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The 10 Principles of Digital Transformation
The following is an extract from The Practical Guide to Digital Transformation.
Digital transformation means using the power of technology, data and digital services to change an organization or system for the better; to be more user-centred, more secure and with a greater focus on delivering value to users, shareholders and wider society than ever before.
Here are ten principles that should guide your thinking as you embark on your digital transformation journey.
1. Put all users at the heart of your thinking
User-centricity is transformational. It means placing the needs of real people first, beyond any technological or bureaucratic considerations. Your digital roadmap will be explicitly developed through real and thoughtful engagement with your users. By being user-centred you will delight those that interact and engage with your products and services. You will remove waste from your organization by deprioritizing things which don’t add value to users. And you will be agile and responsive as user demands change over time.
A progressive digital organization will make brilliant digital services for all of its critical user groups. This will undoubtedly include end users – usually customers – but also may include internal users, regulators and even suppliers. The more user-centred you are for all, the better.
2. Set a vision and iterate towards it
A digital vision sets out a series of objectives and outcomes. It will be informed by a combination of deep user research, market and competitor analysis and underlying business needs. The vision will be time-bound and should put markers in the sand – stage gates – at which points you should evaluate progress. If your digital vision is too prescriptive, it risks failing before it has even standards. The field of digital, data and technology is constantly and rapidly changing. You need to make a virtue of its dynamism.
The best way to deal with this rapidly changing landscape is through iteration and experimentation. You need to rid yourself of rigid expectations. Focus on outcomes more than the minutiae of deliverables. If you do the latter, you immediately risk breaching our first principle, because you are assuming you know what users think and want from the outset. So, welcome the uncertainty, keep your eyes fixed on achieving your end goals, and enjoy the ride.
3. Embrace agile ways of working
Agile ways of working will make your digital transformation efforts nimbler, cheaper and focused on meeting user needs. Agile accepts that much of the world is complex, unknowable and unpredictable.
To contend with these challenges, agile approaches place primacy on minimal viable product (MVP) development. For any technology project – be it an end-user device roll-out or a machine learning algorithm – MVP thinking means you should start small, test continuously with users, iterate as necessary and only scale up if and when ready. In doing so, you will kill a lot of ideas and stop a lot of projects. But remember: it’s much better to stop something that’s never going to work sooner rather than later.
4. Fund with failure in mind
The reality of doing anything new and different is the very nature of change means that it won’t always work. Even rolling out established technologies can bring unexpected hiccups. As such, when you’re preparing budgets for digital transformation make sure three safeguards are in place.
First, don’t over-promise the potential benefits of your work. Whilst this may help to get a business case through in the short term, in the longer term you’ll live to regret the unrealistic expectations hanging over you. Second, always apply optimism bias to your forecast costs. This will give you a buffer if things go awry. And third, try and break down the work into chunks. This should allow you to call it a day at various points if necessary. When you do, make sure you learn lessons from what did and didn’t work.
5. Get the right skills and talent in place
Just as you wouldn’t ask a gas engineer to paint your house, you shouldn’t ask an IT project manager to code software. Yet, many digital transformation efforts go wrong through simple category errors: by assuming that all “digital” jobs are alike and that by cobbling together a rainbow of random digital professionals you can make some magic happen. Instead, you need to carefully work out, based on your digital roadmap, what skills you need, from whom and when.
Doing so should present big challenges to your established business model. But don’t be put off by these big considerations – it’s essential you confront them head-on. Without the right people, you’ll never make change happen.
6. Focus relentlessly on the data
In its most simple description, digital transformation is about using data to improve the lives and experiences of people. Everything in the digital world - hardware, software, sensors, transistors - ultimately boils down to sending, manipulating and receiving data. This data is encoded as binary digits - 0 and 1 - and from this everything follows.
As such, you need to constantly have in the forefront of your mind questions about the nature of the data your systems use, create and interoperate with. How do you know that your organization’s data is of high quality and integrity? How can you best use the data to improve the operations of your organization? Who has access to your data and do you have the consent of the individuals from whom the data is derived? All your technology stack considerations should be based on answering these questions. Without good data, you can’t achieve anything.
7. Expect to be attacked
Just like an office anywhere in the world will have physical security measures in place, every organization should also have digital security measures in place too. The rapidly increasing volume of cyberattacks means it is a question of when, not if, your organization will experience some form of attack. You may already be under attack but you just don’t know it yet.
Your cyber defences need to plan for multiple scenarios. You need to know what to do to protect yourself against such scenarios, but also what to do if you are the victim of an attack. Whilst much should be done to protect your technology infrastructure, don’t lose sight of the fact that the weakest link in your organization is almost certainly your employees and how they interact with your organizational infrastructure. Train them in cyber security best practice. Remind them. Audit their practices. Remind them again, and so forth.
8. Always do the right thing
Your transformation should be ethical by default. At minimum, you need to comply with all regulations and laws. This should seem blindingly obvious, yet the history of technology is littered with firms that have failed to meet this most basic expectation. Beyond this, you need to remember that you are undertaking a digital transformation for the future, not the past. And as such, your ethical considerations need to be for the world as you wish it to be, not as it has been.
Eradicating bias from your processes. Fostering a diverse and inclusive workforce. Breaking down gender barriers. Helping tackle the climate crisis. Contributing to local communities. These are a non-exhaustive list of issues you need to be proactively addressing. Remember that in a globalised, platform-based world, you will undoubtedly rely on a wide range of suppliers. It’s vital to keep an eye on your suppliers to ensure that they too share your values and ethics.
9. Make your positive contribution to the digital world
The modern internet era was founded on principles of openness, transparency and sharing. It would be fair to say that the current digital era does not quite represent the desired aspirations of the early internet innovators.
Whilst you don’t necessarily need to only adopt open-source technologies (though there may be much merit in this), you should make sure you are making a positive contribution to the digital world. This means sharing code, insights and learnings openly. It means being open and transparent with your customers about how you use their data. And it means building and facilitating connections between different systems and networks outside of your organization, to the end benefit of users.
10. Look to the next horizon
The pace of change in the digital world is frighteningly quick. This matters especially because your customers will engage in technology in all parts of their life and so a significantly improved experience in one field is likely to lead to heightened expectations in another. In short, you can’t stand still. You need to always be working hard to improve things for users.
This can be a challenge to many organizations. It might mean cannibalising existing customers or shutting down profitable services because you’re building something even better. It will mean constantly staying abreast of new trends; curious but not naive about their potential.
Daunting as this may seem, it should also be exciting. The digital world is full of possibilities to make things better. And these possibilities should always be open to you.