These days, it’s not a question of if – but when – your organization will digitally transform itself. The real unknown may be how it will take place.
If the transformation is done poorly, then a company’s very survival might be at risk. But if it’s done right, then the organization may evolve into an enterprise that is more agile, more competitive and more innovative.
Much of this, of course, depends on senior leadership. Those in the C-suite will be tasked with ensuring an organization is digitally on the right track and doesn’t squander the efforts or dollars put into its transformation.
One of the best ways for senior leaders to understand how to determine the organization’s needs, create the right culture and use its resources wisely can be found in a new white paper from Knowledge@Wharton and sponsored by HCL Technologies. In the paper, experts look at the best practices of several organizations that have made successful digital transformations and lessons learned by leaders.
The digital transformation goals for Novelis, a major U.S. industrial aluminum processor, were: virtualization, elimination of data center duplication; process improvements; and a roll up of business operations.
Kenneth Benson, global IT hosting director, says the company made significant investments in the effort, such as buying new hardware and third-party service provider contracts. It also made cuts, such as closing more than 20 data centers and moving to private cloud services. This not only allowed Novelis to switch operations among data centers in an emergency, but saved $14 million in data center closings and fewer employees.
The change also has given business units greater transparency of the fees they pay for services and greater predictability in service availability. They can see more clearly where they can cut costs or be more efficient, and can predict problems with storage, servers and networking before they happen since they have real-time monitoring and performance data access.
Before the transformation, about half of the efforts by Benson’s team were focused on building the infrastructure necessary for the organization’s 40 to 50 projects a year. After the transformation, only about 10% to 15% of his team’s time is spent on such infrastructure needs.
The success of the transformation also has proven that it can be done with minimal disruption to everyday operations and completed in a timely manner. Specifically, when Novelis started its digital transformation in March 2012, it was 20% virtualized across its 25 data centers. It reached 88% virtualization in 18 months and is now at 92%, the most Benson believes is possible.
British sports brand Manchester United wants to retain, grow and deepen it’s engagement with the current 76,000 fans who attend games at its home stadium and the 659 million others across the globe who follow it. It already engages with fans via social media, its official television channel, its website and an increasing number of mobile products.
Ian Fox, head of digital operations, says one of his top priorities is data analytics because the better the brand knows its fans, the better it will “allow us to engage with them…in a more appropriate way.”
Fox says the digital investment returns should show greater connects, unique website visitors and app downloads. Still, that’s not the only goal, he says.
“You can have a million downloads of your mobile app but very small engagement — and that would be missing the point. Having a million downloads and a million active users on a mobile app are much more valuable to the club, and to the partners and sponsors,” he says.
Priorities in the next 12 to 18 months include a greater web presence, a global mobile app and rebuilding the back-end technology infrastructure for both. Also on the drawing board is a type of “innovation lab” to explore emerging technology areas that support new fan experiences.
Ensuring digital pays off
Kalyan Kumar B (KK), executive vice president and CTO of ITO and Digital at HCL Technologies, says that any organization making digital investments must understand that justifying such costs are the responsibility of an entire company and not just IT.
Wind says external milestones must include:
- The percentage and growth rate of business that comes from digital channels and initiatives.
- The growth in the “share of wallet” that the enterprise captures from a customer’s spending in a specific area.
- The impact on the lifetime value of target customers.
Internal milestones must include:
- Ensuring that the relevant “digital elements” are integrated into strategy.
- Having “stretch objectives” on the number of engagements with online customers and followers.
- Ensuring that “digital experiments” are a key part of the business plan.
Businesses must also embrace a willingness to change, Kumar says.
“In some cases, they may end up rewriting the business model itself,” such as cannibalizing their current business to embrace a digital opportunity, Kumar says. “The problem is people are in the comfort zone of their legacy business.”Posted in Digital Transformation, Operational Excellence, Process Improvement | Tagged apps, best practices, cloud, hcl technologies, infrastructure, manchester united, mobile, networking, novelis, storage, website