sao0022 digital white paper a4 v2 ƒ - datacom · 2016-04-25 · our accelerating, digital business...

DATACOM INTELLIGENCE

WHITE PAPERIssued: October 20th 2013

Datacom Group Limited | All content © Datacom 2013 | Available for release on request

#1W H I T E PA P E R

DATACO M I N T E L L I G E N C E

ISSUED April 2016

Digital Transformation:Keys to success

2 www.datacom.co.nz | www.datacom.com.au

Datacom White Paper | D i g i t a l T r a n s f o r m a t i o n

BY BRETT ROBERTS, ASSOCIATE DIRECTOR – DIGITAL, CUSTOMERS AND COLLABORATION GROUP, DATACOM

The digital transformation of today’s organisations is akin to their predecessors factoring electricity into formerly steam-driven processes and business strategies 100 years ago. It requires new ways of thinking about how organisations, industries and markets operate, or could operate, in a world where technology-based change is disruptive, constant and accelerating.

To give you something of a definition, digital transformation involves using digital technologies – such as the web, cloud, mobile, social media, the Internet of Things and analytics-driven personalisation – to re-shape and improve customer interactions, business models and financial returns. An important focus area is the provision and ongoing enhancement of customer experiences that are multi-channel, data-driven and digitally-enabled. Ideally, it allows organisations to embrace and exploit the exponential rate of technological change for the benefit of themselves and their customers. This often entails a shift in organisational ‘rhythm’ away from a steady, sustained marathon-like jog towards something that more closely resembles orienteering.

The rapid rise of Amazon, Facebook and the digital darlings of the sharing economy, such as Uber and AirBnB, are a few examples amongst many, across all industries, which underline the opportunity here – and the competitive threat facing organisations that do not deliberately self-disrupt and re-invent.

You could well be thinking that digital transformation is something your organisation should do now, or should at least start thinking about before it’s too late. But, if conversations we’re having with business and technology leaders are anything to go by, you may find it all seems so all-encompassing, fundamental and just plain hard that you don’t know where, or how, to start.

This paper is guidance for you from a technology company with 50 years of experience in focusing on what really matters to its customers, and helping organisations of all shapes and sizes make smart technological decisions and implement the business innovations that work best for them.

Put your people first In a sense, the Datacom Digital, Customers and Collaboration team is at the sharp end of digital transformation. Put simply, we exist to enable digital business: everything from web design and build, mobile innovation and app development to implementing data analytics, business intelligence, Customer Relationship Management and collaboration technologies, such as Microsoft SharePoint. In summary, we connect our customers with their customers, people and data using a wide variety of people-oriented technologies and platforms.

As you would expect, as a technology partner and service provider we help customers with technology design, build, deployment and management, and deliver related big picture strategic advice and consultancy. We understand the critical roles these all play, but a major part of what we do is help organisations to operationalise digital innovation – i.e. making transformation ‘stick’ – and, time and time again, we’ve found that the single most important factor for long-term success is the people within the organisation. They operationalise the new technologies and processes; the enhanced customer experience. It is they who need to adopt, embody and express the new mindset that accepts and embraces the new world of constant, or at least hastened, change.

So, if there’s one thing you come away with from this article, we hope it’s the understanding that wherever you start on your digital transformation you should focus on your people first and foremost. Implications of this approach and advice on how to go about it are outlined below across four key areas – leadership, recruitment, change management and culture. It should also be noted that risk management is another important topic for consideration. This will be the focus of a future paper.

For successful digital transformation, focus first on your people


Datacom White Paper | D i g i t a l T rans fo rmat ion

Who will be the agents of change in your digital transformation? Senior management will need to play a key role, of course, the extent to which is summed up in the following quotes.

The MIT Sloan Management Review report last year states that: “Although leaders don’t need to be technology wizards, they must understand what can be accomplished at the intersection of business and technology. They should also be prepared to lead the way in conceptualizing how technology can transform the business.”

Digital business researcher, Jane McConnell, says in her 2015 report, The Organization in the Digital Age, that: “The digital workplace tipping point comes when well over half of senior management understand the value of the digital workplace, participate and demonstrate sustained commitment.” That is, at least half of your senior management team has to understand the need – the risks and opportunities at stake – accept them, and work to gain broad buy-in across the business. Make no mistake: this isn’t easy. As outlined above, the glimmerings of a new mindset is necessary to begin conceptualising how things could change for the better via digitisation.

That’s one of the reasons behind the recent rise of the role of Chief Digital Offi cer (CDO). This person is often a key driver of digitisation projects and the ongoing leveraging of their potential. They can ‘talk tech’ and understand business. They bridge the chasm that too often exists between people’s knowledge and understanding of business and technology, and employees and customers. They help lead their organisation through the initial digital transformation process and foster and embed a digital mindset that will exploit change and new opportunities like never before.

