Unless you have been living under a rock, you would have heard of the term “digital transformation” that has been bandied around over the past few years by technology suppliers big and small.
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And why does it make a difference now, given that organisations, including governments, have been embracing technology to improve work processes and meet other business goals since the invention of the computer?
While digital transformation has been happening for decades – Singapore’s national computerisation programme, for one, started in the 1980s – I think what has been driving the resurgence of the term in recent years is the democratisation of technology, including artificial intelligence, and cheaper access to computing power in the form of cloud services.
Together, these factors have enabled a wider pool of organisations – beyond large enterprises with deep pockets – to tap into the so-called SMAC (social, mobile, analytics and cloud) technologies that have the potential to transform industries in orders of magnitude compared to the last two decades.
Stories of such organisations abound. We recently reported on how Mojo Power is using cloud-based microservices to shake up the energy market in Australia, by delivering power consumption data in real-time to households. Another upstart, Ninja Van, is using automation and algorithms to improve customer service and optimise delivery routes, disrupting the logistics industry in Southeast Asia.
Sure, those companies were born in the digital age and would undoubtedly take to digital transformation like a duck to water. But it isn’t just upstarts that have been making waves in digital transformation. Big boys like DBS Bank in Singapore and oil and gas giant PTT in Thailand are harnessing big data analytics to reduce trade anomalies and better understand customer needs, respectively.
One question that is often overlooked when we read about these success stories is: how did they do it? Perhaps more importantly, how did they overcome any resistance to change? And for companies such as traditional general insurance firms that have built their businesses around agents, how did they walk the tightrope between selling direct to consumers over the internet and ensuring their agents continue to keep their rice bowls?
Oftentimes, it’s never about the technology that determines whether an organisation is successful with any digital transformation effort. Building a culture of change is just as important – if not the most important ingredient – for success. After all, if people are resistant to change, you’re never going to get any buy-in, even if the benefits are obvious.
I remember driving a digital transformation pilot project years ago at an organisation that wanted to reach out to young consumers who were adept at using instant messaging (IM) as a form of communication. The idea was to roll out a live chat widget on the organisation’s website so customers can connect with service reps, some of whom had not used IM tools before.
The project was supported by the CEO, and I had put in place a change management plan that included training service reps on IM lingo and working with affected staff on the operational changes required to support an additional service channel.
While almost everything went according to plan and the pilot service was well-received by young customers, the culture of maintaining the status quo among some service reps and senior decision makers meant that the project did not go beyond its experimental phase.
These anecdotes hardly make it into the stuff we read on digital transformation, which tend to focus on success stories. Yet, I’d argue that such ‘failures’ should be celebrated, and are just as important in helping organisations understand what it takes to succeed in digital transformation.