Digital transformation is the current buzzword of virtually all organizations older than a couple of years. And for many good reasons; everything around us is changing at a pace it is hard to fathom. Everywhere we look a new technology or a new way of using technology is emerging and all future predictions only suggests that the technology development pace is ever increasing

It is a development and a race that no-one can afford to ignore nor refrain from participating in. Period. The transparency and ease of doing business across borders and industries(!) leaves virtually no industry or company safe from new and very agile competition

Imagine if you had to reinvent your current company’s business model from scratch. I’ll bet that you would see a lot of opportunities for improvements and a lot of processes, products (and people) that you wouldn’t need in a digitized new version of your company. This is the favorable situation that your new competitors are in. They don’t have the legacy that you do. They go greenfield, avoiding your mistakes, learning from your best practices while adding newest technology and management philosophies

They will be a worthy opponent to you from day one. And they’re coming – and probably sooner than you expect. Incumbents are still trying to figure out how technology advancements will shape their industry in the future and since they are established organizations with organizational and technological legacies, most will be incapable of reacting fast to market changes. This creates a window of opportunity for newcomers with no organizational baggage to drag along

Is all hope lost, then?

Of course not. But it is a very serious situation that you and your management team has to realize is clear and present. And you must acknowledge that you should act. Fast and immediately. I believe there’s two different angles to how to respond to the technological changes for a company and that the right method is determined by the organizational culture. Yes, you read this right. A digital transformation project is nothing more than another organizational change program in the likes of business process reengineering and turnaround projects – all aimed to get an organization in shape for the future

This is a very important point as the method used for the digital transformation project depends on the culture in the company and the employees’ (and management’s) willingness to change. If your organization and management team are reasonably agile and open to change, you should implement a transformation program that aims to bring in two-speed IT development; one track to deal with the ever-changing market demands and requirements and one track that keeps the core of the business – financial systems, etc. – steady and stable

Organizations with a strong culture against change – or with many internal kingdoms and networks – are better off going greenfield as the fight for change will be harder than the change itself. In this case, the efforts are two-fold as there must be a way of connecting the new and isolated unit’s core financial systems with the incumbents while at the same time keeping all processes, people and management completely separated from the parent organization (the incumbent)

It’s radical and the only way out

Being honest about your company’s real ability to deal with change is for me the only way to complete a successful digital transformation – it makes no sense not wanting to face the facts or not talking about the ‘elephant in the room’ as I’ve experienced so many times in my career. I bet you have too; everybody in the management team knows there is a situation that just keeps getting worse, but no-one want to deal with it, most often because of internal power struggles and internal political disputes

This is the real issue that any company has to address when talking about digital transformation; are we ready and are we even more importantly willing to begin the change? The program manager appointed to run the digital transformation program must be very strong with a rock-solid focus on the project and process. As this is a change program, the program manager will face an organization resisting changes and it takes willpower and determination to overcome this and make the digital transformation a success

There’s no easy way out on this, I believe. But it needs to be done if the management want the company to have a chance against the new and very agile competitors. I will guarantee you, that if they’re not already there, they will be sooner than you expect