But they can only ever be part of the process. As McConnell’s report shows, other senior managers need to share the load. Indeed, the function of the CDO can be shared across, and delivered in part by, others, including the CIO and CMO. The functions of both of their departments are shifting in a digital direction as a result of technological advances.

In IT, for instance, thanks to cloud and other empowering, automating technologies, the focus is becoming more about strategy, management and infl uencing the organisation and less about ‘keeping the lights on’. In some organisations, we’ve seen CIOs competing as service providers with external parties. They accept a certain loss of control to become enablers and collaborators rather than strict command-and-controllers. For CMOs, the need for multichannel engagement with the digital customer, combined with the potential of data analytics and other technology to market better, means they have a ‘vested dependence’ on digital transformation-related projects.

However, even CDOs, CIOs and other senior managers working in unison can’t bring about digital transformation on their own. Other change agents are necessary to operationalise the extensive changes required. To determine who those people might be, look to the hybrid skills of the CDO, spanning technology and business.

1. Leadership



Hiring the best candidates is a perpetual challenge, full of risk and opportunity. If you take the best, then your competition is left with the rest – and vice versa. But in the new digital world, the best people may not be who you are looking for or who you already have on board.

Lean Startup author, Eric Ries, said: “The modern rule of competition is whoever learns fastest, wins.” In other words, you need to recruit smart people who you can teach to do anything, and who can thrive amid disruption. You need people with varied, hybrid abilities. You might think this means hiring a cohort of digitally-minded Millennials, but digital skills can be taught. What you are after is rarer: attitude on top of aptitude – which can exist in people of all ages.

For example, the Datacom Digital team regularly interviews candidates for senior developer roles. We look for technical proficiency, of course, but favour people with the ability to have an engaging conversation with a customer about their business issues over those who are more technically skilled but unable to talk outside their domain.

In general, we look for a broader mix of skills within the ideal candidate, and a growth mindset. This means they are mentally flexible, a fast learner, comfortable with uncertainty, accepting of the need to take risks and experiment – and fail sometimes – in order to succeed and grow. They are able to stand up for themselves, but recognise, and run, with better ideas. They collaborate and communicate well, and have empathy for their customers, colleagues, partners and suppliers.

They can sit in a room with a customer and others for a week and work with them to design, build and test a prototype application that the customer takes to their Board and gets approval to fully implement. In our accelerating, digital business world, this kind of rapid ideation and prototyping activity is becoming commonplace, even core business for many organisations – and applicable to all manner of product or service innovation – making the diverse attributes described above more mission-critical every day. It’s how the Datacom Digital team works, on many projects.

There is an interesting macro trend at play here – a contradiction: the more digital businesses become, the less they need people with traditional IT skills. As the example above shows, there are plenty of roles for highly technical people in specialist firms like Datacom. But as business (and consumer) technology becomes easier to use, more automated, provided as-a-Service, and so on, the need for deep technical knowledge and skills within other types of businesses recedes. If these skills and services are required, then organisations can call on the specialists.

Conversely, the need for people who can leverage new digital technology to learn faster, work more productively, be more creative, and come up with new innovations and solutions and run with them, is exploding. And if you bring in people with an expansive, flexible attitude and these skills, then you will help your organisation to foster a digital mindset and culture.

2. Recruitment



3. Change management

Bringing in new blood will almost certainly challenge your current leadership, colleagues and employees. So how do you bring those people already within your organisation on the digital transformation journey?

Change management, along with training and ongoing support, is required. Your people will need to adapt, and this can be very diffi cult for them. You may lose some of them along the way. There will be resistance, and you need to plan for that. We’ve seen this fi rst hand while working for customers on major IT projects that involve substantial changes to people and processes, alongside technology.

The way server engineers have had to adapt to major public cloud adoption within their organisations illustrates the issues. With public cloud operations, engineers don’t have direct access to infrastructure. Servers are monitored and manipulated using software. This means engineers need to move away from traditional, manual methods of monitoring and control to using scripts and coding to enable process automation and managing by exception. To do this, some of them may need to adopt a new mentality and learn new skills.

As these engineers steadily remove manual intervention and human error through automation, however, they can free themselves up to have control over more of their organisation’s estate – and better handle increasing complexity. They can also be more proactive and strategic, moving from ‘fi re-fi ghting’ towards an innovation and value-add mentality. For instance, they can get more involved in higher-value activities, such as capacity planning and service management and delivery.

There is often understandable resistance to these changes though. Some will not want to change or upskill, and may move elsewhere. Those who see the opportunity and decide to remain stand to gain from the IT horsepower being added to their dominion – if they can leverage it for themselves and their organisation – just as digitisation in general can empower others in the business. To do so, however, they will almost certainly need training and support.

