Businesses Must Take a Balanced Approach to Digital Transformation. Here’s How.
There’s a well-established formula for digital transformation: technology plus people plus process.
On the ground, most organisations focus too much or exclusively on the ‘technology’ aspect. But as technology becomes increasingly commoditised Australian businesses need to rebalance their focus to bring people and process transformation to the fore.
There is evidence that this shift is already underway. ANZ Banking Group, one of the largest enterprises in Australia, recently announced the rollout of Atlassian’s agile development and collaboration tools. Of note is that the agreement also includes substantial work around how ANZ can create a more innovative culture.
National Australia Bank, similarly, is transitioning to a software-defined IT infrastructure but recognise publicly that tech is only one part of a wider transformation that includes “people, processes and foundational technology”.
Digitalisation Means Disrupt Or Be Disrupted
The traditional organisation — a network of human resources and capabilities to pull in the same direction — is disappearing. In its place are rising digital-centric customer views and journeys that has fundamentally changed how people interact with organisations and vice versa.
The consequence? Organisations need to change radically to a digital-centric business model if they are to stay competitive. But Australia’s biggest companies are struggling to keep up with the pace of change and are looking elsewhere for new ideas and tips on raising the culture bar to attract talent. Some are developing their own innovation hubs, others are bringing in consultancies and the rest are turning to startup land. Whatever the means, Australian organisations are recognising they need to reinvent themselves to be the disruptors, rather than the disrupted.
What Does Real Business Transformation Look Like?
In their attempts to disrupt their industries, many organisations take the approach of updating part of their tech stack in isolation. Typically, addressing people and process concerns is a rather nebulous and tricky affair, so leaders reach for the lever of technology, hoping that people and processes will somehow magically follow suit. Not so. Technology is not a silver bullet.
Similarly, the traditional approach of outsourcing technology to legacy system integrators — with their two-year project plans — is poorly suited to the modern pace of working and technological change.
So what does real business transformation look like?
Business must change their transformation approach to ensure IT can become a true partner by prioritising the people model as the enabler. Organisations need to focus on a culture of learning and continuous improvement with people at the centre, through shorter cycles, to drive true transformation.
When we help some of Australia’s largest enterprises to modernise how they work and how they go to market, we not only look at their software and technology platforms, but also their internal processes and culture. We show how these can be leaner, more vibrant, entrepreneurial and, most importantly. sustainable to meet the needs of speed, scale and quality.
Getting Buy-In For Transformation
Small lighthouse projects can act as beacons for the power of true transformation without risking too many resources. For example, if you can deliver small, tangible benefits for the business in eight weeks instead of eight months, these wins can multiply over time to slowly sow the seeds of genuine transformation. Watch as your teams grow in competency, confidence and autonomy when empowered to deliver meaningful change.
Instead of focusing on delivering tangible value, organisations are risk-averse and focus on efficiency and cost instead of agility and value. For example, look at enterprise workforces. They all lack the skills required to deliver transformational change because that simply hasn’t been a priority.
As a result, time-to-market is slow. Our recent report on the state of digital transformation in Australia outlines that 89 per cent of companies will take more than three months to bring any new product to market, whether it be via traditional or digital means.
The Multi-Disciplined Approach
Genuine transformation relies on a fundamentally different, multi-disciplinary approach. Instead of building out massive siloed teams, focus instead on creating a smaller pool of diverse, highly-skilled individuals organised in Spotify-style squads and tribes. These squads are “blended”—comprised of members from across all business areas (e.g. dev, ops, HR, marketing, etc.) so that expertise can be combined, encouraging the cross-pollination of ideas, entrepreneurial thinking and problem solving. Squads also mean that business goals remain front-of-mind, rather than only technical objectives.
Transformation can’t be achieved overnight. Companies that rush to digitally transform—without a well-balanced, iterative learning approach across technology, go to market and ways of working through its people—will fail, en masse.
