September 2019 – Alan Bird
A recent article in Harvard Business Review (HBR); “Digital Transformation Is Not About Technology” sums up in a very practical sense, how important it is to work out your business strategy first before diving head long into digital and technology.
In our current era, many executives feel the pressure to start ‘rolling out’ digital projects to keep up with the competition. And to at least appear to be ‘on top of their game’ around how digital channels will grow their business with significant return.
“A recent survey of directors, CEOs, and senior executives found that digital transformation risk is their #1 concern in 2019. Yet 70% of all DT initiatives do not reach their goals” (HBR 2019).
Organisations need to work out their actual core business strategy before rolling out new digital and technology. Although having a plan on how to connect with clients via new digital channels is important, all initiatives need to map back to the broader business strategy.
Digital and technology is crucial to get right, however they are still functions of the overall business that need to be a part of and contribute to the broader plan.
We’ve seen organisations forge ahead with digital and technology strategies that are independent to what the rest of the organisation is doing. Stories are now starting to accumulate of the ‘skunk work’ digital hubs launched in organisations that are kept secret and separate to the core business. They have often resulted in diluting some of the larger existing channels of the business while not delivering sustainable value and stickiness with clients in the long term.
Technology and digital exist to support the broader business. Not the other way around.
A significant challenge front of mind for nearly every organisation is how they can close the gap between organisation wide strategy and technology. Too often, digital and technology drives people and process. Rather than people and process defining what technology will enable their strategy. We see many organisations trying to define a digital strategy that is not intrinsically linked and driven by the organisation wide strategy. This has often created projects that end up being orphaned, deliver no return and can cost the organisation to boot.
Strategy needs to be defined from outside looking in. Not the other way around. We see overall strategic business plans that have not been developed starting from the customer and market direction, rather what internal leadership ‘thinks’ is the best way forward. And this is often magnified and exasperated through technology.
With good intention, significant investment can been made on digital and technology projects that have not been really tested against what value and outcomes they will actually deliver to the business and its customers.
Foundstone help our clients to look at technology first through the lens of end customer value and overall business strategy. The strategic plan for the organisation is defined with direct consideration and input from the technology function. Foundstone assist’s business’s to bridge the gap between real customer problems; business strategy; and implementation. The gap is bridged. A clear line between customer problem, strategy and effective technology implementation is established.
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