It’s amazing to me how many conversations on Digital Transformation confine themselves to the technology aspects of transformation alone. Technology is a driver and an enabler but the real innovation comes when companies determine how these technology elements will get applied to transform business endeavors. The markets you participate in today and have the opportunity to possibly contribute to tomorrow is the real transformation conversation. Digital is already causing disruption across industries to products, services and entire markets so how can you be sure that your investments are targeted enough to capitalize on this newly minted trend? I believe that paying close attention to these 4 areas can help businesses leverage the promise of IoT connectivity and should be the basis of any technology implementation.
Think Strategically About Markets and Your Business –Transformation enabled by the IoT will give rise to a portfolio of projects impacting many different aspects of a company. Ensure that the efforts are coordinated around a business objective and accompanying strategy to help focus and coordinate the key decisions and functions involved. Determination of appropriate investment levels by function will be critical to the overall success of the strategies. Feature and Technology development that for years led the way to market share may be giving way to services and experiences based opportunities that digital technology makes possible. Product Technology alone may no longer be the road to the customer, so the company strategy has to evolve to the next level of sophistication. Make sure the plan comes together at the top levels and that the various functional parties have alignment and awareness of each other. All functions must have an appreciation and a commitment to the business objectives at hand. Push the businesses verticals to focus on the business opportunities and let central groups like IT determine the common technology elements to avoid wasteful and endless technology preference discussions. The fundamental discussion needs to be focused on delivering the business objectives and strategy!
Here is an article I wrote for CIO Review on Product Features becoming less of an emphasis.
Look broadly at the opportunities at hand. Recognize that IoT opportunities can transform many parts of your business. IoT based transformation initiatives can improve internal operations, improve products, create new business models and enhance the customer experience when combined with products and services and market eco-systems. Take the time to explore how the availability of data can impact these various areas and invest carefully during the portfolio process. Embrace the low hanging fruit like optimizing service through remote access but reach for bigger opportunities like selling the customer operational consulting based on the data that is being collected. Don’t be afraid to do something bold. Digital is changing the world in bold ways and bold thinking may gain you a new foot hold in the digital economy.
Focus on maturing Cross Functional Team Management- Appreciate that most IoT projects cut across many functions and will require mature cross functional coordination as a critical component to success. Establish good governance and integrated Stage Gate/ AGILE processes and deliverables to make sure that people are engaged and working together across functions. An integrated methodology will help teams make well informed decisions at the project level creating success at the portfolio level. Avoid arguments that revolve around “turf” in favor of cross functional team efforts that include R&D, IT, business, process improvement and operational resources. Digital is disruptive, disrupt your internal boundaries first and reward the teams that play well together!
Break traditional silos that impact portfolio allocations – Silos depend on baseline budgeting so shake up the money tree and rethink investment balances! Investments will shift towards new opportunity spaces that enable innovations for your customers and your operations. As an example, R&D resources that may have always worked on feature development may find themselves working on analytical modeling that will help predict the failure of a component so that service can save money and customers can avoid downtime. This requires a critical shift in thinking away from pure feature development to a more balanced customer focused perspective. Many organizations will get this wrong at the beginning. Traditional silo mentality and current momentum are the enemies of digital transformation. Engage your teams and make sure all knowledge workers truly understand the opportunities that IoT and data can bring to the enterprise. Make sure investment “baselines” are challenged and ensure that funding and resources truly find their way into the IoT portfolio!
To close the promise of IoT and Digital technology is an important but secondary conversation to the broader business challenges that digital brings to the forefront in any transformation conversation. Organizational change management, strategic thinking, leadership and program management may well turn out to be the real enablers of digital success at many companies working to transform and gain the promise that connectivity makes.
What ideas do you have?
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