Why You Should Optimise Your Digital Transformation Journey
Today’s digital transformation is different from technology-enabled initiatives from the past. Businesses are able to completely reimagine their end-to-end value chain and rebuild it with available technology. Organisations that successfully manage expectations with customers, employees and financial markets can rebuild a business that is more agile and operates at a higher run rate and lower cost.
Financial markets have not changed how they evaluate business success. Revenue growth, profitability and cash flow remain the drivers for market valuations. All digital programs eventually have to improve the fundamentals. Organisations that announce major digital programs may get a short-term boost in valuation from major investors, but it is only sustainable if financial results follow.
Established investors are not swayed by digital intents but only by digital results. This is why all-digital programs should have clear value creation goals and measurements. This means measuring the tangible revenue growth and cost takeout and also quantifying the value of softer benefits of efficiencies and improved employee and customer experience.
Transformation programs represent change and changes create anxiety and uncertainty for employees, customers and shareholders. Successful digital initiatives create a vision of a compelling future for all stakeholders. This vision answers the question of why the transformation is great for the business but also why it is great for everyone involved. People are sceptical of disruptive change. Being clear on how the change will benefit them is an essential success. Employees will acquire marketable skills and have exciting new roles. Customers will find it easier to find the products and support they need. Shareholders will have a more predictable, efficient and profitable business.
The Importance of New Digital Journey
The introduction of new technologies does not change how businesses keep scores in their financial statements. Digital transformation, however, did change the fundamental relationship between customers and suppliers. Digital experience and efficiency allowed the emergence of new business models that can typically outperform traditional ones. Digital technology is transformational because it fundamentally changed the art of the possible in revenue growth, cost of sales, cycle time and process efficiencies. Organisations that take advantage of these new efficiencies while inspiring their customers and employees to engage in the new digital way will outperform the rest.