Change management is the key to digital strategy
Originally posted by James Dunn @ afr.com
Picture: AI has been with us for awhile as evidenced by IBM's Deep Blue beating world chess champion Garry Kasparov back in the 1990s Adam Nadel
Digital success means having a really disciplined approach to innovation, says Boral’s executive general manager, transformation and innovation Paul Dalton.
He says it’s about acknowledging not all innovation works and it doesn’t always make sense if the customer doesn’t want it “so let’s find out what the customer wants and then do that”, he says.
Dalton says digital is “just another tool” to the modern enterprise.
“The important part is how you use the tools. Just plonking the new tool in front of someone and saying. ‘There you go, your world is now 15 per cent better,’ isn’t going to work.
“Your people are still the glue that connect all the systems together: you need people to say, ‘How do we best use this tool – are there ways to use it that we haven’t even thought of, that are even more efficient, more productive or give better quality or better service outcomes for our customers?’”
According to Dalton, organisations need people talking across teams, breaking down silos, talking to suppliers and customers and to people outside the industry – the great organisations have always done that over time.
“The digital part just enables you to do it better. The challenge is not just getting caught up in the sexiness of the technology.
Understand your objectives
Schneider Electric’s digital services director Jacek Krutak agrees digital transformation won’t work if the focus is just on the tools.
“A successful digital enterprise is the optimal combination of people, systems and processes that will enable an organisation to profitably grow in the current digital world,” says Krutak.
“Too often, people focus on tech for tech’s sake.”
For Krutak, becoming a successful digital enterprise starts with a clear understanding of the business’ objectives.
“The trick is not to develop a digital strategy, it’s to develop a business strategy for a digital world.”
This transformation may include introducing new tech – because there is more of it and it’s cheaper – but the tech on its own, without the underlying changes to business processes, and change management, is going to fail.
“Common new tech elements will include effective use of AI and machine learning and augmented reality, with cyber-security underpinning it all,” Krutak says.
“It is interesting, because these things are not new, in many cases. In fact, we’ve been in the business of connecting things to other things and connecting things to the internet for about 30 years.
“For example, in regard to AI and machine learning – Garry Kasparov [then world chess champion] lost a chess game to Deep Blue [an IBM supercomputer] in 1996.
“Augmented reality is also not new – but what is new about these kinds of things is that they are at everybody’s fingertips today, in their phones, and their ability to really empower people.”
Human element key
All of these tools give organisations “incredible capabilities”, says Krutak. But unless these capabilities are linked closely to – and become part of – an organisation’s people, systems and processes, the benefits will not be harnessed.
“The technology adoption will fail if the human-centred element is not present in the design of it.
“Just putting tech in, and connecting everything to everything else, is only part of the answer. By some estimates, only 1 per cent of the data that industry generates is used in making decisions.
“You can put in as many sensors as you like, but unless you do something about that data, and convert it into knowledge and ultimately, wisdom, it just becomes pointless,” Krutak says.
Catherine Caruana-McManus, director of strategy at Meshed, an Australian based Internet of Things integration firm, says the successful digital enterprise understands, and is engaged with, the impact of the digital world on it.
“You need to have an executive management team that understands digital, and is actively engaged with understanding the impact of digital disruption in their business.”
According to Caruana-McManus, businesses need to be looking holistically at the digital impact across the entire business and, importantly, looking for the potential next disruption within their industry.
Ultimately, says Caruana-McManus, the biggest challenge with digital innovation is change management – and without senior management buy-in, “it’s really difficult to make it happen," she says.