The MIT Sloan Management Review report found that digitally mature organisations were four times more likely to invest in workforce skill building and education for digital business than their less mature counterparts. The former know the importance of proper change management and ongoing investment in building and maintaining a digital mindset and culture.

Underlining the importance of proper change management to recruitment and retention, the Deloitte Millennial Survey 2016 found that putting employees fi rst was the most important value businesses should follow to have long-term success. Millennials, now the largest generation of active workers in the global workforce, expect such from their employers.

According to the report, they: “…want businesses to focus more on people (employees, customers, and society), products, and purpose – and less on profi ts.” Change management is important with any major IT implementation of course, but with digital transformation the potential change is fundamental, permanent and, afterwards, ongoing. Things will never be the same again, and they won’t stay the same for long.

Whatever the project, Datacom helps organisations to devise and implement a change management programme that supports both the organisation and the individuals in it, helping them to accept, implement, and benefi t from systematic change. Key to this is determining the stakeholders at all levels that are essential to the changes required, and guiding, informing, empowering and incentivising them to plan, design, innovate and collaborate to pursue common goals.



4. Culture

There are also structural, procedural and, of course, technological ways you can foster this approach and these behaviours. But as management guru, Peter Drucker, once said: “Culture eats strategy for breakfast.”

This could have been the title of this paper. If you haven’t got the culture – the attitudes, behaviours and expectations – then even the smartest of strategies will fail. You need strategy and planning, of course, but the far harder job within a digital transformation project, and as this paper argues the most important thing to focus on, is the people involved. They collectively influence business culture every hour of every day.

Business leaders can set the tone and nature of the culture they want to foster, and indeed exemplify it with their commitment and actions. This is important for recruiting the type of talent needed to forward digital transformation.

The MIT Sloan Management Review research shows that: “Employees want to work for digital leaders...Employees across all age groups want to work for businesses that are deeply committed to digital progress. Company leaders need to bear this in mind in order to attract and retain the best talent.”

That doesn’t necessarily mean turning into a tech startup (although some organisations, like Datacom, foster risk taking, entrepreneurial activity and competitive collaboration by setting up internal groups that act like startups). But it does mean showing employees and candidates that you are at least dedicated to digital improvement and have the technology, support and opportunities available to help them develop in this way.

As this paper has shown, however, a top down, centralised approach won’t work on its own. Digital transformation sticks when a broad group of change agents at different levels and in different areas of the organisation are empowered with technology, resources, knowledge and support. That’s the best way to nurture a regenerating digital business culture built for orienteering rather than marathon running.



5. A matter of businesslife and death

Salim Ismail says in his book, Exponential Organisations: “Any company designed for success in the 20th century is doomed for failure in the 21st.” At Datacom, we’ve taken this and similar insights on board and decentralised control in some areas so that smaller, connected teams can work together and in competition on solutions for clients.

These entrepreneurial teams leverage different digital technologies to innovate faster, solve problems and correct their course earlier, and work more closely with customers. Their introduction has already given the business greater pace and agility, which means that we can help our customers faster and more effectively than ever.

Taking the digital transformation trend to the next level, Edward Hess, Professor & Batten Executive-in-Residence at Darden Graduate Business School, USA, said: “The company of the future is going to be staffed by some combination of smart robots, artificially intelligent smart machines, and humans. And the humans are going to be doing the things the technology can’t do well, which will be complex critical thinking, innovative thinking, and high emotional engagement with other humans.”

This scenario, although still some way off, is no longer just the stuff of science fiction; it’s a future that is inevitable for many organisations. Adapting to this brave new world, let along thriving in it, will be one of the top challenges for all of us over the next decade or two. It won’t be easy, but it’s clearly necessary, and the opportunities are enormous.

As this paper has shown, it will require among other things the adoption of a mindset and the nurturing of an organisational culture that emphasises and supports experimentation, collaboration and learning. This means putting your leaders, colleagues and employees first. Their actions and approach are central to the success of technology-driven organisational change, big or small.

If you'd like to find out more about how Datacom can assist with your digital transformation, please don't hesitate to contact us at [email protected].

References: • MIT Sloan Management Review (2015): http://sloanreview.mit.edu/projects/strategy-drives-digital-transformation/

• The Organization in the Digital Age (2015): http://www.organization-digital-age.com/

• The Lean Startup (2008): http://theleanstartup.com/

• The Deloitte Millennial Survey 2016: http://www2.deloitte.com/global/en/pages/about-deloitte/articles/millennialsurvey.html

• Exponential Organisations (2014): http://www.exponentialorgs.com/

mailto:[email protected]

sao0022 digital white paper a4 v2 ƒ - datacom · 2016-04-25 · our accelerating, digital business...

Documents