Digital Transformation 101: Insights from DX 2017

By Caroline White

Business leaders from across New Zealand came together to discuss their challenges at the Digital Transformation summit  in Auckland this month. The key themes were:

  • Understanding innovation and transformation and how they work together
  • Unlocking value by leveraging technology and new business platforms
  • Understanding changing audiences for customer-centric digital transformation
  • Recruiting and retaining the right talent and unlocking real competitive advantages

The Datacom sponsored event saw Brett Roberts, Associate Director of Datacom Auckland’s Digital, Customers & Collaboration Group, take to the stage for his keynote advising companies on how to drive an innovative and adaptive digital culture. Digital Transformation means companies need to act fast to ensure they aren’t left behind.

BrettRobertsDX2017CloggCloseupBrett Roberts speaking at DX2017. Photo / Scott Clogg: Conferenz

What is Digital Transformation?

Digital Transformation is the latest hot phrase to be bandied round in offices across the world – but it is also a commonly misunderstood term. Basically, it’s the act of transforming businesses digitally from end to end – from operations to infrastructure, meshing together technology, processes and people.

DX2017 featured 24 speakers in total, each offering advice that can be loosely packaged into five C’s: competitive pressure, the confluence of ideas, customers, culture and continuous learning, and finally the biggest C: communication.

Competitive pressure

Firstly, why do businesses have to digitally transform? Technology and innovation is moving at a faster pace than ever before. We live in an uncertain world – A study from the John M. Olin School of Business at Washington University estimates that 40 percent of today’s F500 companies on the S&P 500 will no longer exist in 10 years.

Foxtel’s Brett Cooper said digital disruptors are everywhere – the most well- known one for his company being being Netflix.

Competition has come from leaders who have shunned traditional business models and dared to do things differently – Uber, Amazon and Airbnb are just three examples.

Nicki Raistrick, Head of Digital at Fletcher Building looked at the same issue, raising concerns about traditional businesses making assumptions they shouldn’t. You may know the names of your customers and their likes and dislikes, but what do they really know about their customer’s customers – is there a new disruptor just around the corner?

Andre Guyer, Head of Digital Transformation for the Zurich Insurance, believes companies need to use money and experience as leverage against new entrants to their industry – to attack, rather than defend their market share.

New Zealand companies need to look at their products and services and work out where they are adding value to their customers – which enable them to innovate and provide a better service, and thus larger margin than foreign counterparts.

DX2017AudienceThe challenge of digital transformation – Brett Roberts speaks at DX2017. Photo / Scott Clogg: Conferenz

Confluence

At the heart of Digital Transformation is a triad, a confluence of people, business and process. It’s not possible to change one without considering impact on the other.

  • People – Robotics will feature heavily in the future, but nothing can substitute for the human brain. Algorithms are not the solution to all our problems.

Digital leaders still have a tough job in shaping the workforce of the future.  Traditional roles such as system administrators, operators, programmers, and help desk employees will decrease in demand and these people will need to be retrained and moved elsewhere.

New people for jobs which haven’t even been dreamt up yet will need to be sourced and an organisation is only as good as the people who work for them.

Quote of the day: “Never ever, ever, ever, ever, ever, ever, ever, EVER compromise your hiring.” Hire diverse people with good attitudes who are ready to slot into an innovative environment. And don’t be afraid to hire people who don’t fit the mould – the best innovations don’t tend to come from when people stick to the mould.

  • Business – Transforming to digital can often unearth all sorts of issues that weren’t apparent beforehand. Go back to basics, make sure the company vision is clear, and map out all your processes to how they would work in the real world.
  • Technology – Big data, blockchain, and artificial intelligence were all discussed prominently – and will need to be a part of any future plans.

Lots of companies are using all of these technologies already. Google Maps combines AI, robotics and big data. Starbucks and Amazon are teaming up for an AI, chat and voice app.

Trevor Delany, Head of Information Technology & Services for BP New Zealand said that customers had even arrived at its petrol stations asking to pay with bitcoins. It’s impossible to commit to all of the good ideas out there, but the smart people are those who see how this could fit into existing business models in the future.

Customers

Customers should be first priority for every organisation; but for many busy organisations, they are often the last. Every speaker at DX 2017 called for companies to be more customer- led rather than focusing strictly on products. Customer centricity was frequently discussed, especially innovation labs and collaborative programmes.

Culture and continuous learning

The one fundamental kickstarter is having an innovative culture. Allow everyone in the company to get involved and have their voice heard.

If staff feel are empowered in an innovative culture, they will rally and try to solve issues themselves. They certainly won’t sit by and let disruptors take over. Encourage staff at all levels to be curious and ask questions. You need to accept that you’re not always going to get it right – as Brett Roberts puts it ‘experimentation’, rather than ‘embracing failure’.

Don’t get complacent – embrace constant learning. For example, millennials often have a different way of looking problems compared to other generations. Don’t disparage that, encourage it. Datacomp, Datacom’s yearly hackathon has been so successful that it has become a blueprint for hackathons at other companies, such as Genesys and ASB.

And finally, the big C, communication

The overwhelming message from DX 2017 is to start focussing on people. A major part of that is communication.

Digital transformation is terrifying. Frontline employees can feel hopeless and removed from the decision making process. They’re often wondering: What is going on? Is my job safe? I’ve been here for 20 years – what are all these crazy decisions that the company is now making?

There will always be resistance to DX, said Gerard Smith, Senior Digital Manager for Teachers Mutual Bank.

You need buy in; to get your employees to embrace the model you’re trying to adopt. You need to educate and reassure them, and offer the appropriate training to enable them for the new model.

There is a human being behind every change the business makes, and they need to be engaged – help them celebrate successes, actively promoting your digital projects and highlighting the importance of the change.

My three takeaways:

  1. “A journey of a thousand miles begins with a single step” – Start with small changes and then work up. Review your legacy systems and grade the changes needed into levels of urgency and importance before implementation. If there is kick back from the top team, ask them what else they’ll spend their money on if it isn’t DX.
  1. DX is the whole package, not just the tech – people and business processes are just as important
  1. Uncertainty is a certainty –  Organisations need to be agile, nimble and ready to experiment or else they will die

What do you think? If you’re looking for some ideas on transforming digitally please email us at digital@datacom.co.nz.

Main photo/ Brett Roberts speaks at DX2017.  Photo: Scott Clogg: Conferenz

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