If you are a President, CEO, COO or leader of the digital transformation at your high-tech company, this article is for you. In this day and age, it is all about disruption in the industry. Do you have the vision, fortitude and leadership abilities to continue to attack and catch the next wave of technology to help shape the business and allow it to grow and prosper? Or will you join other companies that did not see it and wind up closing your doors?
Starting out and what not to do during your Digital Transformation
No one said that a Digital Transformation process was easy. In fact, it is quite hard. Why? A lot of people and organizations are resistant to change. I have gone through two of them in my career and neither of them was successful. Both of their failures stemmed from two key issues. First, the top executives saw a need for change, but they never did what was necessary to get buy-in and support at all levels of the company. I saw the buy-in at the lowest levels because they saw a need and bought the vision, but the mid-tier managers never did. They were fearful that they would lose their jobs. Losing your job is a very probable harsh reality during a transformation. Why? Companies need better talent, top skills, and a different mindset. My second transformation experience failed because the executives never finished the job. They started the transformation, but they got distracted with running the business and they never completed it. The executives just stopped communicating. No one knew what was going on or if they were finished. And to make matters worse, they had layoffs every quarter. In my humble opinion, that is the start of the downward trend towards oblivion.
There are many reasons to do a digital transformation, so here are a few of the key reasons that most companies go through it:
- You are losing sales or key clients
- The marketplace is moving the company and industry in a different direction
- You need to update your portfolio of products and services to stay competitive
- Your sales profits are eroding because of competition
- You are not structured to scale and grow the business
- The customer experience needs to improve in order to attract and retain your customers
I was a part of a high-tech company where the executives brought in an expert on the subject at the start of our transformation. He was one of two guests that presented at our formal kick-off meeting. The gentleman was Geoffrey Moore who wrote the book “Zone to Win”. He introduced his concept of Zone Management and afterward, we received a copy of the book. I highly recommend it for anyone starting or leading a transformation effort at their organization.
What was revealing to me during his presentation was his comment that successful companies must execute on all four zones ⎼ Performance, Productivity, Incubation, and Transformation ⎼ but manage them independently. Cash cows, like the company I was at, prosper in the Performance and Productivity zones, but they have been threatened for years by other startups and had to start disrupting and innovating. This is something this company had not done in a while, so we did not have the expertise to pivot. Moore’s key message to us at the end of the presentation was during the transformation it is an all hands on deck effort. The other zones will suffer, but companies should expect this since the needs of the transformation effort should take priority. I asked our SVP about this after the presentation and he said: “Then we will be the first to be successful in all four zones”.
Looking back at the transformation initiative a year later, I think we were successful in two of the four areas. We were finding ways to cut and avoid costs (Productivity) and we started to incubate new products and services (Incubation). Unfortunately, our revenue performance was on a downward spiral because of our goals and objectives were out of alignment. They wanted growth by gaining new customers (this was a tall task because 80% of our revenue was based on our top 20 customers) and we were supposed to start selling our new services and products when they were not even out of the Incubation zone. Another mortal blow for us happened when two of the top twenty clients pulled back from buying our products. Why? Some of our products were having issues and they noticed the company stopped innovating.
This mishap was predicted in Moore’s book. Our company got caught in the crisis of prioritization because we focused too much on performance while trying to innovate and transform. You cannot be successful in all four zones without a solid governance model in place. Our executives did not provide the foundation that was required to lead a successful transformation of the company. We limped through the transformation and the business suffered. Moore calls this “Over Rotating to the performance zone”.
Moore lays out three essential steps to transform the company using the zones. First, install a governance model for each of the zones that involves the people, methods, metrics, and culture. Second, establish independent leading practices in each of the zones. Third, overlay a lightweight corporate structure to manage each of the zones. These zones will still fall under the executive leadership.
Focusing on Customer Success
Forrester says that “companies must now be continuously reinventing their business – with technology at the core – or watch from the sidelines while their market is disrupted by organizations proficient at digital transformation”.
Forrester continues on by saying that you must follow these four rules to transform your business:
Rule 1: Deliver easy, effective and emotional customer experiences.
Rule 2: Focus operations on things customers value.
Rule 3: Build platforms and partnerships to accelerate and scale.
Rule 4: Innovate at the intersection of experiences and operations.
What is interesting to me is that two of the four rules deal with the customer. The remaining two focus on the people, processes, and technology that make the customer happy. These rules apply to the Incubation and Transformation zones in Moore’s book. You have to catch the next wave and you simply have to be a growth company if you a high-tech firm.
