The mantra of the digital revolution is well-worn: It’s time to get moving or risk extinction. But move where? Move how? If you act out of fear and merely follow another company’s lead, you will make bad decisions.
But if you understand the new opportunities and models for value creation—and the technologies required to implement them—you can develop a clear path to success. With that in mind, here are the top 3 things CEOs need to think about to achieve a successful digital transformation.
1. Redefine your company, industry, products and customers. A digital transformation begins with a fundamental shift in mindset. If you believe that what made you successful in the past—your culture, organizational structure, hiring practices, relationships with customers, etc.—will fuel the next decade, you already are at a disadvantage. You must embrace change and risk. Can you lead the disruption in your industry instead of waiting for a startup to do it? Can you develop long-term customer relationships instead of simply selling things? Can you figure out how to use the information you collect—or could collect—as a strategic asset?
GE’s CEO Jeff Immelt is driving a complete digital transformation of a 125-year-old industrial giant, aspiring to become a $15 billion software company by 2020. The culture change is profound, and every employee is playing a role. Commonwealth Bank of Australia (CBA) is embracing digital disruption and the non-traditional threats it faces in a different way, acquiring new fintech companies to help drive innovation. If these businesses can embrace radical change, so can yours.
2. Create a partnership between IT and the business. For companies to truly drive enterprise-wide digital transformation, those responsible for business innovation and those managing and governing IT infrastructure need to work in close partnership, with each fully understanding the mindset of the other. The CIO must enhance the elasticity and agility of the technology infrastructure with the specific goal of enabling faster delivery of business innovation, while business leaders must constantly think about how to leverage the evolving infrastructure to deliver greater value to customers. Only when these groups work closely together can a company expose brilliant new digital services to potentially millions of customers, while ensuring an optimal experience and sound IT governance and compliance.
3. Make IT a competitive weapon. Historically, IT’s role was to support the day-to-day operations of the business and implement new technologies to increase productivity, security and compliance. Today, IT—particularly infrastructure—is the company’s primary competitive weapon for unlocking the potential to innovate and grow. Perhaps it’s a bank creating a digital marketplace to enable customer self-service for the entire automobile loan and purchase lifecycle. Perhaps it’s a tire manufacturer installing sensors that can record and capture driving patterns, providing useful information to auto insurance providers to help them determine rates based on driver safety and proficiency. Perhaps it’s a healthcare provider enabling digital healthcare services, such as online access to physicians and prescription renewals, to reduce patient visits to the hospital. Whatever the innovation, IT must be seen as a core strategic enabler, not a cost center.
The digital revolution isn’t stopping for anyone, so you have only two choices. You can resist change until panic sets in, or you can start planning your complete digital transformation today.