Article by Peter Stutz, Portfolio Manager: IT Infrastructure at Jasco Enterprise
Technology predictions foretell a future world where virtual reality (VR), artificial intelligence (AI), robotics and automation are the norm – in both our personal and business lives. These technologies, among others, are set to completely change the way we interact with each other and the world around us, as well as how we behave. Many organisations across the globe are already gearing towards this future, embarking on digital transformation journeys that will cater to the changing markets. South African companies are no different. In order to compete in a global market, South African businesses need to embrace the idea of ‘disrupt, or be disrupted’, and begin to leverage technology to enable digital transformation.
This journey, however, does not come without its challenges, which could hinder an organisation’s ability to realise the full potential of transformation. Identifying and overcoming potential roadblocks is critical to ensuring digital transformation provides the maximum success and business benefit.
Technology’s role in digital transformation
While technology significantly paves the way towards digital transformation, many organisations also believe it to be the biggest stumbling block. This is partly attributed to a fear of the unknown, and reluctance to embrace new technologies. This reluctance, coupled with a lack of understanding of how best to use the technologies in their own organisations, is preventing many companies from truly joining the digital revolution. Having said that, the biggest roadblock is often not the technology itself, but rather the mindset. A forward-thinking inclination and ability to embrace change is required to drive successful implementation.
New technology has traditionally been driven by the IT department, which they would identify and implement, providing a service and answering the needs of the business and its customers. There is a strong focus on customer centricity within business, and with a diverse and evolving customer base, IT decisions are now increasingly driven by the business in direct response to customer demand.
Technology is being seen as an enabler of customer services. It provides the agility and fluidity that customers are looking for in a business – a tool used to deliver business value and drive digital transformation. Digital transformation is therefore seen as a way to enhance and improve upon customer interaction, rather than a way to simply implement technology.
Roadblock 1: Skills
Traditional IT specialists may not have the skills necessary to understand the business value of new technologies, or how to implement them for maximum impact. Typical IT approaches problems on a case by case basis, applying a technology to a specific problem. Digital transformation means that a technology needs to be matched to a use case which enhances the customer experience. New technologies such as applications (across multiple platforms), AI and VR require more programming expertise and business analytics than the capabilities commonly associated with IT.
The key to overcoming the skills shortage roadblock is not to replace IT teams or other staff with programmers or AI – but rather to upskill where possible and also ensure that the organisations invest in the correct resources that have skills in customer experience, business analytics and technology. Businesses should aim to re-train and re-deploy existing employees to parts of the business where more value can be derived. This is an opportunity to develop new, in-house competence – to grow an organisation’s workforce and create functional teams in line with its digital growth.
Service providers can play a very supportive role in this process, as well as that of shifting the mindset of the workforce to one which embraces and actively uses new technologies. Transition is best driven through collaboration between business, IT and a consultative service provider.
Roadblock 2: Measurement
Another potential roadblock is the measurement of digital transformation. Businesses are rapidly moving towards a more digital way of working, however, it is not easy to measure the success of the transformation without specifically targeted problems that are addressed. Financial value, or return on investment (ROI) is equally tough to determine. Measurement is becoming less about attributing an ROI to a specific technology, and more about overall profitability driven through customer acquisition and retention.
The ROI models for disruption have yet to be firmly established, but as expenses are linked to replacing old technology with new, there will eventually be a measurable value attached to it. Until then, most organisations are still experimenting and will need to measure success by looking at the customer benefits achieved. Adopting a milestone, or step-by-step approach to a business’s digital transformation strategy can also go a long way in assessing how quickly and effectively goals are met.
Roadblock 3: Compliance
Compliance can be restrictive. There are a host of new and existing regulations that need to be met, and new developments are underway to regulate technologies as they emerge. It is important to maintain the right checks and balances to ensure that technology is implemented in compliance with these regulations.
Roadblock 4: Pace
Everyone wants to innovate and be disruptive as quickly as possible, and with good reason. The digital world is evolving so quickly that businesses need to adapt and move as fast, or be left behind. However, it is vital to implement a step-by-step approach, which addresses the areas that will provide the biggest value first.
At the same time, organisations cannot afford to wait for a technology to reach maturity before adopting it, especially when that technology could place them at the top of the food chain.
Balance is important, and weighing up a measured approach against fast implementation is critical for success. Knowing where to find that balance, and what will work best for an organisation is where leveraging third party partners can make all the difference.