The personalizing customer experience is paramount in this day and age. Customers are expecting choices and positive experiences. Companies are building out customer success organizations to be the link between the client and the organization in order to provide better business outcomes. But having a customer experience team does not mean you will be successful. Many companies are still focused on operating profit or the sales organization drives all customer decisions without taking into account what the customer is wanting or experiencing. The customer will have questions like 1) are we getting value for the money we are spending?; 2) do I trust you?; 3) are you solving my most pressing business problems?; 4) are you lacking the features and functionality I require?; 5) are you open 24/7 to deal with my questions and information I need?
As discussed in an article by Steven MacDonald, “So what do companies need to focus on?” MacDonald wrote something I thought was very insightful (Customer Experience Blog). He talks about 7 steps to create a winning customer success strategy (and not a customer service strategy – there is a difference). First, you need a vision to guide the team and the company (buy-in is a huge step). Secondly, you need to understand your customers and build a persona for each of them. Next, you need to develop an emotional connection with them (bond with them at a personal level) and then build a process/framework in which you can capture their feedback. And finally, you need a process, metrics and a way to act on what you are seeing.
Another interesting situation I witnessed was the attempted buildout of the customer success team by one of my previous companies. The Customer Success organization was first announced by the SVP during one of our quarterly meetings and they started hiring and presenting the new organization whenever and wherever they could to the other organizations within the company. After about three months, the SVP held a meeting with his direct reports and we found out at that time that the sales organization did not buy into the concept and it never took off. Soon after that meeting, the VP of customer success quit and that team slowly disappeared. In developing a winning customer success strategy, the rest of the steps can be rendered useless without the first word of guidance, empowered through a vision that is approved by the steering committee.
Looking at People, Processes, and Technology
In any transformation, you need to assess your people, the processes in all facets of the organization and the technology to support it. Here are three examples in each of the areas above when your company is designing new products and services to become the disruptor in the industry:
Example 1: Your organization is not equipped to sell, service or deliver the new capabilities. You don’t have a lot of choices here. Some viable options are that your people need new skills (training), you hire from the outside, or you use contractors. So you have to ask yourself. Can your resources adapt? Are they trainable? Who is going to take care of the existing products and services? What is the impact on the operating profit with the new organizational structure? Should you outsource to a 3rd party? These questions and others have to be taken into account during the transformation. There is no easy answer here, especially if you are not doing well in the industry. A Forbes article found that digital transformations can be intimidating with personnel issues being the biggest barrier.
Example 2: Each and every process within the organization needs to be scrutinized to determine if the new or updated processes. Here are some things to consider during this transformation. Will it:
- Allow you to increase customer engagement, satisfaction and loyalty leveraging the new organizational structure, operating models and technologies
- Provide the omnichannel experiences that your customers are demanding today
- Optimize the processes to reduce costs, improve your speed to market and increases your workforce productivity
- Easily handle the new transactions based on the additional products and services that you bring to the marketplace
- Extract insights and that can provide value by leveraging data across all new and existing sources
Example 3: Technologies drive the digital transformation today. The EnterprisersProject.com website says it best. “Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It is also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure”. The integration and use of data will set you apart from the competition. Find the right partners that can solve your most pressing business challenges, and you can make the pivot quicker in the marketplace.
Another personal experience: During your transformation, employee morale may drop significantly if you are doing reductions in the workforce. This was a huge issue with a company I was with. Each quarter brought new layoffs across the organization. No one was safe because we had an operating profit percentage goal to achieve. To combat this, communication is paramount. Unfortunately, our executives were not good communicators.
Delivering Value Quickly
Transforming your company is a long process. To be successful, you will need to deliver value quickly to show your organization that it is working and you are already seeing the results. Nothing speaks louder if you are seeing bottom-line results in operating expense reduction, and improved customer satisfaction leading to increased sales and revenue.
While you are realigning the organization and improving processes, you can approach the digital transformation as a series of iterations (small steps) with each step focusing only on activities that will deliver desired business outcomes while the rest of your organization focuses on continuous improvement.
As a systems integrator that spans several decades, I have seen solutions and technologies come and go. The products that provided the fastest ROI, lowest TCO and the best business outcomes were solutions that had the following traits:
- They were implemented in the largest companies in the world because they saw the value immediately
- The implementation times were fast
- The solution required configuration, not customization or coding
- The solution achieved their cost take out or cost avoidance goals
The world’s most valuable resource is no longer oil, but data. The current data economy demands a new approach of reaching out to your customers in real-time. Technology is creating a world of intensely customized and on-demand experiences, and companies must reinvent their organizations to find and capture those opportunities as they come.
