Although all firms have been strategically focused on digitisation for a few years now, the challenges brought on by the pandemic pushed back the adoption of digital transformation schedules for many organisations. Given how essential it is to remain profitable and thrive in today’s business environment, the idea of digital transformation is moving from being a “nice to have” to a “need to have” in 2023. However, one inconvenient reality that continues to plague firms is the fact that many organisations still have widespread misconceptions about the whole idea of digital transformation.
According to Anand Mahurkar, CEO and Founder of Findability Sciences, the biggest myth is that digitisation means digital transformation, as both are two different concepts. Thus, businesses must understand the difference between digitisation and digital transformation. “Digital transformation entails transforming business processes and, often, the entire business model. When AI and ML can bring business transformation, it is a true digital transformation. Digitising some tasks is not digital transformation,” he explains.
Experts also assert that firms should desist from the temptation of doing 100+ pilots. While certain technologies will require small-scale pilots to determine feasibility, most organisations get lost in lots of pilots without a thought-through scale-up plan, say industry observers.
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Nishant Nischal, Partner at Kearney, a management consulting firm, says one prevailing misconception is that digital transformation falls solely under the purview of the chief information officer (CIO). However, he emphasises that the CEO should lead the digital agenda, as successful transformation requires buy-in from top decision-makers. Without aligning digital initiatives with overall business goals, it may become a CIO-driven agenda devoid of support from key business functions, he argues.
Another area that Nischal flags is the misconception around the idea of a perfect strategy to deploy digital tools, with no room for updates and modifications. In his view, the notion that a perfect digital strategy exists — must be discouraged, as there is no such thing as a perfect strategy. As the technology matures and evolves, so should the digital strategy, he asserts, adding that organisations should have a definite vision but not limit their imagination while execution. “CXOs often get stuck in endless cycles of discussions leading to an ‘analysis paralysis’ wherein the approach becomes a long drawn theoretical exercise with little action and, in effect, renders the exercise pointless by either diffusing interest or making such decisions too late to be of any value,” he adds.
Experts also emphasise that firms’ leadership needs to clearly understand and appreciate the difference between the two distinct concepts of IT and digital. This is because the existing IT setups generally have a lot of inertia to change and adopt the latest digital technologies. Separating digital from IT is necessary to bring in agile processes, governance and lean organisation methodologies. While certain platforms must be implemented to enable long-term digital transformation, one needs to run digital as a business or VC mindset with value driven stage-gate mechanisms, adds Kearney’s official.
As firms navigate their growth path while battling myths around digital transformation, experts say the challenge for traditional enterprises will be to create a robust data framework that will enable their organisations to utilise data effectively for AI purposes as more businesses look at AI projects to drive digital transformation in 2023.
Numerous organisations also rush to adopt digital tools without thoroughly evaluating their credibility. Kearney’s Nischal highlights that this phenomenon, known as the “Law of the Instrument” or the “Golden Hammer,” leads to instances where organisations misuse technologies like blockchain to solve problems that could be addressed using traditional distributed databases. He thus emphasises the importance of organisations for thoroughly evaluating the suitability of tools for specific challenges and avoiding the tendency to adopt trendy technologies blindly. Instead, he suggests firms should adopt the popular saying “find horses for courses,” which means selecting the most suitable solutions for each unique situation. By doing so, organisations can make informed decisions and avoid unnecessary pitfalls associated with following trends without careful consideration.
