What Does Digital Transformation Have to Do with Me?

For decades, big bets in digital have been reserved for e-commerce businesses and software product companies. To a large degree, the rest of the marketplace has been able to avoid significant digital investments by leveraging the efforts of these companies to achieve internal benefits in operations, infrastructure, collaboration, and the like.

Regardless of the business you are in, the customers you are serving today are leading increasingly digital lifestyles. Their rising expectations have put you in a tough spot, forcing you to deliver your offerings as some kind of digital product. In other words, you are being forced to think like a software company!

For many IT organizations, the people, processes, and technology you lean on to buy, deploy, and manage products fall short when stressed by these new demands. Unfortunately, the business side has different but equally challenging limitations when trying to plan and execute digital product development initiatives.

How can IT and business work together on a successful digital transformation when they frequently act like they’re from different planets?

The Situation

Kenton, the “business guy,” is in a meeting with his client. During the meeting, his client notices he is entering information into a tool used for tracking, organizing, and analyzing information. After asking a few questions, the client asks if she could use the tool too, even offering to pay for it as a service. Excited by the opportunity, Kenton agrees to get his client a version of the tool she can begin using. Filled with enthusiasm, he heads back to his IT group to garner their support.

Conflict Narrative

Kenton: Hey, Ryan, I think I just uncovered a new revenue opportunity. You remember that tool I asked you to build for me last year? The one based on the spreadsheet I use for our client engagements?

Ryan: Of course I remember. I had one of my guys build it in his spare time and he almost quit trying to get it exactly how you wanted it. Why are you asking?

Kenton: My client just asked me if she could use it too. And she offered to pay for it! Even if we don’t charge for it, I’m thinking we could use the tool to extend our contact with her long after our engagement is finished.

Ryan: Kenton, what did you tell her?

Kenton: I told her yes, of course. I told her I would request our IT team to get her clean copy to install and use. Can you help me with that?

Ryan: Oh, no. Here we go.

Kenton: What do you mean? I don’t get what the problem is. I think this is awesome!

Ryan: That’s because you haven’t thought this through all the way. First of all, we created the tool for you, not for the client. If I had known clients might be using it, I would have done a lot of things differently.

Kenton: Like what?

Ryan: Well, to start with, it’s ugly. I don’t think it represents our brand very well.

Kenton: I figured you would be concerned about that, and I even agree with you. I already prepared her for that. She said it wasn’t a problem. So are we good to go?

Ryan: Because it was only going to run on your machine, we didn’t invest in setting it up for multiple users.

Kenton: I don’t see the problem.

Ryan: It’s a very basic app with a reporting tool I found. I’m not sure our license will let us put it on her machine—especially if we’re going to charge her for it. But let’s assume we can. Do you even know if she will be the only one using it?

Kenton: Um, no. I’m afraid to ask, but why?

Ryan: Again, because you told me you were going to be the only one using it, I didn’t invest in security or support for multiple users. Right now, if she were to install it on another machine, someone would have to manually copy the data to that machine. Changes on one machine wouldn’t sync with the other. Furthermore, she couldn’t limit what that person would have access to. This just wasn’t built for external use.

Kenton: Now I understand. This is not good news.

Ryan: And I’m just getting started. We don’t know anything about the environment at their company. What operating system do they run? What are their network security protocols? Even if everything were compatible, I don’t have the staff to install and configure it for them. And we certainly don’t have to staff to handle support questions. Sorry, Kenton, but I’d hardly call this an opportunity.

Resolution Narrative

Kenton: I get it. This is obviously more than simply installing a copy of the app. But I still see opportunity here that we shouldn’t ignore. Additional revenue and “sticky” relationships with our clients represent strategic value for our business. We’re all seeing more and more software tools entering the domain we work in, and some are being introduced by our competitors.

Ryan: I understand what you are saying, and I happen to agree with you. But this would be a really big change for us. We are not a software company.

Kenton: I don’t think we want to be a software company, but maybe the time has come to start thinking like one. I’ll make a deal with you. I’ll talk to my client and tell her that although we’re interested in sharing this capability with her, we need time to make sure everything works as expected. If I do that, will you work with me to figure out how we can do this the right way for her, and potentially for other clients too?

Ryan: I’m open to that. Do you have a plan in mind?

Kenton: We need the business case. I’ll also talk to a few other clients to see if they share the same level of interest. That will help us understand the real opportunity.

Ryan: Good idea. While you’re at it, try to uncover the basics on how they would use it. Then, I can recommend what we might want to build and how we would go about it, along with a high-level estimate.

Kenton: This is a great first step. Once we have a working theory for benefit and cost, we’ll know if there is merit in taking it to management for their consideration.

Ryan: Agreed. If they want to pursue the opportunity, we’ll work together to develop a more detailed plan on the business impact. We’ll address things like an increased budget for platform development and IT staff, technology support, maintenance, enhancement—even new roles and processes for digital product development.

Kenton: Right, and from the business side we need to consider product roadmaps, marketing and sales support, cultural impacts, and customer service.

Ryan: Sounds like an opportunity for the company—and for us. But it also sounds a little overwhelming. Let’s just start with the business case?

Kenton: Deal. Start with the business case!

Resolution Summary

While they may not recognize it, Ryan and Kenton are experiencing the growing pains of digital transformation triggered by the changing needs of their customers. For others, the catalyst may be a visionary leader or competitive pressure.

Regardless of your business, as digital tools and software technology play bigger roles in our day-to-day business procedures, some level of digital transformation is no longer avoidable.

Depending on an organization’s maturity, legacy products and services, industry, and customers, digital transformation does not always mean the same thing. However, when the time is right to embrace the challenge, every company needs to seriously consider the overall impact on the entire organization.

To get a quick gauge on your company’s readiness for a digital transformation, ask your team the following questions:

• Do we know how the initiative aligns to our business strategy?
• Have we identified and empowered a product owner or manager?
• Do we have a product strategy that includes:
• A clear business objective and outcome?
• A clearly articulated, compelling business case with knowable costs and benefits?
• A detailed product roadmap defining a core or minimum viable product and the timeline for additional features?
• A comprehensive internal sales and operational plan?
• An external marketing plan?
• A product lifecycle plan, including expected life span and sunset plan?
• Do we understand the impact on “business-as-usual” operations?
• Do we understand the cultural impact?
• What if the product is wildly successful?
• What if it fails?
• Will we need to reallocate the existing budget or even earmark new money for this work?
• Do we have the capabilities?
• Are the Marketing and Sales talent and systems in place?
• Do we have the necessary people, processes, and technology to build and support a technology product?
• Are we ready to support and enhance this once it is launched?

By understanding your company’s readiness, you can make digital transformation an intentional part of your business strategy with an owner, team, resources, processes and capabilities in place. With the appropriate level of planning, you’ll find that reinvention has never been more accessible.