Topics ranged from identifying the drivers for transformation to managing organizational change — but it’s safe to say none of us could have predicted or prepared for the unprecedented waves of disruption we’ve faced since then. It’s equally safe to say many of the priorities and objectives discussed by attendees at the time were put on hold over the course of the year.
While the events of 2020 accelerated many digital transformation initiatives — particularly those related to enabling remote work and e-commerce — most organizations were forced to make a broad shift in focus from innovation to business survival.
But as hopeful signs of economic recovery begin to appear on the horizon, organizational leaders are preparing for renewed emphasis and investment in digital transformation in the new year.
Gartner reports IT leaders expect a 2% increase, on average, in their IT budget for 2021, while boards of directors plan to increase spending on technology by an average of 6.9% across the enterprise.
These shifts are indicative of hard lessons learned in 2020 — as those organizations that managed to increase funding of digital innovation despite the pandemic were 2.7 times more likely to be ranked as a top performer. 69% of these top performers plan to further increase funding for digital innovation in 2021.
For those businesses that were forced to delay transformation projects this year, these pent-up demands are expected to reach a head in the second half of 2021, resulting in a surge of investments. Keeping up with the competition and capitalizing on anticipated economic shifts will be dependent on how quickly and effectively your organization can ramp up these initiatives.
As we learned emerging from the Great Recession back in 2010, the companies that came out strong and invested in new business models or digital products and services were positioned to thrive during the recovery. The ones that didn’t have struggled to survive in the years since — and many have been knocked off the map completely by this year’s pandemic.
When setting goals for the new year, it will be critical to not only embrace best practices for digital transformation but also learn from these experiences.
While the levels of change brought on in this past year were (and hopefully will continue to be) unique in source and scope, the end of 2020 will by no means represent the end of disruption itself. As a result, the first lesson to be learned from this year is also the most obvious — change is constant.
Those organizations that recognize the need to consistently and rapidly respond to change will be better positioned to not only survive but also capitalize on disruption moving forward.
Becoming a change-capable company starts with embracing the mindsets, processes and tools that empower leadership and your workforce to manage uncertainty. Business agility requires a collective understanding that change is often painful but necessary, and a commitment to stay focused on the future rather than the transitional state. As renowned organizational strategist Geoffrey Moore famously put it, “Transformation is like heart surgery. It’s better to go in prepared than worrying about the cost. And once you’ve started the process, you have to finish it.”
To alleviate some of the challenges that come with monumental change, organizations must be willing to tackle transformation in incremental stages, both strategically and financially. By taking small, manageable steps and iterating toward larger goals, businesses can continuously progress on the digital transformation journey while remaining agile enough to react to new demands.
More insight: Read the whitepaper, Change-Capable Organizations Embrace the Human and Technical Sides of Transformation, for more in-depth analysis and guidance on the five steps to digital transformation.
Finally, the most important lesson of this past year has been a confirmation of what many experts already knew — digital transformation is about more than just IT. While technology is a key component in helping your business identify and respond to evolving organizational and customer needs, even the most advanced solutions are only as effective as the user. To maximize the value of transformation, leaders must support the human side of change by establishing a change-ready culture and driving long-term adoption and sustainment.
With these principles at the heart of your strategy, you can begin taking steps toward digital innovation in 2021 and beyond.
Whether your business is focused on leveraging distributed cloud, Artificial Intelligence (AI) or the newly dubbed Internet of Behaviors (IoB) to accelerate growth in the coming years, successful digital transformation begins with a conscious balance between the human and technical sides of change.
Use these five steps to guide your transformation journey.
Before investing in a digital transformation initiative, you’ll need to first identify, analyze and clearly define the core business need that a new technology or process will address. While it can be tempting to jump ahead to evaluating solutions, it’s important to resist this urge. Take the time to really understand the drivers in order to avoid misalignment and wasted investments down the line.
A few helpful strategies include:
Successful transformation depends on people adopting new ways of thinking and working. The more a project depends on people changing mindsets or behaviors, the higher the uncertainty of Return on Investment (ROI). Organizational Change Management (OCM) provides the quantitative, data-driven processes to evaluate and manage the human side of change. Leveraging OCM to assess your organization’s readiness for change early on can help you get a better sense of the scope and scale of potential challenges on your transformation journey.
A few valuable tools include:
Regardless of your goals for digital transformation, you’ll need to ensure the technology, data and people that make up your organization work together effectively to meet your business requirements — now and in the future. An Enterprise Architecture (EA) strategy will help to guide the decision-making process, providing essential visibility, consistency and scalability. Once you’ve established your EA strategy, you can then begin to build out the key technology enablers, tools and skills that will be required to support your implementation.
As you plan, it will be important to establish best practices around:
Embracing digital transformation requires organizations to manage combined and often conflicting challenges of rapid change amidst vague constraints and complex interdependencies. Attempting to tackle these issues with a traditional waterfall methodology is cumbersome and incurs a great deal of risk. Instead, the iterative and incremental approaches supported by Agile and DevOps are far more effective. These models go hand in hand to support the steady, ongoing delivery of results through a cyclical pattern of releases and upgrades.
The benefits of implementing both Agile and DevOps for transformation include:
It’s important to remember that everyone adapts to change at their own pace. As new technologies and processes are implemented, you’ll need to continue to leverage the principles and practices of OCM to manage the effects of change and ensure long-term adoption and usage. Demonstrating active and engaged leadership will be key to the success of your initiative. Likewise, proactive and consistent two-way communication will reinforce the value of change while helping to identify any areas of resistance.
The five levers of OCM give you the tools to maximize the value of change:
As you begin transforming your business for 2021 and beyond, remember, no significant change is easy — but any easy project probably won’t end up having the desired effect. And the cost of stagnation is much larger than the day-to-day impact of transformation.
Setting clear expectations and managing through iteration and adoption is key. And, wherever possible, don’t hesitate to leverage strategic partnerships or managed services to guide and support your goals. Traditionally, it takes 10+ IT partners to successfully execute a transformation. This support not only improves project outcomes, but also empowers your workforce to stay focused on your business.
In the end, the value of digital transformation doesn’t come from orchestrating 1,000 great ideas. It comes from persevering with a few great ideas that can be continuously adapted, improved and built upon over time.