Monday Dec 16, 2024
Monday Dec 16, 2024
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By Nilupa Kiringoda
As a result of the pandemic, most companies and large enterprises have been forced to consider the possibility that digital and digital transformation is here to stay. However, although they realise the necessity of transforming, they cannot comprehend the effort, commitment and strategy that is required to successfully transform an enterprise.
Digital transformation should add value to every customer interaction, and organisations should be taking bold steps at this opportune moment to revisit everything they do, from internal systems to customer interactions, both online and in person. This is where challenges can emerge. Some key obstacles that large enterprises face pursuing a digital transformation strategy include:
Lack of a clear vision for a digital transformation strategy
Most large enterprises do not have a sound digital transformation strategy.
They also lack a common goal, with each department usually operating in silos. However, digital transformation is an organisation-wide shift, and all components should work together to succeed. A clear purpose, a vision, and set of goals must be established. Not having a vision is like setting out on a journey without a destination. If you are lucky, you could stumble onto something great, but it is highly unlikely.
Organisational resistance to change
Change means pain for anybody. However, pursuing a digital transformation strategy means taking bold steps, experimentation, assumption of risks, and some failure. In large enterprises, most vital digital projects have extended timelines because they challenge routines. When routines are challenged, most employees feel uncomfortable. Organisations should make digital transformation a priority or risk getting left behind.
Married to legacy
Even if organisations are willing to transform digitally, they remain entrenched in legacy routines, inflexible technology stacks and development processes which have been layered on top of each other, slowing down the adoption of a transformation strategy. Successful digital transformation is achieved through iterations of a “build, test, and learn” approach where new features are being routinely added, measured, adjusted, and re-deployed based on customer feedback. Enterprises who fail to forget legacy and bravely adopt digital are at risk of losing opportunities to more nimble and adaptable competitors who practice change adoption and management.
Organisational structures getting in the way
Many organisations attempt digital transformation without upsetting the applecart. This is possible but it will be a terribly slow process. According to Forbes, even though about 84% of companies recognise digital transformation as crucial, only 3% have completed any company-wide efforts. Digital transformation is a substantial undertaking and might mean making drastic alterations to organisational structure, changes in roles, and even overhauling the operational model which might in turn inspire innovative thinking and changed mindsets.
Other reasons like budget limitations, talent shortages, and competing priorities can also become common digital transformation challenges. However, bold, agile organisations with the right leadership, strategy, and customer focus are sure to thrive.
Examples of how digital transformation is driving enterprises
Prime examples of companies that are driven by digital include Uber, who created the world’s largest taxi service, and e-commerce platforms like eBay and Alibaba who have built massive online retail platforms without buying inventory. Another example is Netflix, starting out as a mail order service, and now disrupting conventional TV, eliminating long video rentals company Blockbuster, and changing how we consume video content overall. Netflix has since scaled from streaming digitally to creating their own content and continue creating disruption through technology.
They have included a personalised user experience through their recommendations engine which uses machine learning to gain unprecedented insights into ‘learning’ the viewing patterns and preferences of their customers. This gives the platform the ability to automate millions of decisions based on user activities using AI. This information is then used to decide everything from the design of its user experience to the development and production of movies at their in-house studios.
AI and IoT Technology is shaping the office of the future
It is apparent that AI and machine learning, XaaS (Everything-as-a-Service), IoT, Data Analytics, CDPs (Customer Data Platforms,) and Digital security have emerged as top trends in digital transformation for the future. AI and IoT are among the top technologies’ organisations are heavily investing in and relying on to increase efficiency and provide competitive advantage.
AI can range from automating a simple process to more intelligent decision making, while IoT helps to capture and collate large volumes of data from several sources. Although categorised separately in the past, the convergence of AI and IoT has redefined the way organisations and economy’s function. AI embedded in IoT creates smart systems that simulate intelligent behaviour and support decision making with little or no human interaction. While IoT provides data, AI can decode responses, offering innovative solutions so businesses can make informed decisions.
AI and IoT together helps organisations boost operational efficiency by providing insight into time-consuming processes while enabling better risk management as they can also be used to predict and gauge the number of risks and respond to it efficiently. You see companies like Google using this combination to see reductions in their data centre cooling costs while Fujitsu ensures worker safety with the combined use of AI and IoT for analysing data sourced from connected wearable devices.
They can also assist organisations running mission critical operations by eliminating unplanned downtime which can be costly. Further, AI enabled IoT allows organisations to predict equipment failure in advance and deploy predictive maintenance procedures saving billions of dollars. According to Deloitte, organisations report the following results with the use of AI and IoT:
Robots in manufacturing, self-driving cars, and retail analytics involving various data points from cameras which observe customer behaviour and suggest dynamic staff allocations are examples of how AI and IoT are shaping the businesses of the future.
Emerging technologies and their impact on the enterprise bottom line
Various technologies deployed in digital transformation offer an opportunity for organisations to directly impact their bottom lines by bringing in measurable decrease in costs and enhancing efficiency while also contributing to the top line by increasing revenue. Like AI and IoT, even though not as new, RPA (Robotic Process Automation) is still considered to be a widely used technology across organisations, to achieve operational efficiencies and reduce operational cost which will impact the bottom line. Companies are also investing in analytics tools recognising the value of data and the insights they can derive to improve their customer experience, driving increased revenue and resulting in positive bottom-line impact as well.
Digital transformation is an undertaking which requires a sharp vision and a goal-oriented mindset along with the perseverance and willingness to adapt to change which helps organisations to survive and face the future, allowing them to compete better in an economic environment that is constantly changing in response to technology evolution.
[The writer is Senior Director, Delivery at Sysco LABS Sri Lanka. As a global software delivery specialist, Nilupa has more than 16 years of experience in implementing product-based, mission critical solutions to global financial markets by leading large, cross-functional teams. He has experience in working with a diverse customer portfolio ranging from emerging markets in the Asian and African regions to top tier markets in the American and European regions. He is passionate about driving large scale technology transformation initiatives and building high performing global technology teams. Nilupa holds a BSc (Hons) degree in Business Information Technology from Staffordshire University, UK and a Master’s degree in Business Systems from the University of Monash, Australia. He is also a Project Management Professional (PMP). Nilupa is a member of the SLASSCOM General Council and on the Board of Directors for the American Chamber of Commerce Sri Lanka.]
