Does abrupt digital adoption result in transformation or chaos?
Digital has captured the imagination of business and has become synonymous with every sphere of life. Yet, often, organizations approach digital in haste and overlook the need to develop a considered digital strategy. The result of this abrupt adoption can be digital chaos rather than digital transformation.
Enterprises want robust digital strategies and tools to be embedded in every part of their business functions. Consumers expect to be connected, informed and entertained, even as they save time, money and energy. And governments expect to be able to connect, enable and empower the people who they represent. Digital has moved from being a sideshow to the main attraction in boardrooms as leaders wrestle with the idea that either they embrace digital or become irrelevant.
Even as businesses run headfirst into transforming themselves into digital businesses to escape impending extinction, they might be rushing toward “digital chaos.”
Irrespective of the nature of the enterprise — local or global, private or public — there is a need to tread cautiously when adopting this disruptive technology. The power of digital needs to be governed and understood to the very core of the organization if misuse and chaos are to be avoided. Digital tools need to be aligned with the broader business goals if the essence of digital, as a concept, is to be captured completely.
Enterprises are eager to join the rush for digital
Many companies are so overwhelmed by the digital phenomenon that they are embracing the technology without understanding what their needs are and the best way to generate returns. They fail to understand which technologies should be deployed to suit the business’s requirements best and what kind of data needs to be analyzed. As a result, they are exposing themselves to multiple risks.
The inability of organizations to articulate clearly their digital enterprise strategy and digital governance approach is creating digital chaos. This is because, currently, there are no established best practices for how to digitalize a business, only a few scattered examples.
For instance, digital media enables a company to attract large numbers of customers by pushing communications via email and social media. However, if the right message is not communicated to the right customer at the right time, the posts will lose their relevance and become spam, leading to an unnecessary increase in the company’s costs.
Digital chaos can not only lead to reduced profits, it also risks enterprise goodwill and innovation capabilities. For example, one major India-based business decided to move to an app-only strategy on the basis that the bulk of its traffic came from mobile rather than desktop. However, the decision didn’t take into account an analysis of where users came from. Faced with potential losses in both sales and traffic, the company soon shifted back to a strategy that included mobile websites and mobile web apps
How can firms make sure they are benefiting from digital?
To drive the benefits from digitization, organizations should draw up a road map that puts digital thinking at the heart of the business. The objective is to define a clear digital strategy together with metrics that can measure the anticipated differential created by a digitalized versus traditional business. The expected return on investment should be calculated on implementation, as this will help the company decide on the feasibility of digital solutions (based on the nature of the business), secure money from investors and build a relevant digital strategy.
Data security is one of the key pillars of a digital strategy, as the threats of cybersecurity (e.g., identity theft, phishing, snooping and cyber terrorism) have become an increasing cause for concern with the adoption of next-generation technologies.
Digital governance is also vital, as it helps to establish rules and processes for sharing, editing, distributing and consuming data, thereby reducing the possibility of misuse. Many companies have appointed a dedicated digital leader who is responsible for closing the security gaps, formulating a digital strategy and dealing with client concerns for digital customer services. Typically, they will also ensure the organization is aligned to leading governance standards and frameworks, and will clearly segregate individual accountability to aid efficient governance.
A comprehensive digital governance model will require investment, but the benefits are worthwhile: improved performance, reputation and competitive advantage.
An additional consideration for organizations is whether to adopt a dual-speed IT operating model. This would enable CIOs to focus on an IT ecosystem that comprises rapidly evolving digital solutions and robust enterprise IT that would sustain core business processes. This approach would help bring an element of balance between the company’s current technology and emerging disruptive technologies.
Adopt digital, but with caution
Digital is no longer a distant dream. It is here. But any haste in its adoption can lead to more harm than good. A well thought-out digital strategy, together with adequate government support, can help organizations flourish in the digital era and translate their digital investments into tangible benefits