Is the path you are going down to slow to keep the business – or customers – happy? Are you and the rest of the IT solutions team trying to figure out how to deliver the transformation without jeopardizing the various business-critical systems across which it is currently scattered and trapped? Are you trying to digitally transform your company, but need to keep IT costs in check and operations running smoothly?
A Transformative Technology to Consider
You can turn this around by integrating a Data Fabric (a thin layer) that sits atop your existing application and database infrastructures (no matter how large or small). By using a patented logical unit concept and innovative micro-database techniques, you can bi-directionally connect to your existing data topology in weeks, not years. It can provide a holistic, real-time 360-degree view and control to whatever business entities (like customers) that are the most important to your organization. That enables you to integrate, organize, store, access, and secure your customers’ data, delivering a holistic, 360-degree view of the customer and other business data in real-time—no massive integration or data warehouses required.
The K2View Data Fabric is already helping some of the world’s largest companies with solutions tailor-made for the following use cases. Think – data without delay to power your digital transformation:
- Customer 360
- Omni-channel customer experience
- Network transformation
- Advertising and content management
- CCPA & GDPR Compliance
- Data orchestration
- Test data management
Customer Case Studies
Here are some very interesting Customer Case Studies that delivered fantastic ROIs:
- A major North American company created a Data Hub to deliver a unified experience to meet their merger deadline. The Data Fabric solution was delivered in just 3 weeks, beating other options by 6 months
- A major North American Company created customer 360 views for a real-time self-service portal in 3 days. The Data Fabric integrated data across multiple countries and systems, then deployed an embedded web-services layer to enable a fast and reliable self-service experience
- A major North American Company used the Data Fabric to modernize the applications & data service layers using a micro-services approach. It delivered big cost savings ($15MM every 3 to 5 years) and improved speed to market, performance & security
- A major North American company leveraged the Data Fabric to drive its back-office digital transformation. Operating costs reduced via the elimination of all customized Java application services
- A major North American company used the Data Fabric to wipe out archiving & purging issues. They decreased their TCO (Cost of ownership decreased by over 75%) while drastically improving performance needed to purge & archive data from production systems to improve performance, decrease costs, and improve on the usability of the production systems
- A major North American Company used the Data Fabric to deliver data from siloed systems to fuel the self-service portal for >2M payment processing merchants. It improved the customer experience while reducing call center costs & metrics (ROI of over $10M over 3 years)
- A major Fortune 100 company used the Data Fabric to eliminate the company’s privacy concerns around cloud storage. The Data Fabric delivered a highly secure, integrated data layer to power a large Salesforce implementation
- A major Fortune 100 Company solved its workforce dispatch problem and is saving millions of dollars in cost avoidance ($13MM in six months) and at the same time improving the customer experience. The Data Fabric integrated their network and customer operations data in real-time to avoid unnecessary dispatches to customer’s home
- A major Fortune 100 company eliminated its company’s compliance headaches. It eliminated manual processes to drive efficiencies and improved system performance – in just 3 days. Execution performance improved by 1500% and Integration performance improved by 3000%
- A major Fortune 100 company leveraged the Test Data Management solution to improve its speed-to-market for customer-facing applications by 80%. Resources previously required to execute manual processes were also reduced by 30%. The solution easily integrated with their existing tools and apps to automate manual processes around collecting, securing & provisioning test data
Finish the job
An article from Barry Libert and Megan Beck says it best: “Now we know that this is not an easy journey. It takes guts, perseverance, change management, and the full commitment of the executive team and board. But it is folly for any company to plan a future that doesn’t include digital transformation”. I could not say it better.
Would you like to hear more about the Data Fabric solution? Let me conduct a free proof of concept. For a few hours of your time, we will invest 2 weeks to show you something you have never been able to do before.
NextUs Consulting is a system integrator that can take your data that is siloed in many different applications and systems and transform it quickly to allow you to react to privacy policies, security, customer demands, and business opportunities.
I am interested in your comments and suggestions on this article. Please let me know what you think. Also check out my other articles on Business Intelligence, 3D Printing, Software Integration Platforms, Quality Assurance, and Security. You can find me on LinkedIn. Jay Cappy is an executive leader and consultant that has helped large corporations and small business owners with Digital Transformations, Application Modernizations, IoT, hybrid cloud, infrastructure, integration, BPM, custom development, implementations, security assessments, and security strategy and plans.