Digital transformation has become today's imperative for survival. So how do we do it well?
The charge to digital transformation means challenging the way businesses have been run for decades. To achieve that requires real vision. And a clear idea of what good looks like.
To succeed means really embracing the concept. So, what does good digital transformation really look like?
The best description I have heard comes from MIT’s George Westerman.
“Successful digital transformation is like a caterpillar turning into a butterfly. It’s still the same organism, but it now has superpowers. Unfortunately, when it comes to digital transformation, many senior execs aren’t thinking about butterflies. They’re just thinking about fast caterpillars. And it’s hard to keep up with your competitors if you’re crawling ahead while they can fly.”
The fast caterpillars, in this case, tend to either focus on traditional responses such as rationalising costs and increasing scale or they are counting on singular technologies such as RPA to transform their business. This is tantamount to simply ‘sticking a band aid’ on the systemic disruption currently being faced by financial institutions.
The scale of the challenge facing these fast caterpillars should not be underestimated – McKinsey estimates legacy financial institutions will see profits decline 20-60% by 2025 if they fail to evolve digitally.
In contrast, the butterflies of digital transformation have had their eureka moment. They understand successful digital transformation starts with having a data strategy. Firms with a strong focus on data that – importantly – everyone has confidence in are best positioned to truly transform their business.
Being able to access and process all your data – no matter the channel, format or location - enables firms to create a blueprint for the future business. With today’s only constant being change, having the confidence to truly change your business takes vision.
Successful digital transformation is about being truly client centric with data at the heart of everything. Transformation needs a constellation of technologies to transform the entire business, not just experimenting around the edges. With data at the heart of a digital backbone, processes can be optimised and overhauled, and technologies reimagined.
The last word goes to novelist Richard Bach. “What the caterpillar calls the end of the world, the master calls a butterfly.”