Q&A: how to implement a digital transformation

Alex Burr and Martin Searle, Partners in our Sydney office, talk to business transformation leader Gerardo D’Angelo about how organisations can implement a successful digital transformation  

The driving forces behind an organisation’s pursuit of digital transformation can take many guises. For those in the banking sector, this might be the pressing need to overhaul legacy infrastructure and offer cloud-based products. For universities, it could be driven by student engagement and the need to offer increasingly digital services. In other industries, like private equity for example; firms are finding digital transformation a competitive advantage in pre-deal business analysis and due-diligence.

It is clear that, whether they are public or commercial, more and more organisations are trying to implement digital transformation. However, the digital transformation journey is by no means an easy one, and the failure rate far exceeds the successes.

As a provider of transformation leaders, digital change journeys and how organisations overcome the challenges of implementing them, is an area we have extensive experience in. I caught-up with Gerardo D’Angelo, one of our transformation leaders, to discuss the digital transformation landscape in Australia and how organisations can get digital transformation right.

Gerado has led multiple transformations as a CIO and is an experienced interim executive, having worked as an interim COO, CTO and CEO. Here’s what he had to say:

Alex Burr: What tips would you offer business leaders before they implemented a digital transformation programme?

“Whatever organisation you lead, you need to ensure you have a comprehensive view of your industry, the markets you operate in and the organisation’s strategic needs. Start from a position of knowledge about where you are and what you need, not a vague vision of what you would like the organisation to look like.

It's also especially important to understand the needs of internal stakeholders – that is the front-line staff, the managers and senior executives – and their appetite for change, along with that of the external stakeholders such as customers, suppliers, regulators and future target audiences.

Ask yourself things like, ‘are my legacy systems great but need broad accessibility?’ Don't do a digital transformation to simply wrap a new coating around existing practices or systems that won't scale and deliver future opportunities.”

Martin Searle: What are some of the most common challenges organisations face when implementing digital transformation?

“One of the most common pitfalls is poor research. I have seen numerous organisations jumping into a technology project to cut costs or generate improvements, typically as a standalone component, without much consideration for ripple effects and impacts across the organisation.

I also regularly see the theme of poor leadership. This can manifest itself in teams being given limited information and input but who are expected to deliver outcomes. Other issues include insufficient training and engagement from front-line staff to directors, and poor communication about the programme; typically, the first many know of a digital transformation is the day its revealed.

Worryingly, organisations still demonstrate little regard when it comes to the hiring of competent and experienced individuals – a poor tradesman never gets called back, and likewise, poor digital transformation managers move from one job to the next. Organisations should take the time to choose the right partners and key external professionals as these are the people that can either transform or destroy your organisation.”

Alex Burr: How would you define the current state of digital transformation?

“Digital transformation is still not very well understood. To some, it means moving everything to the cloud but to others, it means automating everything and removing human employees from essential roles.

Digital transformation is becoming increasingly hyped across almost every industry and is being used to resolve or disrupt the operations of many businesses. However, its main definition should still focus on whether new technologies and applications can help improve business practices and strategic aims. Ultimately, it should remove friction between people, transactions and businesses seeking to conduct trade.”

Martin Searle: How can organisations inspire their workforce to embrace and champion digital transformation initiatives

“You should seek everyone's input and suggestions; for example, it's amazing what can be learnt from the receptionist about digital transformation.

Likewise, organisations should invest in human capital, train all staff from any role or position and provide them with the opportunity and capacity to help disrupt the business. Don’t just focus on middle management; change needs to be an organisation-wide involvement. Be radical, transparent and honest about friction in the workplace and address any challenges head on.

Importantly, organisations need to communicate. They need to show and tell more often and as required by different business teams so the workforce has ownership and can feel valued – everyone wants to be part of a successful digital transformation.”

Alex Burr: Are there any digital transformation trends in Australia right now?

“The biggest trend in Australia right now is the take-up of cloud-based services as a part of organisation-wide digital transformations. This has however, created other problems such as cost savings not being realised in terms with the implementation of Amazon, Google, or Azure cloud suites. This is mostly due to ‘shadow IT’ and anyone in the business (e.g CMOs) being able to spend outside of IT budgets. Many businesses are seeing their total IT costs rising and are unable to clearly identify the original financial benefits. It also creates dependencies that didn't exist before and the need to rein in spending on other projects.

In terms of what specific sectors are doing, governments (state and federal) are finally jumping into cloud, either through SaaS companies or directly with cloud providers. However, the transition of going from legacy system to cloud-based system is increasing the number of security issues around personal data. Many public sector organisations should be leading in the digital transformation arena but are in fact playing catch-up; mainly due to the same skills and people shortages that everyone else faces.”

Martin Searle: What is the value in using an interim executive in the digital transformation process?

“The biggest value in using an interim executive is the ability to bring in expertise that has a fresh external to internal view untainted by the workings and politics of the business. By nature, these individuals are very comfortable to ask the question, ‘but why do you operate this system/process/function in this way?’ As a result, leaders almost immediately get new ideas and methods about how to run their organisation more effectively.

An interim executive is also outcome focused and targeted without any restrictive relationships within the organisation. It means they can challenge traditional (and sometimes outdated) thinking, strategy and direction without an agenda against people or the business.

The reality check an interim executive (or multiple complementary skilled interim executives) can bring to a business should not be undervalued as it represents a key step in ensuring
the right team and ingredients are in place for a successful digital transformation.”

For more information please contact Alex Burr and Martin Searle.