Tuesday, August 7, 2018

What are the Pitfalls on the Journey of Digitalization

Ad hoc digitalization is doomed to fail.

Digital means the increasing speed of changes, hyperconnectivity, and always-on business dynamic. The digital boundary is not a straight line, it has the zig-zag patterns on it. The journey of going digital will not be flat. It represents a break from the past, with a high level of impact and complexity. Ad hoc digitalization is doomed to fail, how to take the stepwise approach, identify and avoid pitfalls on the way?

Lack of data-based business insight: The digital era is volatile, complex, uncertain, ambiguous, and information abundant. To step into the deep, deep digital new normal, businesses today must bridge the insight gap to both frame the right problems and solve them effectively. Lack of data-based business insight will cause decision ineffectiveness and stifle innovation. Thus, it's one of the biggest pitfalls on the journey of digitalization. Running a real-time high-performance digital organization starts with providing the real-time information management solution to overcome the business management challenges. Running a digital business is an iterative cycle for having the right information to make informed management decisions for developing the right products/services to serve the right customers timely. From an innovation management perspective, information brings about business ideas; business ideas generate lots of information. Organizations must take advantage of information to gain insight, make a culture shift to run the faster and smarter real-time digital business. As the matter of fact, at today’s ever-changing business dynamic, the beauty of the newly established digital landscape is the fresh insight of the business, gaining multidimensional perspectives, garnering attitude and feedback, and motivate people to practice knowledge power and explore the better way to do things.

Lack of holistic management discipline: Traditional management runs in silos; silos introduce lots of delays, waste, queues, and bottlenecks. There are overly rigid processes and organizational pyramid which cause bureaucratic management redundancy. Thus, to expedite the speed of changes, digital organizations must take the holistic management discipline by enforcing cross-functional communication and collaboration; enabling information flow, and empowering change agents. Business leaders should realize that the breakthrough digital transformation of the business requires both scaling up and digging deeper, it has to fine-tune the underlying structures and functions, to bridge gaps existing across functional, industrial, and geographical borders. Digital organizations can make a leap to reach the next stage of the growth cycle when the scale of business interrelations, interactions, or inter-relational interaction surpasses the silo-based business capacity. By practicing the holistic management discipline, organizations can integrate their interdependencies and ensure that the business as a whole is superior to the sum of pieces. The high mature digital organization can bring a greater awareness of intricacies, and systematic understanding of people dynamics, resource alignment, and technological impact. It involves the multidimensional analysis and multistage processes to shift from doing digital to going digital.

Lack of an objective assessment of their risk appetite, attitude, and risk management capability: Some organizations have very low risk-tolerance, they only focus on operations in low-risk territories and incremental enhancement only. Organizations could miss the opportunity if they solely focus on quantifiable benefits or short-term business profit. Therefore, the right dose of risk appetite and attitude are critical to the long-term success of the business. Digital leaders today should gain a balanced viewpoint about the risk. It’s their responsibility to establish an environment in which people can grow and develop, be courageous and cautious at the same time, nurture the culture of risk-tolerance, and improve business resilience. From the innovation management perspective, traditional corporations, often get stuck at the lower level of innovation maturity, because they become too dependent on satisfying corporate regulation or protocols, and not get around to develop a culture that fosters/rewards innovation. Businesses fail at innovation execution because they have no clear processes, nor understand the linkage required to work horizontally, as well as how to manage a healthy innovation portfolio with both breakthrough and incremental innovation mix. The right attitude for innovation is to be cautiously optimistic, take calculated risks and be alert about obstacles or pitfalls.

Digital transformation is worth its weight not just because of its high cost, but because of its high impact on the business’s long-term prosperity. It’s important to set guidelines for prioritizing, iterating, learning and working on a rhythm of sustained delivery, avoid pitfalls, manage risks, with the ultimate goal to accelerate business performance and unlock digital potential.


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