We’ve certainly reached a tipping point in businesses looking to undertake digital transformation according to Gartner, a research firm, this sector is expected to be worth US$44 Billion into 2019.  In its simplest terms, digital transformation means leveraging technology in new ways to evolve a business model. But there are risks and sometimes such efforts fail. Here, we outline the three most important steps senior management should take before commencing on such an important effort.

1. Culture & Commitment: The number one reason transformations fail is people culture and commitment of senior management to see it through. Even for small to medium sized businesses,  who can benefit a lot faster than larger enterprises. Senior management should carefully consider the culture of the company. There are always office politics, silos and those are change resistant. Try to understand these issues first and foremost.

2. Technology Debt: Old email systems on dedicated on-premise servers, legacy databases with customer information, older software for various applications. All of these are considered technology debt. In almost all cases, a transformation will mean moving data from the old system to the new, whether it’s in the Cloud or on-premise or a hybrid. There’s going to be a cost. And the longer you wait, the higher the cost is going to be to make those changes. It can be a balancing act, but it’s crucial. Smaller businesses often don’t have the crushing technology debt of larger enterprises, but it can still cost. It needs to be addressed.

3. Research: A good digital transformation consultant will know this is also critical. As best you can, understand market shifts, what competitors and the industry are going through, what changes are and are likely, to happen. Look at potential threats from businesses that may try to disrupt yours. If you’re thinking to disrupt someone else, understand what they’re doing. A digital transformation is as much about business models as it is technology. Remember that technology has no opinion, it is neutral. It’s how you leverage technology.

Start with these three main points with the management team. From here, you’ll have a better idea of where you might want to go and what it might cost. It’s likely that once you’re into your transformation, you’ll need to make some changes along the way, so be prepared to be flexible, yet hold to the broader goals.

Giles Crouch is a Chief Information Officer (CIO) and digital anthropologist. He uniquely ties his deep knowledge of technology, marketing, design thinking and digital anthropology and as a polymath he helps clients seeking digital advantage in today’s complex world. Giles' initial years in business were in marketing communications in the technology sector. He also co-founded the Ice Awards for creative in advertising in Atlantic Canada. Giles has been regularly interviewed by international news media on topics such as social media, blockchain, artificial intelligence and their impacts on society. He is a passionate practitioner of design thinking and digital anthropology (netnography). Giles is prolific writer and public speaker, lecturer and keynote. He has also completed over 300 netnographic research projects since 2009. His secondary engagement is as Group Publisher with HUM@NMedia Inc., a Canadian health and wellness focused media company.

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