(by Sandro Zilli)
SCENARIO
In 2020, thanks to the systemic shock of the COVID-19 pandemic that has hit health and economic systems around the world, a dizzying expansion of new exponential technologies that will have the objective of improving the quality of life of people is expected.
We are witnessing the consolidation of an already widespread phenomenon, which has brought radical changes in organizations, not only in the way of understanding work, but also in the way of designing, producing, communicating, selling and more. The phenomenon is driven by accessibility to new technologies and by the transformation of customer habits, which tends to have increasingly "digital" behaviors in their normal life; a return to "analog" modes is unlikely and perhaps, at this point, even undesirable.
We are talking about a transformation of the context, in which the speed with which the change of the "status quo" occurs is disruptive and forces organizations and companies from all walks of life to reconfigure themselves if they do not want to run the risk of disappearing. Being responsive in this new digital era becomes a decisive aspect, as the change of organizations will touch all sectors and push the business towards new dimensions.
This evolution will change the traditional boundaries of companies, making them indefinitely and paralyzing competitors who will not be able to adapt.
It is clear that in this dynamic, fluid and stimulating scenario, a dose of creativity is needed to find solutions outside the box.
WE TRY TO UNDERSTAND THE DIGITAL CHALLENGE
Current organizations, from businesses to institutions, are structured on a linear basis and therefore diametrically opposed to the exponential paradigm. They have organizational models based on hierarchical structures, centralized, based on silos, with top-down flows. Often, they are founded on the ownership of goods and burdened by the scarcity of talents, resources and technological platforms.
Basically an organizational scheme dating back to the last century, an era made of economies of scale, stability and predictability.
In their current linear configuration, most companies may be unable to keep up with the rapid changes underway, unless they adopt an innovative exponential model. This model provides for a new organizational approach, designed for a more open and transparent world based on the abundance of data, technologies, platforms, information, making the one based on scarcity obsolete and irrelevant. In practice, the challenge for companies is no longer performance but relevance, or the continuous ability to adapt to changes by rethinking the way of operating, the business models and the entire customer experience. Data indicate that market leaders are changing faster and faster: the average life of the Top 500 Fortunes has decreased from 75 to 12 years. At these rates, in the next ten years, 40% of all the companies on the Fortune 500 list will disappear for the benefit of new entrants who will be able to better interpret the era in which they are doing business. There is no doubt that in this fourth industrial revolution, anyone who knows how to leverage exponentially accelerated technologies such as Big Data, IoT, Artificial Intelligence, Cloud, etc. will be successful.
In practice, we have moved from a company where the main asset was capital to a data-driven one, where the main asset is data. The companies that are worth more today do not emerge thanks to the cash flow they generate, but for the ability to manage and use the data perfectly correlated in their operating context. And it is precisely access to information that now makes possible new winning business models.
6 KEY ELEMENTS TO MANAGE DIGITAL TRANSFORMATION EFFECTIVELY Whatever the a phenomenon that the company has to face, it is increasingly required to adapt and foresight. There is no doubt that the main drive behind digital transformation is a rethinking of one's way of doing business, understood as, the conscious choice to invest in human capital, in the study of processes and finally in the acquisition of the technology necessary to operate in a performing way.
The implementation of new technologies within organizations is no longer an option, but a necessity, especially if you want to innovate in the right times and effectively.
There are several strategic and practical actions that can be put in place to change one's mindset and guide the digital transformation process in a profitable way; here are six key elements to refer to to build a successful strategic plan:
1 - Define the objectives
Through the definition of clear and specific objectives it is possible to remodel every aspect of the company. According to McKinsey, technology can be exploited to generate value in companies of four
ways: advanced connectivity, automation, improvement of the decision-making process and innovation of products or services. Whether it is a transformation of the business model or an improvement in the operation of the systems, the definition of the objective remains the main asset and can be easily clarified by answering the following questions:
why do you want to invest in digital transformation?
what is your starting point?
what are your priorities?
what metrics will you use to measure your progress and success?
2 - Integrate the processes
The customer today is increasingly prepared, complex and greedy for information. It makes use of various types of tools before proceeding with a purchase, using different contact systems with brands and products, in a "multi-touchpoint" mode. Each point of contact between the customer and the company must therefore take place in the most agile way possible and with valuable content. All this is possible only by guaranteeing an integrated management of all the processes and phases of the value chain. The better the user experience, the greater the result achieved by the company.
3 - Value of leadership
Digital transformation requires a change in organizational activities, processes, skills and models. Therefore, effective leadership is needed, which knows the markets, the business needs and supports the whole process. The major success stories show that the companies in which digital expert leaders operate are the ones that achieve the greatest results in terms of digital transformation. This step is crucial because the challenge that organizations face, when a change occurs, is the creation of a team game between those who have the task of defining the modus operandi to direct the business and those who must "ground the strategy ".
4 - Adaptability
In a constantly evolving scenario, the most important qualities for a company are: agile approach and innovation at every stage. These characteristics favor the ability to easily adapt to change and continuously improve business processes, adjusting the various strategies based on the data collected and subsequently processed. In practice, with an agile approach, the organization can make incremental and iterative progress towards the objectives and at the same time manage the complexity and unpredictability of digital projects in a profitable way.
5 - Communicate clearly
Clear and effective communication is essential throughout the digital transformation process. People need to have a clear vision and understand where the company is going, why it is changing and above all why these changes are so important for the whole organization. Only with clear communication can ideal conditions be created so that the potential of digital and its positive impact on the whole organization is fully understood. The chances of success are greater if people are aligned with the new goals and are involved in the various initiatives.
6 - Focus on skills
The key to ensuring the efficiency of the entire digital transformation life cycle is the creation of an integrated and multifaceted work team. The skills needed to deal with the transformation must include:
- data analytics
- Software development
- Cybersecurity
- Digital literacy
- Change management
- Creativeness
PROJECTED IMPACT
After analyzing all these factors, the importance of digital transformation is evident. Every business leader has a duty to understand the value and estimate the potential of his company and, on the basis of this, invest proportionately to adequately face risks and opportunities.
This whole process must absolutely be addressed taking into account the human element aimed at: promoting the updating of skills, pushing for a healthy corporate culture, empowering people in the company, facilitating communication and sharing. In addition, more generally, the fundamental requirements of organizations for a successful digital transformation must be: rapid adaptation to the situation, focus on important and easily accessible things, proximity to the customer, Optimism.
Sandro Zilli - Innovation Manager, Resp. Aidr Observatory for Innovation and Digital Growth