Management Perspectives

The rapidly evolving technology landscape is disrupting the competitive environment. For most, this means undergoing a digital transformation is no longer optional. Approximately 89 per cent of organisations1 are planning to adopt or have already adopted a digital business strategy. Yet shockingly, about 70 per cent of these programs fail to reach their goals2 . The implications are significant—from lost investments, frustrated stakeholders, unsatisfied customers, and lost ground to competitors—all of which can be fatal for a business. The root cause of failure can be attributed to organisational complexity. Organisations undergoing transformations often operate diverse business lines across various markets, manage aging and complex IT environments, and navigate significant regulatory oversight. Successfully delivering these transformations typically require a multi-year, multi-work stream program, demanding substantial and targeted efforts across numerous diverse business and functional teams that must collaborate effectively. Each of these teams have their own unique language and perspective, hindering communication and collaboration. Successfully navigating on such an ambitious program requires a transformation leader with superhuman capabilities to keep everyone focused on the transformation goals. To date, no holistic methodology has been created to solve this complex problem. However, following these five golden rules can significantly increase your chances of delivering on your transformational aspirations.

Rule 1: Make the journey business-centric

Advancements in the technology landscape have provided a catalyst in this digital age. A profound understanding of technical capabilities is needed, along with the associated opportunities and threats to your business. These technological shifts have significantly impacted business models, fostering the growth of E-commerce, platform business models, subscription models, and more. Additionally, advanced technical capabilities and enhanced data insights drive new strategies to boost customer engagement and loyalty. Both are crucial as loyal customers spend 67 per cent more3 than new ones. This underscores the importance of crafting a digital strategy through a business-centric lens. It begins with reassessing the organisation’s mission and envisioning a digitally enabled future. Consider the impact on business models—such as through new products, markets, and customer engagement approaches. This visionary process guides the definition of the strategy, outlining short-and long-term initiatives to fulfil these aspirations. Strategic initiatives typically revolve around two core aspects: the need for new processes and modifications, or impacts to existing processes. Executing the digital strategy depends on aligning the end-to-end approach with business processes as a shared language, fostering collaboration across diverse teams to efficiently turn the vision into reality. This enables a consistent business orientation throughout each step of the change journey— from defining initiatives to deploying changes.

Rule 2: Focus on empowering employees

To thrive in the digital age, organisations require a highly engaged, high performance workforce characterised by traits such as customer-centricity, seamless collaboration, commitment to continuous learning, and a strategic approach to risk-taking. This cultural shift fuels innovation across products, processes, customer experiences, and technology architecture—crucial for revenue growth and sustained competitive advantage. Artificial Intelligence (AI) is driving this shift by replacing humans in mundane and repetitive tasks and pushing the workforce toward higher cognitive activities that require critical thinking. Positive motivating factors that drive engagement are challenging work, achievement, recognition, and opportunities. To fulfil these motivating factors, it’s essential to precisely define accountability and ownership—not just for the transformation but also for the long-term operating model. Adopting a comprehensive Process Owner model, where all processes are clearly defined and points of collaboration with other areas are detailed, is considered a best practice. By defining ownership, eliminating hierarchical barriers, rewarding initiative, valuing openness, and providing tools, leadership empowers every employee to be innovation engines.

Rule 3: Drive organisational agility with operational excellence

Rapid technological advancements and other external changes driven by innovation in the market will continue to pose threats to competitive positioning. The implication is that digital transformations need to be viewed as a continuous journey as it’s challenging to predict these forces in the short and long term. To prepare for this journey organisations need to strive for organisation agility, which is the ability to quickly reconfigure strategy, structure, processes, people, and technology toward value-creating and value-protecting opportunities. Organisations face several inefficiencies, such as organisational silos, redundant IT systems, inflexible technical architectures, bureaucratic processes, and other impediments. These hinder agility as they make adapting to new opportunities time consuming and expensive. To enhance agility, organisations must drive towards operational excellence, focusing on resource efficiency and waste elimination. This extends beyond optimising core processes to scrutinising all resources and confirming that they’re aligned and optimised towards the organisation’s goals. A lean organisation can swiftly respond to changing circumstances. Transparency regarding processes, resource utilisation, performance data, and ownership are critical enablers. Establishing an operational intelligence platform serves as a single hub for centralising and integrating all operating knowledge and will arm staff to drive out inefficiencies.

Rule 4: Harness the value of data

The past decade has seen an astronomical 5,000 per cent surge in data growth4 , making effective data management a crucial imperative. Organisations recognising the competitive advantage of data can leverage it for valuable insights and informed decision-making. To succeed in digital transformation, prioritising customer-centricity is paramount. Organisations must maintain a 360-degree view of customer preferences and interactions, predicting behaviour to deliver on the engagement and experiences that customer demand. AI can be an engine for operational excellence, particularly through the concept of Digital Twin—an AI-driven virtual representation of the real world that analyses real-time data to gain insights into process performance. However, this relies on highquality data, characterised by consistent data labels across various input sources. Risk management is crucial, particularly given the surge in regulations like GDPR, CCPA, HIPAA, and others. Stringent compliance requirements necessitate careful measures for data handling and protection. To unleash the full potential of data, organisations require strong data management programs. A key starting point is understanding how data is used in processes and then designing governance accordingly. This ensures data serves as a valuable engine for digital transformation, meeting regulatory standards and maximising its role in creating organisational value.

Rule 5: Allow business processes to provide a common language

As much of the failure of digital transformations is due to organisational complexity and the challenges of getting diverse teams to focus on the goals of the transformation, overcoming this challenge requires a common language characterised by business orientation, cross-functional collaboration, and a nuanced understanding at both high and low levels of granularity. The ideal candidate for this is business processes. With a common language of business processes, the organisation envisions its digital future through a business lens, which enables a digital strategy that’s articulated by impacts to processes. Process enables collaboration across teams—including business, technology, risk, compliance, and people leaders—to effectively implement the future vision. Transformation leaders can efficiently manage the journey through accountability and transparency. To establish this approach, a comprehensive inventory of processes must be developed. Leveraging this inventory to align operational and resource information from various operational data sources becomes a unifying operational intelligence repository, which is key to driving alignment. This also means creating a process capability to build and maintain this information for long-term value. Implementing these five golden rules of digital transformation will require an investment and commitment from leadership, but that cost pales in comparison to a failed transformation.