Success factors for digital transformation
Digital transformation in organizations is being driven by shifting customer expectations. The problem is that the existing ERP and CRM applications silo and trap data, holding organizations back in their efforts to meet changing customer expectations. So organizations need to shift:
Reactive action
Proactive action
Siloed view
Connected view
Reporting activity
Delivering outcomes
Technology is an important aspect of helping organizations make these shifts. In fact, Dynamics 365 directly enables organizations to make those shifts. But technology alone is not the key to successful digital transformation.
Digital transformation can fuel the success of an organization and allow it to achieve real, tangible rewards. But it can also fail. So why do some organizations succeed while others do not?
Let’s take a step back for a moment to answer that question.
Four factors common to successful digital transformations
Regardless of the industry, every organization is trying to drive constant value generation. The purpose of a digital transformation is very simply a process to help your organization find new ways of generating value. Microsoft’s point of view is that digital transformation is first and foremost a people story. It’s about people plus technology. By thinking first about how we can help people to achieve more, we can then leverage technology as a tool that enables value generation. It is by thinking about amplifying and empowering people that organizations can transform ‘what is’ into ‘what could be’.
Based on the experience of supporting thousands of organizations with their digital transformation journey, we have identified four areas that the most successful organizations are focusing on.
Vision and strategy
Vision is perhaps the most important. It’s what directs successful organizations towards a single north star. The vision is fully articulated in their strategy. It tells everyone in and surrounding the organization what they are truly working towards. And in every case, successful organizations have a vision that tap into human ambition and spark imaginations. Their vision and strategy is key to making the roadmap, which clarifies how they will realize, or work towards, their vision.
Culture
We see that organizations are best able to go through a transformation when the people inside it are unified and working with shared values and ideas. They have a culture that keeps their team connected, and key for a transformative process, is elastic enough to respond to changes as they come up. We notice that organizations whose culture continually invites change – and accepts the diversity of personalities, ideas, and approaches required to drive an organization forward – are those that do best with transformation. That’s certainly been the case with us.
Unique potential
We see that organizations that can uncover their unique potential are more likely to make great strides forward. Every organization has a set of unique assets, or what we’d traditionally call a core competency. The art here is to find the specific change that can unlock this potential in a different way. This ‘unique potential’ can be found in a variety of forms - depending on the industry and the organization - and it manifests in different ways. For some organizations it might be found in their physical assets, like retail locations and proximity to customers. For others, it might be a special IP, or it could be the way their workforce is deployed. This potential is prime territory for technology to help unlock value.
Capabilities
We see organizations that do best are thinking about and continually developing a wide range of capabilities. They are on a journey of looking at their human capabilities: putting the right people with the right skills in the right position, and helping them grow. They are looking at operational capabilities: having the processes and tooling that enable people to execute in the right way, at the right speed. They are also looking at technical capabilities: ensuring they have the appropriate technology deployed, so that their people have what they need to do great work. And today, more than ever, successful organizations are looking at their AI capabilities. These are the new, powerful breed of capabilities that allow them to make better decisions, to reduce friction in a number of ways, and enable them to free up their people to do more valuable and impactful work.
The organizations that are successfully going through this digital transformation journey are the ones that understand that this process is not about adding technology, but of supporting their people to create the value the organization seeks. They look at vision, strategy, culture, unique potential, and capabilities as the foundational elements first. And then they look to technology with a specific role in mind.
Next, let's look how Carlsberg and Ørsted have managed their digital transformation journey with Microsoft.