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Is your organization ready for Digital Transformation?

With every element of our lives pivoting to online due to COVID-19, we have found that the processes that used to work before, no longer do. However, the accelerated pace of digital transformation brought on by the pandemic has helped us fundamentally reimagine how we conduct business, deliver products and services to customers using modern, digital channels in an agile, sentient, and personalized manner.

In a rapidly changing technology landscape and a strong demand from customers for connected, anytime-anywhere services delivered with hyper productivity, digital transformation is no more a good-to-have phenomenon. It is a must-have. Organizations acknowledge the inflection point technology is at today and have several digital transformation projects underway.

Making businesses digitally fit, however, is much more than just technology integration. The objective of digital transformation is to steer clear of the superficiality of just developing digital tools. It requires a data-centric and a human-ware approach to create connected organizations that sense, observe, learn, and grow like living organisms.

It starts with a data-centric evaluation of all business stakeholders, including people, processes, and technology. Each area has unique requirements that change as the business grows and evolves.

To be, or not to be

A one-size-fits-all approach will not make a cut in a dynamically changing business landscape. Because of a shortened lifespan of technology cycles, companies need to be nimble in adapting digital transformation to stay relevant in the future. But every company must follow a unique journey to implement effective digital transformation. Organizations must ask and seek answers internally to the question – is your organization ready for digital transformation? – to define their future ahead of others.

Digital Transformation goes beyond incremental digital plugins such as mobile apps for banking services. It digitizes the core of a business model. When you are looking at transforming the core, data-driven assessment of operations is a must to identify the exact levels of digitization required. Not having a clear picture of the current state has its repercussions – ambiguity in the solutions we want to implement. For example, assessment of the readiness of a process for digital transformation might reveal that it is not creating enough volumes to make an automation project profitable. Such a visibility can be informing for business strategy calls, saving the cost of unnecessary digital implementation.

So, how can organizations assess if it is truly ready for digital transformation?

Data is key. The assessment of transformation readiness begins with assessing current capabilities and anticipating the need to digitally transform based on vital business metrics. There is no ideal approach to perform this assessment, but a top-down approach is a proven methodology. It begins at the broad organization level and goes deeper into new age digital and psychological parameters like customer satisfaction, user experience, information security, career growth, work-life balance, along with the traditional parameters of cycle time, cost, AHT, accuracy, etc.

Assessing digital maturity
  1. Identify parameters on four dimensions: Organization Culture, Customers, Operations and Technology
  2. Identify the criteria for basic, reactive, proactive, and best-in-class stages.
  3. Give weightings to the parameters based on their importance in digital maturity and prepare a formula to calculate the maturity score
  4. Assess the organization on each parameter and calculate the maturity score for each dimension based on the formula

Measuring the Gaps and opportunities
After maturity assessment, measure gaps between the organization’s digitization levels and best-in-class practices. After identifying the gaps, look for solutions that can help in better compliance to those. Prepare an implementation plan and perform a cost-benefit analysis to have a holistic view of the expected ROI.

Down to basics

Once the current state is defined, the next step is to assess where it fits in the industry in terms of digital maturity. Two approaches can be used to measure digital maturity of organizations – (1) Benchmarking, which is the standard practice of identifying key metrics related to a process, business unit, or industry (based on the level of assessment) and mapping them against industry or best-in-class practices; and (2) Digital Maturity score, which charts out the near exact levels of digitization in an organization, taking culture, customers, operations, and technology as parameters.

For benchmarking, typically client and industry level data are required to weigh against the stipulated parameters, which may or may not be easily available. And even if it is available there is a chance that most of the competitors are either behind us or at par.

Digital maturity model is relatively tougher than benchmarking, but organizations are increasingly tilting towards it to better understand processes and functions and the levels of digitization therein. The model, which is designed based on futuristic goals, proactively assesses capabilities internally, rather than relying on external comparisons of best-in-class practices, providing a more accurate assessment of digital maturity.

A digital transformation journey is a continuous process, much like evolution. It requires multiple changes during implementation based on real-time feedback and technological changes. Tackling a high horse requires an organization to be like a living organism, sentient, observant, learning, and growing to realize the full potential of digital transformation.