Future Gazing – It’s not the what but the how that makes Digital Transformation a success
As discussed in our previous blog post, for most organisations Digital transformation is a must, but you need to think about how you will do it, before you do it. We take a look at the long-term future of it and how organisations can best prepare for this future.
Future gazing is a function that considers emerging technologies and how they can potentially be utilised to deliver benefits to an organisation. This post considers Future Gazing not in terms of specific technologies but on how organisations should be managing the disruption that these technologies bring to their environment.
The world is in the midst of a revolution dominated by the rise of digital. This has an impact on the way that people live, work, interact with each other and the environment around them, all driven by new and innovative technology. The same is true for organisations.
Looking to the future, this rate of change is likely to increase at pace as technologies grow and mature. The rate of this change has huge implications on organisations across all sectors to improve their customer offerings, increase their operational efficiency and keep pace with “competitors” as well as being able to balance their books. This transcends the concepts of public and private sector, as well as industries – a consumer’s best experience in one industry quickly becomes the benchmark across others.
This places pressure on government organisations to look at areas where they can digitally transform the services that they are offering – alongside the frequent pressure of funding cuts or the need to make savings. It often seems safer to stick with legacy systems and siloed ways of working that do not (at this point!) have any additional cost outlay and “do the job”. They do not know what they need to transform, why they are transforming and how best to implement this. So they do not transform. By taking this “safer path”, organisations are making it more difficult for themselves in the future to operate efficiently and productively, make savings and provide the best standard of customer experience that they can. This way of operating is not future proof and will ultimately cause more problems in the longer term.
The risks associated with a digital transformation programme are considered high and this is well documented in research by organisations such as McKinsey. This makes undertaking a digital transformation frequently a daunting task, however, it is a path that all organisations will need to head down if they are to survive in the digitally revolutionised world.
A Brighter Future?
Digital Transformation, ICT supported business and infrastructure improvement are at the heart of innovation and a brighter, cheaper future for organisations with better services for their customers or, in the case of government organisations, their citizens.
Organisations are frequently not able to economically obtain and maintain the skills in house to implement these futures themselves – supply becomes increasingly specialised and demand rises. The result being that a large proportion of these projects are outsourced to suppliers with the skills to implement. These outsourced projects, across industry and the public sector, typically have a success rate of under 20%. The typical large tech-enabled project will have spent 45% more than intended and delivered under 45% of the promised value.
With the current ability of organisations to manage large projects involving some element of technology, this future does not look very likely to be bright.
The key to a brighter, cheaper future with better services will be organisation’s ability to contract and commercially manage these suppliers across large interrelated outsourced transformation projects. They must transform their Business Understanding, Commercial and Contract Management Capabilities before they even think about embracing a digital future.
This is because:
- Big outsourced tech-enabled projects are the future
- These projects fail grievously due to poor ability to poor understanding of needs and poor commercial / contract management
Organisations need to understand where they are now, how they get from there to their ideal ways of working and which technologies might best enable this transformation. In a world where the future of transformation will be driven by outsourcing, organisations should be thinking about how they:
- understand what their business needs;
- identify what they need from technology;
- pick the right suppliers;
- communicate their needs to suppliers; and
- manage those suppliers to deliver what they need.
At the heart of the future for an organisation is the commercial relationships that they have with their customers and supply chain. By putting the right contracts in place to deliver what they need, understanding how to manage the delivery to get the outcomes they require, the organisation is best placed to manage their transformation. In order to have any future to gaze at, involving smart places or just good working tech-enabled services organisations must first transform their transformation and supplier management capabilities.
If this is not taken seriously and tackled first, all other transformation efforts are likely to fail expensively.
- The Difficulty with Dependencies
- New Year’s Resolution and Digital Transformation – Journeys of Change… Or Not
- Better Together – Why Supplier Management will be vital to Digital Transformation success
- Future Gazing – It’s not the what but the how that makes Digital Transformation a success
- Why should embracing Digital Transformation terrify large organisations?
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