Thursday, January 17, 2019

How Would you Calculate the Organization’s Performance Score of Digital Transformation

Digital transformation is worth its weight not because of its high cost, but because of its high impact on the business’s long-term prosperity. 

The digital transformation represents the next stage of business maturity. It has to permeate into business vision, strategy, culture, communication, and processes. etc. Thus, performance management should take a multidimensional approach, to connect all important dots, with multifaceted perspectives. In practice, the more meaningful the thing you want to assess, the harder you can measure it objectively. More specifically, what are important factors could be used to measure digital transformation score and how to lead transformative changes successfully?

Make an assessment of resource (Human and financial) invested, allocated and ROI: To improve business performance and keep digital fit, successful capacity planning and resource management are critical to ensuring that resource is available before they are needed. In many organizations, resources management becomes a bottleneck for digital transformation success. Thus, how resource allocation is determined should be understood by all important parties. The resource allocation scenario needs to be transparent, take advantage of resources effectively, optimize cost, set the right priority, keep the business process transparent, and manage a healthy “run, grow, and transform” portfolio. The point is, for any company to succeed in the digital transformation journey, it’s essential for the entire company to be pulling in the right direction, calculated resource invested to optimize its usage and improve business efficiency and performance.

The number of change initiatives being launched and the overall change success rate: Change is never for its own sake; there are two reasons to pursue change: Become better at what you do or be able to do something different. The enemy is not changing per se; it’s the change without focus or purpose. Statistically, change management has a very low success rate across the vertical sector. One reason that change initiatives fail so often is that companies attempt a level of change well beyond their predominant mindset, business capabilities, and management approach. We are living in a complex world where inventions, developments, and conflicts are continuously changing and that makes it impossible to have the complete knowledge and understanding of many issues facing businesses today. Either managing changes or implementing the strategy, the business can no longer work on the basis of static exploitation internally or externally as it has been pursued in the past. It's the dynamic planning-change-adjustment continuum. Digital transformation is the large scale changes, so often the tools or the capabilities that work reasonably well for business improvement have little success in the business transformational effort, and in fact, can be a waste of a valuable resource and a source of frustration. It’s important to tailor the nature of the change initiative, take the logical scenario, apply the right strategy and methodology, make the timely adjustment and measure change performance score accordingly.

Process automation and optimization: To keep the wheel spinning fast enough, businesses should continue eliminating waste, removing redundancy and fine-tuning processes. Business processes are like body functions, made up of steps that convert inputs to outputs. Process management is to manage known from the flow. A well-defined digital framework enables developing cross-functional and interrelational management processes to help reduce business tensions, frictions, and conflicts that arise. A progressive organization should always take process improvement and automation as a journey, not as a one-time project, in order to build a competitive advantage. Selecting a process to improve should be based on the business goal and priority. Automation and complexity, etc, are also considered factors for accelerating performance. Consider the level of automation possible within the business process, as an additional parameter once the processes for improvement are identified. Not all activities within a process can be automated but automation certainly makes the process more repeatable and predictable. For effectiveness in process improvement, always put the focus on targeting the KPI’s /SLAs that the organization wants to achieve.

Employees motivation and performance: People are always the most invaluable asset the business should invest in. But in many organizations, the employee engagement rate is low, people are not motivated to achieve high performance or unlock their potential. Most organizations still use static mechanisms to measure performance mainly based on quantitative delivery. What is or has been missing from the organizations is perhaps a palpable sense of long-term vision and people-centricity. Organizations and their leaders often become so preoccupied with bottom line performance that they lose sight of the human factors that account for it. They didn't pay enough attention to unleashing collective human potential for the business's long term prosperity. Thus, from talent management lens, the performance score of digital transformation needs to be calculated based on top management encouragement and empowerment, challenging activities being involved, the level of autonomy given. Often, when employees nature talent is used, they are more engaged and motivated to achieve higher than expected performance. In practice, high-performance digital organizations are moving towards a more humanistic model by enhancing personal discovery, autonomy, and mastery.

The organizational culture readiness score: Change is sometimes perhaps about making some improvement at the behavior level. But the transformation is the change, but on a grand level, at the level of the system, differentiate in terms of the end result on a systemic level. Transformation leaders have two jobs: to manage their functional role and to be accountable for the cross-functional initiatives that drive transformation. They should also evaluate their organizational culture readiness objectively. Culture is a collective mindset, attitude, and behavior. What is the culture of the organization like? Is it very team-oriented and collaborative, or is it hierarchical and siloed, in which case the organization tends to pick whoever is best to lead a new initiative. Sustainable change is rather achieved by true internal shifts, which is more related to transformation than to "managing" change. This is needed to support a cultural change through the change lifecycle which enables everyone, wherever they are in that cycle, to accept the direction of the journey and focus on benefits realization.

Digital transformation is worth its weight not because of its high cost, but because of its high impact on the business’s long-term prosperity. Calculating the organization’s performance score of digital transformation is important to keep changes on track and make continuous improvement. The high score “digital masters” can proactively develop a set of advanced and unique business competencies step-by-step and build the digital premium into their very foundation of business for accelerating performance and improving the organizational maturity.


Post a Comment