Digital Transformation: Investing in the Process

Digital transformation is an organizational investment in people, technologies, data, and processes required to ensure a company's ability to deliver products and services at scale, while establishing sustainable delivery capabilities amidst rapidly changing economic conditions.

At the heart of digital transformation is the Process. If a company is considering digital transformation but isn’t willing to invest in a structured process (agile being one good example), the scalability and sustainability of digital transformation are in jeopardy.

Challenges

Two challenges exist across industries and perspectives. Challenge #1 – Companies want it all; and Challenge #2 – Companies don’t completely know what they want.

George Westerman, MIT principal research scientist and renowned expert on digital transformation, has written a great book titled Leading Digital: Turning Technology Into Business Transformation. It defines digital transformation as a radical rethinking of how an organization uses technology, people, and processes to fundamentally change business performance.

Back to Challenge #1 mentioned above, a lot of companies want the technology aspect – new investments, acquisitions, innovations, etc. They will also look to hire the very best talent; specifically, people with deep experience in defining technologies that will help both define and navigate the roadmap to digital transformation. For Challenge #2, oftentimes companies are busy investing in services, tools, and capable resources and may not have a clear understanding of what they’re trying to achieve. New technologies and new hires help create buzz and generate some PR wins, but in the end, they are just acquisitions if there is no investment in Process.

Digital transformation can be leveraged by companies of all makeup and sizes. Throughout our current pandemic, few companies have thrived as much as Kroger. Kroger’s success is largely due to the digital platforms that have allowed customers to shop for essential grocery items through the company’s portfolio of commerce applications. Kroger was prepared to meet the supply and demand immediately, but not entirely because the company had invested in robotic equipment to auto-pack groceries in large warehouses, or because technologically enabled driver-less vehicles were used to make deliveries. However, the success was only partially due to the digital applications.

Kroger was ready for the customer demands of the pandemic because the company invested in Process. The company's focus on digital meant that all teams would shift from a technology-led group (i.e., list of to-do’s, do them, move on) to group-driven by Objectives and Key Results (OKR) methodologies. Companies such as Google, Amazon, and also Spotify implore OKRs, which help to define scalable delivery processes that allow for teams to meet/exceed target goals. Kroger’s digital teams shifted to two-week sprint delivery cycles that allowed those teams to dedicate weekly time to discovery, design, iterative work, and testing (with actual product users) pre-deployment, instead of testing in the market, post-deployment. The shift allowed Kroger to become proactive instead of reactive.

If companies aren’t willing to invest in Process, they are likely to not see the holistic vision of digital transformation fulfilled.

Trends

1. Building resiliency

As mentioned above, companies are looking to build resiliency in the digital space so that they can withstand volatile market shifts and customer demands/needs in a rapidly changing landscape of commerce and other digitally dependent needs.

More and more, Process investment is proving to be invaluable for the companies that must remain resilient in the current digital landscape so their product/service can not only meet the customer demands, but provide essential support to customers.

2. Headless commerce

User behaviors in commerce have driven the acquisition funnels into a broader space, one that includes smart devices, public-access kiosks, voice recognition, and other forms of technologies. Headless commerce has de-emphasized the traditional “front end” experience (think landing page or mobile app) so users can enter an acquisition funnel from multiple devices and without having to touch a keyboard. This architecture is built upon APIs that synchronize back-end data models with cloud-based frameworks.

If Trend #1 (Building resiliency) is more of a necessity than Trend #2 (Headless commerce), both trends (in tandem) are swiftly becoming the expected output of any eCommerce initiative associated with digital transformation.

It is also worth noting that the OKR shift, while not a new trend, is spreading across more and more companies. This helps to ensure that digital transformation delivers to the consumer need, as well as the process and technology investments needed for sustainable and scalable digital solutions.

In closing, true digital transformation is the result in an organizational commitment to processes that allow companies to scale practices, drive innovative solutions, and deliver products and/or experiences that enable the end users. It is the process investment that will allow companies to remain both agile and innovative in an ever-challenging world of consumer experiential needs and demands.