Determining a digital direction: Balancing risk and opportunity in digital transformation

The 10 pitfalls of digital transformation - #2: What success looks like

Digitalisation has never been so important. In every sector, businesses are realising the advantages of implementing new digital solutions, which can increase productivity and efficiency, open up new streams of revenue and enhance customer experience. However, each digital investment decision carries its own risk and may determine whether a business thrives or fails in the long term. Leaders must also balance digital innovation with robust IT infrastructures that are secure and scalable.

We are finding that challenging digitalisation choices are becoming an inevitability of doing business, and organisations must navigate between risk, opportunity and cost to determine the route to digitalisation that will most benefit them. So what is the best way to pursue digital transformation?

Where the value lies

Fundamentally, digital strategy should be innately aligned with business strategy. Digitalisation enables businesses to focus on high-value differentiating activities, by automating low-value ones. Therefore at the outset of any digital planning, businesses should consider where they derive the most value and where there is scope for increased efficiency. For example, social carers deliver the most value during face to face time with families, and not when they are dealing with administration. Using digital to automate and streamline back end administration will bring benefit by maximising the time that social workers can spend on the human side of their job. Whereby maintenance teams deliver the most value when they are executing repairs, rather than spending time tracking the equipment in their vans. By focusing on value, leaders can ensure that digitalisation is as impactful as possible.

Data, data everywhere

Data is possibly the most valuable asset of the digital age. Through the growth of low cost sensors and connected items (the Internet of Things), businesses have the opportunity to gather data from new sources and on an ever-growing scale. Organisations must take advantage of this data to gather as much information as possible about their operations. Analysing data can help leaders to see where the greatest value is derived and where efficiencies can be made, and ultimately inform company strategy.

Valuable data can be collected and applied in unexpected places – for example, high street shops. For retailers, information about shopper behaviour and engagement is extremely valuable for optimising consumer experience in-store and anticipating operational needs, such as the number of staff needed and the levels of stock required. Fujitsu has worked with a major international clothes retailer to implement advanced shopper analytics, which enable the chain to respond in real time to store traffic and develop more relevant, context-aware promotional content to personalise shoppers’ experience. Ultimately, this data will help to improve shopper satisfaction and the bottom line.

Connecting the dots

Digitalisation can also bring organisational benefits. End to end digitalisation enables companies to act in a joined up way, eliminating business silos. Front end customer service can be linked to back end systems, enabling better connected processes throughout the business. This can not only enhance customer and user experience, but enable organisations to more easily apply the right level of security and governance to data resources throughout the entire IT infrastructure. By planning with a focus on these business-level benefits, organisations can maximise the value of their digital strategy.

Freedom to innovate

The rise of digital has brought a further key benefit for businesses – the ability to innovate, more quickly and cheaply than ever before. Agile technology means that innovation that used to take months can now be undertaken rapidly, with low expenditure. This means that organisations should not be afraid to test and learn, in order to identify high-return digital approaches. Experimentation can form a very rewarding part of digital strategy, as long as businesses are prepared to accept that not every project will succeed.

In the long run, the winners in this digitalised world will be the ‘digitally-balanced enterprises’ that closely align their strategy with the business, using digital assets to truly add value to their operations through increased connectivity and insight. Digital shouldn’t be daunting; it can enable businesses to benefit from complexity, realise new opportunities and ultimately thrive.

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