Going digital: Four critical steps companies need to take
Digital disruption is already here. But many businesses are still reluctant to embrace it for a variety of reasons such as lack of courage, aversion to innovation, dearth of change-hungry leadership, etc. Meanwhile, many others have taken the advantage of being there first to adapt to the norm of the future.
Technology, media and retail industries have already paid heed to the disruptive change while manufacturing, transportation, energy, health care, and construction are still studying whether it is a choice to make.
“Digital technologies and approaches aren’t just for tech, media, and retailers anymore—they are infusing all aspects of the business world,” says Lars Fæste, a senior partner at The Boston Consulting Group (BCG).
“Through artificial intelligence, advanced data analytics, and 3D printing, to name just a few emerging digital innovations, companies in many industries can do great things for customers and create new levels of value.”
Jim Hemerling, senior partner at BCG, warns those industries whose frame of reference is an enterprise-resource-planning migration that takes five years from start to finish, may sit on digital transformation for long, and risks wasting immense amounts of time and money.
Four critical steps
Fæste and Hemerling advise companies to act now to launch digital products and services and to digitize internal processes, even if they don’t feel ready.
“Savvy companies get comfortable making decisions amid uncertainty. They launch projects even when they don’t know what the outcome is going to be,” says Fæste.
“They embrace the concept of ‘fail fast and fail cheap,’ focusing on quick pilot tests and prototypes that they can roll out and evaluate quickly and then scale up or shut down.”
BCG’s new e-book Transformation: Delivering and Sustaining Breakthrough Performance lists four steps companies that succeed with this trial-and-error approach to digital transformation take:
1. Educate themselves and establish a baseline on their current use of digital technologies.
2. Create quick-and-dirty plans—lots of them—for technology projects. This isn’t and shouldn’t be a long, drawn-out effort. Successful companies move quickly to create project “portfolios” focused on just a few key areas where technology can make a difference: customer experience; reimagined products, services, and business models; and reengineered business processes.
3. Get agile to accelerate the transformation. Successful digital transformers launch multiple pilot projects at once. The goal isn’t perfection but a “good enough” product, with just enough features to make it functional. Apps are often basic at launch. New features are added over time depending on what customers want.
4. Transform the organization. They add capabilities, sometimes with the help of an ecosystem of partners, or they create external incubators through joint ventures or acquisitions.