Entire industries are being turned on their heads because of the widespread adoption of new technologies like automation, machine learning, analytics and cloud. Streaming video services have spurred cord-cutting and a decline in cable subscriptions. Apps like Uber have decimated the taxi industry. Amazon has changed the face of retail beyond recognition.
This trend is mirrored in less well known applications in the enterprise sector. Behind the scenes, age-old industries like finance and insurance are facing a shake-up just the same.
How can you identify an at-risk company? Simple – they are businesses that operate legacy systems, tools that haven’t been upgraded in decades, and have little intent to make any change. While it is an unpleasant truth, organizations that delay reinventing themselves digitally will face certain disruption, falling behind flexible, tech-first startups.
Preparing for this disruption without throwing out all your existing systems is possible, but it requires shifts in company culture, leadership, digital transformation planning and the new coin of the realm, data. These shifts can make the difference between becoming the next Blockbuster versus the next Netflix.
Redefining Digital Transformation
Digital transformation is quickly becoming a clichéd buzzword. That doesn’t mean it’s not hugely impactful and important for companies to start putting into practice. Most enterprises have some idea of what digital transformation means to their business, at least in theory. Where they struggle is how to actually select and successfully implement the new technologies and solutions to speed business processes and improve productivity, and eventually, profitability.
The adage, “if it ain’t broke, don’t fix it” may apply in some situations, but for many companies facing disruption, they should instead be looking toward how their systems will work in the years and decades ahead. For companies that are not digital-first and still relying on the same hardware that has been working for decades, digital transformation can seem overwhelming, not to mention the idea of justifying the costs of new implementations to a board of directors. Nonetheless, 2019 is the year to ease into change. Elements like speed, ease of use and flexibility are non-negotiables for end users – and not being able to meet these base needs can hold up business processes and snowball to cause larger issues.
Easing into digital transformation by prioritizing technologies and solutions that augment, without doing away with, legacy tools is a worthwhile strategy for businesses concerned by too much change. This will enable enterprises to start on their transformation journey and capitalize on digital advantages like speed and flexibility, without having to initiate a massive overhaul right away.
Initiating a Culture of Change
While digital transformation is essential to stay ahead of newcomers, a shift in company culture is just as important for enterprises. Leadership, from the board of directors through mid-level managers, must spearhead any technological change and act as a champion to educate the broader organization. Any new tool or solution must come with training and over-communication to set off a broader shift in mind-set across the business, starting from the top.
At many companies, it falls to the chief information officer to usher in this change and convince key decision makers of the necessity of a technological refresh. This also means they are largely responsible for answering tough questions from staff like, “What’s in it for me?” and especially “What happens to me?” In the case of certain new solutions, they must also plan retraining or upskilling programs for staff. By over-communicating, educating and setting a comprehensive roadmap in place, leadership can bring about a wider shift in mentality that will enable a smooth transition period and productive change.
While change is rarely easy, if an organization can broadly adjust their outlook on a new initiative from the top down, a successful digital transformation is possible.
Data as a Competitive Advantage
While revamping company culture and refreshing longstanding technology may feel like hurdles for enterprises looking to compete with the new kids on the block, they do have a major competitive advantage at their fingertips. After so many years in business, organizations inevitably have stockpiles of data. As data continues to grow in value, enterprises have a fantastic opportunity to get ahead of competition. As long as their data is well managed, enterprises can harness this asset through solutions like machine learning, automation and analytics, to speed business processes, extract strategic insights and make better decisions.
For instance, financial institutions that have been around for centuries are leveraging their data to compete with digital competitors. Age-old institutions like banks are not going anywhere as long as they continue to make their decades of customer data work for them. As an example, banks are able to identify cases of credit card fraud in real-time by automatically analyzing historical records, a capability that most newly established competitors cannot achieve.
Change is never easy, but enterprises across all industries must brace themselves for disruption, and take solace in knowing that they have the opportunity to prepare for it. By finding a digital transformation strategy that works, cultivating a company culture that is open to change, and actively leveraging their data, these businesses can come out on top while keeping their market share away from disruptors–maybe even growing it. All the while, better servicing customers, and even employees, in the process.
Neil Kinson is Chief of Staff for Redwood Software.