Seven Steps to Digital Transformation

7 months ago . 5 min read
Seven Steps to Digital Transformation
Photo by Markus Spiske from Pexels

By Patricia Yim

Now that the Covid-19 pandemic has taken center-stage, everything else seems to have been put on the backburner, including many companies who had just begun their digital transformation (DX) journey. That’s a concern because it is right now, right in the midst of the pandemic, that companies need to digitalize their operations, cloud-enable their applications, and continue their digital transformation.

DX is a loose term that means applying digital tools and technologies to impact all aspects of the business or the enterprise. Right from the supply chain (maybe using IoT and RFID) to customer contact (with social media, and ecommerce), to marketing and sales (using big data analytics and AI tools). Gartner defines digital business transformation is the process of exploiting digital technologies and supporting capabilities to create a robust new digital business model.

This is especially required in ASEAN because cross-border trade, commerce, and collaboration have been in place much before the current pandemic. The 10 members of ASEAN – Malaysia, Singapore, Indonesia, Thailand, Brunei, Vietnam, Cambodia, Laos, Myanmar, and the Philippines – have a combined population of 661 million and $9.7 trillion purchasing power parity. While the GDP per capita varies widely between member countries, the pandemic will hit ASEAN hard.

The good news: According to the 2020 TechTarget/Computer Weekly IT Priorities survey, 44% of nearly 200 respondents in ASEAN cited DX as their top priority, followed by infrastructure modernization (41%) and cybersecurity (36%). The priorities are not surprising, given that more enterprises are coming under pressure to remain competitive in the face of digital disruption across industries, such as financial services, logistics, and telecommunications.

The concern? “The growth in overall IT spending appears to be softening, probably over concerns about the slowing global economy,” notes Aaron Tan, executive editor of TechTarget. “In 2019, 80% of respondents expected a bigger IT budget, while just 61% expect to spend more this year.”

The Covid-19 recovery will be digital, says a recent McKinsey study. “Indeed, recent data show that we have vaulted five years forward in consumer and business digital adoption in a matter of around eight weeks. Banks have transitioned to remote sales and service teams and launched digital outreach to customers to make flexible payment arrangements for loans and mortgages. Grocery stores have shifted to online ordering and delivery as their primary business. Schools in many locales have pivoted to 100% online learning and digital classrooms. Doctors have begun delivering telemedicine, aided by more flexible regulation. Manufacturers are actively developing plans for “lights out” factories and supply chains. The list goes on,” the McKinsey whitepaper notes.

How should companies plan to begin and stay on their digital transformation path? What can ASEAN enterprises do to accelerate their DX journey? Here are seven key steps that companies can take to transform their businesses – both internally with operations, and externally with stakeholders:

1. Identify core business platforms and scale: Create business platforms and work on 3S- Scale, Speed, and Scale. Businesses have to bring a competitive edge to their core platforms and strive to be the best in the chosen areas by applying the right strategy. The business platform must be highly architected, have highly interoperable system components and infrastructure built using the cloud, AI, and other exponential technologies.

2. Use data analytics to your advantage: Find strength in numbers and leverage insights from data. Companies should exploit the data they gather from multiple channels and link all of it to understand their customer and fulfill expectations even before these are expressed. Few companies that have transformed into Cognitive Enterprises ‘listen’ to their customers and apply AI-based tools to make sense of the data and use it for personalized messaging to customers.

3. Architect your business for change: A Cognitive Enterprise conceptualizes a blueprint to define its structure and operations. Thereby, organizations should focus on planned growth and align themselves with emerging technology architecture. Companies can no longer afford to take a wait-and-see approach to determine what works for others in their industry, or which technology or service is going to “win.” Enterprise architecture – like business strategy – must anticipate the future but also have its options open.

4. Humanized workflows around AI: Companies are re-orienting themselves and relying on AI and exponential technologies to direct their actions. At the same time, they are providing humanized experiences to customers. Leading organizations deploy AI to augment employee decisions, help them interpret what customers want, and interact with customers in ways that build trust. Decisions are supported at the edge, whether that’s a salesperson on a shop floor or a customer service rep in a call center.

5. Agility and adapting fast: Cognitive Enterprises should discover and evolve new strategies. They should be able to think and deliver quickly. Organizations must be open to learning and have the courage to change direction on the basis of what they learn. Business platforms, which support well-integrated and cognitively enabled workflows, are in turn becoming the ideal habitat for agile leaders and teams.

6. Ignite talent: It can be difficult for companies to find a skilled workforce that can work on cognitive technologies as every company is looking for professionals from a limited talent pool. Under such circumstances, companies should apply AI tools to their HR workflows and gain insights into what skills they really need now and in the future, to determine how the demand can be met. Companies can also use AI tools to identify talent within the organization and enable peer-to-peer learning.

7. Trust and security: These two parameters are critical to a Cognitive Enterprise. On business platforms, especially those that interoperate with other platforms, a concrete way to earn the trust of customers and continue to earn the right to access, store and utilize their personal data is to reduce the vulnerability of single players across the ecosystem, which can happen by leveraging AI and machine learning capabilities. To stay ahead of malicious actors equipped with advanced technologies, it is important to develop and leverage a robust security toolkit. This includes conducting rapid and continuous testing with working code implementations informed by up-to-date data on recent attacks and defenses.

The key is to implement the seven steps into all business models to ensure DX can occur across the enterprise. The DX journey involves the entire organization becoming nimble, agile, and capable of taking advantage of digital tools and technologies to optimize the supply chain, or offer customer quicker deliveries, or enable stakeholders to quickly connect with your organization.

Patricia Yim is General Manager of IBM ASEAN.

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