Five questions to find out if your company is ready for a digital transformation
Digital transformation impacts all aspects of an organization, from leadership and strategy to marketing, innovation, finance, operations and IT. In the digital age, employees with skills in digital business and strategy execution is essential. Does your organization have what it takes to build a digital business model?
In June, the International Data Corporation (IDC) announced that worldwide spending on digital transformation efforts will exceed US$1.1 trillion, a 16.8 per cent increase in spending over 2017. Yet, despite increased spending, the majority of digital transformation efforts fail.
“It’s clear that companies are struggling to redesign their business models to compete in the digital age,” explains Kathryn Brohman, Associate Professor and Distinguished Faculty Fellow in Information Systems at Smith School of Business. “Core management concepts in economics, strategy, marketing, technology, Human Resources are being challenged.”
Recognizing the need for managers who can understand the interplay between traditional and digital business models — Smith has embedded an Intro to Digital Business course into the MBA program’s core curriculum, and has just announced a new specialization in Digital Transformation, which will be available for student’s in the full-time MBA program starting January 2019.
“Digital capabilities need to be embedded in every organization. Every general manager needs to know this stuff, it will come from there, not the top,” Brohman explains. “While consultants can be helpful in this area, the expertise and knowledge really has to be implanted within the business itself.”
Following the launch of the new specialization, Smith also plans to roll-out an executive program series focused on digital business, which will serve as a refresher for senior leaders. “For anyone over 50, it can be quite hard to integrate these changes into the way we’ve always thought about business,” Brohman says. “But companies that want to remain competitive are going to have to find ways to make digital work for them.”
If you’re wondering if your organization is prepared to undergo a digital transformation, Brohman suggests considering these five questions:
1. What am I doing to help my customers?
This first question, she explains, is around design thinking, which is the ability to understand and empathize with customers and employees, and give them something they’re going to like more than what already exists. Companies like Airbnb and Uber were able to do just that: understanding that end-users wanted somewhere to stay and a way to get from point A to point B, and then re-thinking and re-designing traditional methods of delivering those solutions. “The key is to understand what your customers truly value and what problems you can solve for them, before they realize it’s even a problem,” says Brohman.
2. Are there competitors in my industry that are re-writing the rules of competition?
True digital strategy involves moving away from the play-to-win model towards a more sustainable view of competition that Brohman calls value co-creation. “Uber again is a good example of this,” she says, “Leveraging people’s existing resources (cars), moving away from the need for companies to own their own resources, and allowing competitors to work together as partners.”
3. Is my organization being innovative in how to do more with less?
In the digital age, money is no longer the only currency, and how/what people will pay for is changing, Brohman explains. “The digital business model will look at how to do more with less, leveraging resources that already exist — crowdsourcing, cars and drivers, people’s second properties that are sitting idle, family care providers, social media — creating flexibility in the way work is getting done, and creating alternate forms of currency, such as data, information, and relationships.”
4. Are the barriers to digital transformation in my organization surmountable?
“No longer can leaders sit at the top and dictate down within an organization,” says Brohman. Power is a current or charge that moves through an organization, and leaders must be prepared for that change in power dynamics. ‘The digital age enables student learning through YouTube videos, targeted fundraising through ‘Go Fund Me’ campaigns, and online script marketplaces such as the Blacklist recovering bypassed movie scripts to produce Oscar winning films,” says Brohman. “Part of what we teach is how to break down traditional barriers and execution in a digital world.”
5. Does my organization have the technical and analytical capabilities and resources they need to transform?
“Trying to go digital without modernized IT practices is like trying to build a house without power tools,” Brohman says. “Modern IT practice requires an understanding of digital technologies such as big data, artificial intelligence, and blockchain as well as a transformation in the way IT supports the business such as edge computing and agile project management.”
Ensure you have the digital skills to help your organization transform its strategy. Check out the new digital transformation stream offered by Queen’s MBA – the first in Canada.