Opinion: Digital transformation is not just technology uplifts

In 2020, due to the pandemic, organisations have been "forced" to review and remap their CX journeys and strategic approaches by providing greater value-add to each touch point of the customer experience - through changing engagement across channels, simplifying business processes, and redesigning products or services. This led to the acceleration of digital transformation across diverse industries including the health-care, retail, food and beverage, travel, hospitality, banking and finance industry.

Organisational leaders have come to realise that if they do not have a relevant digital marketing strategy, there is a high chance that they can be pushed out of that industry relatively quickly and they are therefore jumping on board the change due to the "burning platform”. With greater openness and appetite that leadership teams have for digital transformation, they have come to accept that digitalisation does not necessarily take away the personal-touch. For example, greater acceptance in the field of medical practice (i.e. use of technology for consultation) or in education (i.e. use of AI to map a targeted and bespoke learning journey).

However, despite the above situation, there are still key misconceptions and challenges face by change leaders namely:

Misconception #1: Digital transformation is a technical change process

This has led to projects getting stuck mid-way and having to be fixed or restarted, with the industry finding that 80% to 90% of digital transformation projects had failed or fell short of their objectives for variety of reasons.

Some reasons include inadequate or ad-hoc management of the process - without realising that digital transformation is actually a change management and not just technology uplifts. This results in a lack of upfront strategic effort to define the clear business objectives, design a bespoke and strategic digital approach based on the unique and complex needs of the business.

These also require technology development and selection strategy that are adequately resourced with the right change leaders to drive the innovation process, incubator trials and the corresponding organisational restructuring, taking into account the roles and capabilities of new and legacy teams.

More importantly is the need to align and progress the culture of the organisation to embed the change and managing the psychodynamic aspect of such a change including any unconscious change barriers. These are issues that training alone will not be able to address.

Misconception #2: Digital transformation is costly

This may not always be the case as it depends on if the transformation is designed holistically upfront, including whether it is sufficiently resourced and implemented to avoid any "surprise" cost that may come along the process.  

Projecting forward or tracking the sum total of the digital transformation over cumulative number of years can allow organisations to eventually spend less than an ad-hoc approach. Also, the allocation of spends across different areas can differ. For example, investments may increase in innovation and development of technology or managing the change. However, this may be off-set by the reduction in the cost of running legacy systems, and reduction in the number of teams needed for manual processing. Furthermore, savings from such digital efficiencies can be redeployed by stopping low-value projects that can identified through data derived from the technology, and redeployed into improving operational efficiencies and costs through developing stronger cost management, sourcing, monitoring of demand and simplifying processes and systems.

Meanwhile, some of the challenges that marketers will face when leading or embarking on a digital transformation journey as a change leader include:  

Challenge #1: Lack of collaborative culture

Although this is not often openly discussed, the lack of a collaborative culture where functions within organisations tend to operate as silos can make it challenging for the marketer. This is especially so if marketers are not prepared to take on the task to orchestrate change and sufficiently map out their path to navigate change internally.

Today, there still exists tension, which leads to misconception, in relation to the decision as to which department should the digital transformation team be embedded - whether this should be a technology-led or brand-led initiative. To be able to succeed, it will require the entire organisation or at least the affected teams to undergo a holistic cultural transformation as well. Often there is too much delegation of responsibility to the technology teams - with marketing or business functions watching from the sidelines. This will not achieve the desired objectives set by the organisation for the business, brand and digital transformation process.

Challenge #2: Chasing the "shiny new toy"

With the distraction of "digital exuberance" prevailing in the current marketplace exacerbated by the disruption caused by the pandemic, it is not surprising that brands and marketers can become too pre-occupied with the pressure of needing to follow and embed the latest and/or trending type of technology to become more digital - all in the name of enhancing customer experience.

This is a misconception of what digital transformation is about. It should in reality be a business-led transformation journey supported by technology not the other way round. This means brands should be adopting new technology in search of opportunities to apply them. Therefore, the most effective digital transformation efforts are usually those that are led by a clearly defined digital strategy, and an identified starting point based on well researched and analysed business objectives. These should be closely inter-linked with channel and technology solutions, as opposed to being pre-occupied with and led by the type of technology, be it an AI-driven solution, an app or chatbot. In addition, a leader who can navigate the outside - complex brand change implementation, with a collaborative and agile culture across teams is also critical for the success of the digital transformation.

The writer is Wong Mei Wai, founder, CEO and chief change catalyst of APAC Global Advisory.