Time is ticking away. The digital pace is accelerating and many organizations are behind schedule with their digital agenda.
Their plan includes actions ranging from deploying ERP (is it digital?) to developing an army of bots that never enter the field.
What makes it so difficult?
Numerous businesses fail to identify the correct goals for producing value with homegrown or acquired digital assets, and this failure is mostly due to the lack of the appropriate leaders.
The issue with IT leading the game?
In most firms, information technology is a support role whose objective is to commoditize services and technology. Not having a customer-facing commitment, new ways of working (collaboration) and additional comparison criteria for expediting and streamlining transactions (controlling) have a lower priority than expenditure reduction.
As a result, CIOs and CTOs in charge of the digital agenda tend to take a cautious approach when backing projects that would ultimately benefit customers and result in a higher value for the organization.
Why customer-centric functions would fail then?
Digital transformation is revenue-centric. This is true, in the beginning.
The best way to start a digital journey is to sell existing or new products and services through digital channels, so it would seem logical to letting marketing or sales leaders lead the digital agenda.
This works well at the beginning as for a while the digital glittery will seduce both customers and internal stakeholders. In addition, it will leave the impression to be worth the money as the new digital revenue streams will be added on top.
Logical but not sufficient. Two main reasons:
- Sales or revenue leadership misses the operational aspects that are necessary to advance digital capabilities in the long run.
- With time, finite internal resource capabilities will limit the growth of the digital channel, sustaining the revenue growth will become harder and harder, and stakeholders’ sponsorship will fade away.
A digital transformation that works goes beyond the digitalization of the selling channels.
Adding value to new internal and external capabilities enables new ways of interacting within the ecosystem (clients, users, partners), and tailored support of business to generate revenue.
Identifying and including new value springs requires organization and change management to facilitate the speed and flexibility to follow the marketplace and imagine new customers’ needs.
In other words, if the external perspective prevails in guiding the digital agenda, the enterprise architecture would weaken and fail to support digital activities.
Who should lead the digital agenda?
The ideal candidate should have an internal operational purview with direct customer-centric responsibilities. She should also have enough domain expertise to understand and be sensitive to the operational hurdles. Last but not least, she should be gifted with true imagination to increase the odds of meeting potential, still undefined future needs by linking the internal and external perspectives together.
The main reason is that although new technologies are enablers, the digital turnaround happens only if a greater emphasis is on pursuing new income streams than cost reduction.
Efficiency and Effectiveness are attention-getting catalysts, they can generate early benefits, but they are not the value springs that would maintain the transformation.
Enabling internal and external collaboration, provoking a non-invasive control based on auditable standards, and designing new concepts is what makes digital a revolution, which demands more creativity than foresight.
The shift of a firm from conventional to digital in marketing, sales, and operations necessitates an organizational effort that goes far beyond technologies.
The digital pace will only get faster, so firms that rework their digital organizations with a very high cadence, are losing ground to competition and will not have many more shots.
Whatever is your worry (revenue, shares, costs), the time to get your digital transformation right is up.
The future digital success of enterprises will not just depend on the technologies they select now. It will not be measured by the level of efficiency they attain. This will depend on the capacity to anticipate future requirements. Only a genuine leadership can maintain this dynamic equilibrium between current and future needs.
Numerous competent IT and revenue leaders fail to establish a digital strategy. Obsessed with performance, they utilize the prior role’s acquired expertise as a compass, deviating from the objective of building value over time.
On the digital bandwagon, there is no first class. The digital transformation is a path of innovation that necessitates continual learning and development.
Digital leaders establish the optimal balance between enhancing technology and boosting revenue, anticipating the demands and expectations.
Original Source: ” Who should lead the digital agenda?”, Data Driven Investor, May 16, 2022