Forbes - Innovation

Digital Transformation Is Not A Technology Problem

Chairman and CEO of Inmar Intelligence. Former UPS & Dominos. Expert in investment, innovation, industry collaboration & corp. development.

Despite digital transformation spend predicted to exceed $2 trillion by 2023, at present, 87% of companies have not realized the full impact of their investment in digital. Companies obviously recognize the risk of not embracing it. A hearty majority are just getting it wrong.

Let’s be clear about the cost of getting it wrong. Consumers who had to embrace digital almost overnight to navigate a pandemic, lost wages, critical shortages on basic goods needed for their families and to educate their children won’t have much patience before they move on to the companies that will help them out by getting it right — regardless of what they’re consuming. Companies generally get that, and the money is being spent. The miss lies in the reality that digital transformation isn’t a technology problem; it’s a mindset problem.

As leaders, we must develop a strategy that embraces digital transformation in consideration of four key areas. Otherwise, we risk making short-sighted compromises that leave us scratching our heads as to why the myriad tools in which we invested haven’t delivered as intended.

1. Expertise. We can invest millions of dollars in millions of tools, but if the right humans with the right expertise aren’t in place to use the tools, ask the right questions and make the right connections, the technology is, at best, not very helpful and, at worst, dangerous and can lead us in the wrong direction.

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I recently had a firsthand view of this as we worked with a client to determine why some of their campaigns, using the same technology, delivered strong results while others did not. The answer came down to one person who was asking a lot of questions — the right questions — and, as a result, got more from the technology. The technology was the same, but the quality of the questions being asked was different. That’s the human factor, the expertise that technology cannot replace.

Another example: I am a pilot. In aviation, we talk about human factors more than any other when it comes to safety; airplanes are designed to fly, and they do what they are supposed to most of the time. From my training, I learned that the vast majority of safety issues in aviation were due to human factors. However, we can manage human factors when we deploy technology by developing a scorecard of the right questions — a checklist, if you will — where all campaigns are now positioned to extract the most benefit from the technology.

2. Measurement. If we truly care about continuous improvement, we must care about the clarity of measurement and prioritize outcomes rather than savings alone. Otherwise, money is spent blindly and arbitrarily. Although measurement was historically done in silos, digital transformation and meeting the expectations of today’s connected consumer require that all areas of measurement intersect. For example, it is no longer enough to measure basic safety, productivity and cost elements within the supply chain. Sustainability efforts and ingredient origin, once a focus only as part of supply chain operations, now intersect with the consumer experience and preference.

Arriving at a single source of truth is achieved through transparency — a new willingness to conduct commerce with trading partners. This is when everything that digital transformation can help us achieve will open before us.

3. Workflow. If anything paints a picture as to the degree to which some companies are lagging in their digital transformation, a report by the Association for Financial Professionals found that 42% of B2B payments in the U.S. continue to be made via paper checks even though the technology to enable digital payments has been available for a very long time. Consider that against a statistic from a survey we conducted of shoppers that found that “of consumers who have used contactless payment at checkout, 81% say they prefer it over cash.” Companies that do not offer digital payments could also see higher abandonment rates.

A company’s payment strategy is now its consumer strategy. The data gathered has shed light on evolving preferences and expectations, enabling companies to meet growing needs for personalization. Workflows intersect with the consumer experience.

Supply chain workflows also must evolve. Technologies cannot be stand-alone; they must integrate within an ecosystem to provide the full benefit. Designers of technology must ensure that it leverages a platform that is secure but allows for future additions as needs change or mature.

4. Orchestration. Again, we can buy all of the tools, but if the integration is not there and they are not working together, the ROI won’t be what it could be. During the pandemic, consumers increasingly bought across channels (online, mobile, in-store). The trend toward an omnichannel consumer experience is not going away. Shoppers want the companies with which they interact to know them, their needs and their preferences — whether they are in a store, on their computer or on their phone. A seamless experience is the key to shopper engagement and loyalty. 

Technology innovation continues to accelerate, and while speed, computing power and data storage will continue to decrease in cost, the resources to create tech-enabled solutions will be constrained. Choosing platforms rather than point solutions will be critical, as they can allow for economies of scale in software engineering and can enable the experts in the arena — whether retail, supply chain or healthcare, for example — to do the work and critical thinking versus each company undertaking all aspects alone.

Digital transformation holds the ability to improve the human experience at a rate never before seen, but it must permeate our business. The responsibility does not rest solely in a company’s technology organization. We will realize its complete value when every decision is made with it as the North Star.


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