People, process and technology: the great triumvirate of digital transformation.
When companies approach digital transformation, many of them begin with technology. It stands to reason: digital is bound by tools, websites, apps, the cloud. It’s what defines modern goods and services.
It’s also the easiest to address. You’ve got a current system or set of vendors; finding more modern, efficient, cost-effective, or smaller number of vendors is a measurable outcome.
The problem with this approach is that it’s bound by short-term thinking. Sure, the board or the sponsoring executive can see results and report those results to shareholders in mere quarters, but it’s likely that next year’s vendor pitches will demonstrate that they can unseat the winning vendors in this year’s transformation.
So what’s an organization to do?
The first thing is to stop thinking of digital transformation as an I.T.-led process. We’re putting the accent on digital when it needs to be on transformation. And what is transformation, but a change in composition, structure, or condition?
The portion of the triumvirate that is technology in some ways is a superficial layer — not that technology doesn’t run in deep and complex ways through the organization — but that it’s the final expression of what is being transformed and how it will work. The what and the how of transformation are the process and technology. And we can see that processes and technology can be swapped out and changed over time.
In transformation exercises, of course we need to consider what and how, but before that, we must first ask why. The why gets to the vision for change: what’s driving it? What do we hope to achieve? What is the goal? How does it map to our larger business strategy? The driver behind why is corporate culture.
If you’re going into digital transformation with a tech-first approach, then you’re missing the true purpose of it: to make fundamental strategic changes that affect customers and employees. These kinds of tectonic shifts require more than window dressing and short-term thinking; they require cultural readiness or culture change.
By ignoring culture, an organization risks transformation failure. According to Boston Consulting Group, out of 40 digital transformations, the proportion of companies that reported breakthrough or strong financial performance was five times greater (90%) among those that focused on culture than it was among those that neglected culture (17%).
Longer-term, culture means success. It means stronger performing teams and aligned vision. A digital culture will make it easier for employees to deliver results faster, and in turn will demonstrate those tangible results back to employees, creating a feedback loop of progress.
Leaders should focus today on making strides toward a digital-first culture that makes digital transformation part of its ongoing thinking, not a one-off process that’s focused on technology. People are at the core of culture, and should be the first thing leaders consider in the people, process and technology of digital transformation.
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