Navigating Digital Transformation
Exploring A Framework for Digital Navigation
How does your company use technology to create value in uncertain times? This question is echoing through the chambers of boardrooms and backrooms. The market moves much faster than companies can transform, but projects that are quick and easy to execute don’t create the step-change improvements needed to generate significant value.
With this in mind, D/SRUPTION asked Jeff Kavanaugh, senior partner at Infosys to offer his take on these issues…
In hundreds of client discussions over the last year, we asked leaders how they are facing the headwinds of the disruptive digital age, and how they plan to succeed in the teeth of those winds. Overwhelmingly, they tell us that they are familiar with the alphabet soup of buzzwords and technologies, and that they have launched plenty of initiatives. Their sticking point comes in combining effective business operation with real change.
Our research tells us that only 22 percent of companies that implement programs have real transformation in mind. We describe these companies as visionaries. Another 50 percent of companies, known as explorers, are pursuing operational efficiency through digital technology. The remaining 28 percent are yet to take significant steps toward engaging digitally. We classify them as watchers.
Visionary companies vs the rest of the pack
What separates the visionary companies targeting bigger and more holistic transformation outcomes from the rest of the pack? How do companies focusing on efficiency and experience – the explorers – also navigate toward a more evolved transformation model?
Again, our research tells us that the watchers are making an effort to improve their digital capabilities. The difference is that their efforts manifest as a series of pilots, not programs at scale. It’s a formula familiar to every corporate leader: Create an innovation lab, run experiments, show tactical results, and declare victory.
The watchers, meanwhile, are taking a cautious attitude. This may appear safe but it overlooks the two fundamental benefits of decisive action—learning and time. Each action is an opportunity to learn, and the real learning happens as programs are taken to production. In the age of digital, the cost of delay is non-linear and a fundamental risk to success. Our research has revealed that a few mistakes along the way are more than compensated by knowledge gained, cultural adoption, and progress to scale.
The problem facing incumbents is that they have existing legacy operations, with ongoing revenue streams and supply chains. They are not starting with a blank canvas. Their goal is to turn their already successful businesses into successful physical-plus-digital businesses. If they make changes, they risk disruption. This risk keeps the watchers in wait-and-see mode, while even the explorers are deterred from taking bolder steps to transform business and operating models.
We see these concerns again and again. Leaders want to embrace digital. When they do so on a small scale, they see some success. But they are unsure how to take the next steps toward digitising their core operations and amplifying experiences at scale.
The list of digital capabilities and technologies itself can be confusing. We have categorised them into five distinct outcomes: experience, insight, innovation, acceleration, and assurance.
Experience is self-explanatory. It includes customer, employee, and partner experiences.
Insight covers data and analytics, along with artificial intelligence.
Innovation comprises both product innovation and the Internet of Things.
Acceleration is about digitising the core of a business and modernising legacy applications, for example through automation.
Assurance is about cybersecurity and compliance.
Our research shows that nearly all companies have made a start in these areas, but their levels of progress and adoption vary widely. For some capabilities, such as artificial intelligence, maturity levels also vary widely across visionaries, explorers, and watchers.
As valuable as classification is, leaders tell us that it is the journey that keeps them up at night. What should they focus on to accelerate digital progress? This question has become the genesis of a new way of looking at digital transformation—
The Digital Navigation Framework
A remedy for this inertia is the Digital Navigation Framework. We’ve named it purposefully: The navigation metaphor represents the fact that digital transformation is indeed a journey, which requires more than a cookie-cutter plan to execute successfully. Similarly, we call this model a framework because clients emphasise to us that there is no one color-by-numbers approach to digital transformation. Instead, they tell us, they need relevant tools—patterns, management practices, and sequences— to address their unique situation.
Consisting of five accelerators (learning, automation, Agile, proximity, design), leading to five outcomes (insight, innovation, acceleration, assurance, experience). We’ll discuss these accelerators briefly:
In a physical plus digital world, design matters more than ever. Many companies already excel in the realms of product and experience design, but must improve their systems design capabilities.
Our research tells us clearly that people value learning. Yet, there’s a disconnect between the desire to learn and people’s ability to learn at their own pace, using a distribution method that works for them. Companies should seek to facilitate more learning, faster, through channels that people find easy to use.
Leaders understand that automation is a key component of digital. Right now, however, most large companies are in the early phases of integrating automation into their operations. We see many leaders mistakenly grasping for the promise of AI, discounting the less glamorous but highly valuable benefits of robotic process automation (RPA). RPA forms a foundation upon which AI can demonstrate its true potential, and should be a focus for organizations seeking to build their AI proficiency.
While Agile has become a buzzword in recent years, it undoubtedly offers real benefits. Clients see strong localized results from individual Agile projects. However, enterprises struggle to translate these results to scale, with dozens of Agile project teams working together on major programs. The very definition of a program must change, so that it becomes a coordinated set of sprints linked by a strong development operations capability. A DevOps platform of practices and tools can allow a continuous stream of incremental outputs, led by product owners, not project managers.
In real estate, everyone understands the importance of location, location, location. In a project delivery context, the value of proximity is often underestimated. Companies should understand that regional hubs are a necessary complement to local work and low-cost delivery centers, offering specialized expertise and time zone-friendly collaboration.
Used individually, each of these five accelerators can move the needle for an organization. When two or more are used together, they become a catalyst for change.
A major European auto manufacturer, for example, used proximity, design, and Agile to achieve success on their connected vehicles programs. They used design thinking to create the desired experiences, Agile paired-programming to accelerate two-day sprints, and a careful mix of work locations to access deep expertise, while retaining some of the cost advantages of outsourcing. As a result, they turned around a stalled program, boosting results while halving their time investment and using only a quarter of the resources.
In an uncertain world, the Digital Navigation Framework has emerged as a useful tool to guide digital transformation journeys. Leading companies are using this concept to achieve their strategic goals and complement their tactical tools. Miguel de Cervantes once said that “the journey is the better than the inn.” In the continually evolving world of digital transformation, this may be a prescient insight. The Digital Navigation Framework can make that journey more pleasant and more productive.
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