look into the Digital Transformation of their business. My first reaction was isn’t the electric motor and batteries becoming the norm. If the entire business needs to change, isn’t it better to invest the money in a new business than digitalizing the existing one? What real benefits will it bring?
2. If the business is still relevant, which part of the business will have significant changes?
Very few businesses will be left un-touch in 5 years. The Covid-19 Pandemic has hastened the time frame. Most businesses especially those considered to be the middleman such as distributors, retailers, etc will most likely face significant changes to their business model. The answer to this question will have a significant impact on new strategies.
3. What is my value proposition for the business or product?
Be extremely clear what differentiates your business from the competitors and it must be something that adds value to the customer, not easily replicated by competition. Furthermore, make sure this differentiation is within your control. Your strategy should be centered around this value proposition.
4. Who will be my customers and how I interact with them?
A significant part of most digital transformation is how we can reach and market to our targeted customers. It will need an entirely different customer interaction and retention strategy. It will involve new networks and channels.
5. Whatever outcome we create, is it sustainable?
The triple bottom line is a significant consideration. We must protect our society, economy, and finance. Any organization strategy focused purely on financials, will ultimately not be sustainable for all.
