Reflections on Digital Trends for 2020: Five Lessons From 2019
The year 2020 is upon us! This is a year whose very name seems to inspire us to have a vision. As we move into 2020, I think it’s important to take a look back at what we have observed in 2019 particularly with respect to digital transformation. Past is prologue, and I fully expect to see the trends we saw emerging in 2019 become even more important this year.
This year, I observed that as more organizations engage in digital projects, more organizations realize that true digital transformation is elusive. For those that are beginning to serious about transforming their ways of operating, there are some common realizations which should guide any organization looking to “get real” with respect to digital.
I’ve tried to summarize these learnings into five lessons that digital pioneers have learned:
Bimodal strategies will not be sufficient for companies wanting to “win” at digital.
For transformation to succeed, digital has to be integrated fully into the business processes of a company. It is not enough to have a group that is digital while the rest of the company is more traditional. The “middle office drag” (where systems that are managed by the non-digital team become dependencies for the execution of digital initiatives) will become more prevalent and more of a barrier in those companies that attempt to operate bimodally. The winning strategy is to commit to transformation across the business.
Scaling digital requires integrating digital initiatives into a portfolio strategy, where digital is seen as one aspect of a broader value strategy for lines of business.
Digital initiatives should no longer be treated as different from other initiatives within the business, meaning that now, digital initiatives require the same ROI and business case calculations as traditional projects. Digital has matured to where it can no longer be seen as an experiment. Digital initiatives need to justify themselves; however, that justification must include the potential value either captured or added from the lines of business. The value of a digital initiatives is most often found in the improvement of business function, for instance, through an increase in productivity. From an IT perspective, digital is likely to be an investment. The winning strategy is to treat digital projects exactly the same as all other projects, but to make sure that the business case extends into the business and isn’t just focused on IT investment.
Lines of authority within digital delivery organizations will be diffuse, knowledge-based and collaboration focused.
Traditional hierarchical management styles don’t work with digital delivery organizations. Digital employees will be seeking mentors as much as managers, which means that the authority in the organization will often be focused on skills (who is the best at the job) rather than managerial skills. These lines of authority will function across delivery organizations in new ways, ones that don’t follow traditional hierarchical management styles. The skills to manage employees on a day-to-day basis will likely fall to the project or sprint leads and product owners, while the employee value proposition in digital organizations will be promoted and owned by a new set of leaders. The winning strategy is to nurture these non-traditional lines of authority while building an organic culture that supports the employee value proposition across the organization.
Data will be at the intersection of culture and technology and will need to be managed with an eye towards both.
Data privacy, data sovereignty and debates over the ethical uses of data have entered mainstream political culture in many countries around the globe. The outcomes of the cultural/political discussions will greatly affect organizations’ abilities to leverage data. Leveraging data will no longer be about just managing the architecture, the analytics and other technical components. Companies that want to win at digital must learn to navigate the cultural debates in countries where they do business. The winning strategy is to engage cultural stakeholders wherever a company operates to maximize opportunities and minimize risk with respect to data.
The gap between companies leveraging digital well and those who do not will grow even wider, creating massive first-mover advantages in industries not traditionally seen as technology driven.
Today, we see the gap between those who utilize digital well and those who do not creating significant business advantage. As the technology matures and scaling digital becomes more of a focus, this gap will grow even wider. As a result, those who are able to act fastest, whether with respect to new services, new revenue models or new business models, will have an even bigger advantage. I expect to see businesses that are not viewed as technology-centric begin to build disruptive business models in orthogonal domains, allowing them to leverage their leading position in less technology-centric domains into a leading position in more technology-centric domains. The winning strategy is to build capabilities in digital that encourage business creativity and the development of previously unseen sources of value.
At A.T. Kearney, we have developed a digital playbook, Integral, which will help organizations “be digital” as well as “do digital”. As we look to help organizations across industries and across geographies build digital capability and return greater value for their stakeholders, we will be encouraging our customers to understand the profound implications of these five lessons. More importantly, we will be ready with practical advice on how to implement what we see as the winning strategies for digital. Welcome 2020!
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This post was authored by Daniel Angelucci. If you want to get featured on our website please reach us at advertising@alltechevent.com
Author Details:
Daniel Angelucci
Director, Digital Center of Excellence, Asia
