It wouldn’t be an understatement to say that the events of 2020 have forced most businesses to step up their plans for digital transformation, both in terms of timeframes and scale. Whether it’s beginning their journey into remote working, or making wholesale shifts to the way they operate from product development through to customer service and delivery (e.g. taking a digital first approach), there are few businesses who aren’t undertaking some level of transformation to automate processes and move into the digital world.
However, making the decision to undertake a digital transformation and choosing the technology you need will only take you so far towards your goals. It’s how you undertake the transformation that determines how successful it will be.
When faced with implementing something new, we are naturally drawn towards ways of working that feel familiar, such as the waterfall project management framework. We set our goals and objectives, plan our actions, allocate tasks, follow that plan until all work is complete and end with a big launch. It may seem prudent to follow this tried and tested method, however the very concept of digital transformation necessitates experimentation and continual improvement, and therefore needs a different approach.
Agile itself isn’t new, but it is still largely considered a methodology that belongs in software development. We believe that using this methodology with the right tools for your digital transformation on an organisation-wide scale, regardless of your industry, can deliver better results more quickly and set you up for greater success in the future.
In this post we look at what digital transformation is, how to do it well, and where Agile fits in.
What is meant by digital transformation?
First, let’s make sure we are on the same page. When we talk about digital transformation, we mean the ongoing strategic and tactical digital evolution of a company, business or process. It’s about reconsidering what your core activities are and how you operate and then looking at how to digitise your processes – from basic things like a website and marketing, through to product or service development, distribution, payment systems and even HR.
Digital transformation isn’t a once-off event to automate manual processes – as customer expectations increase in line with technological advances, enterprises are faced with waves of digital transformation requiring them to move to new platforms, re-tool or consolidate their current technology. I’ve been in software development for 25 years and I’ve seen it change drastically each year, from basic coding to new languages, the advent of cloud computing, new development tools and the use of scripts, it hasn’t stood still.
Why do we need to undertake digital transformation?
Digitisation helps companies become more productive without sacrificing quality. Done well, it vastly speeds up your processes, reducing handling time and effort for each customer interaction thereby reducing the cost – all factors which improve your customer and staff experience and deliver value to your bottom line.
Critically, digital transformation allows organisations to innovate faster so they remain competitive. From rapid technological advances to economic turbulence and changing consumer preferences – there is so much that can disrupt your industry. Continual digital transformation gives you the capability to adapt and thrive in the face of change.
In an environment where customers now demand contactless purchasing and service experiences, digital transformation is a matter of survival. We are reaching a point where there is a clear divide between the digital ‘haves’ and ‘have nots’ – businesses who have not embraced digital transformation risk a significant decrease in business value and market share.
How do you know if you are a ‘have’ or a ‘have not’? By understanding where you are on what we call the digital transformation curve.
The bottom of the curve starts with businesses with no or very basic digitisation (e.g. Excel spreadsheets) and tracks upwards to those organisations who take a digital first approach to their entire operation (e.g. most or all processes are digitised and can be completed remotely). We suggest benchmarking yourself against competitors in your industry to see whether you are leading or lagging.
Where your business sits on this curve after you begin digital transformation largely depends on investment – as you invest more, you’ll move further up the curve. The aim is to continually transform in response to market trends so that you are placed ahead of your competition, or at the very least stay in line with them. This could be completely overwhelming, however Agile makes continual digital transformation part of ‘business as usual’.
Why should we use Agile for digital transformation?
In the simplest terms, Agile is a project management methodology that uses an iterative approach to allow teams to deliver value more quickly and accurately.
Agile is great for any business embarking on digital transformation, wherever they are on the curve, for a number of reasons.
1) The phased nature of Agile means that it’s a low risk way of undertaking transformative projects.
Agile requires that you make changes in small, useable increments so that you can receive feedback quickly to determine whether they are working or not and make corrections as needed. This means you avoid the high risk of wasting financial and human resources that come with implementing large-scale changes in one go.
2) Agile helps staff to adapt to change more easily.
Large-scale organisational transformations naturally cause anxiety for staff, even if a best-practice change management strategy has been followed. The great thing about Agile is that smaller steps allow staff to adjust to, and test, new technology and processes in bite-sized pieces before anything is locked in. Furthermore, the try and test nature of Agile means that their concerns can be voiced throughout the transformation when action can easily be taken.
Using Agile for digital transformation and beyond, however, does mean a cultural shift is needed towards a more empowered, collaborative way of working that prioritises accountability and transparency. For more traditional organisations who have, up until now, worked in a stable, hierarchical environment, this can be more difficult.
CMS Wire author Charles Green reflects on this point: “This is one reason why when implementing the methodology, it’s important for everyone — from management to individual contributors — receive training, so they understand what the change means and why it is being implemented.”
3) Agile encourages experimentation by making failure acceptable.
Failure is not generally an acceptable outcome in traditional working environments. The irony of digital transformation is that while we are working to create easier, more productive and profitable ways of working, often it ends in dissatisfaction and, to some extent, failure. Agile’s iterative nature, means that experimentation is encouraged as failures can be identified and corrected (or moved on from entirely) with a low level of impact.
“True digital transformation can only be accomplished in an agile framework, so experimentation must be allowed. One of the keys to navigating through the unknowns of the deep change that most digital transformation demands is the willingness to experiment to learn and test. Failures – doing things and finding they don’t work or don’t work as well as we had anticipated – is part of how we move into the unknown, and much of the details of a transformation journey are unknown and evolve on the journey.” Forbes, Aug 26, 2019
4) Using Agile for digital transformation sets you up for business success.
Once you’ve adopted Agile and the correct tooling for digital transformation, it gives you the foundation to continue working in this new way into the future.
Think about product or service ideation for a moment – you want to be able to go from an idea through to delivering value as quickly as possible. By re-organising how you do your work using Agile, you’ll get your new products or services to market sooner and reap the rewards.
While Agile came from software development, it can benefit even traditional business types, for example banks manufacturing, manufacturing, or even large machinery companies. A recent McKinsey article reported that a European insurance company had such success using Agile that it was able to produce a minimum viable version of a new product in 4 weeks. Another saw an 20 percent improvement in operational efficiency. Why? Because Agile enables you to be more customer-centric and meet your customer’s expectations quickly. In today’s market, it isn’t good enough to say that you’ll take their feedback into consideration for the next product launch in 12 months time – customers expect improvements now. If you can’t deliver, they’ll simply go elsewhere.
Where should we start?
If you find that you are still very early in your digital transformation journey, don’t panic – start with a single step: get an Agile platform (like Atlassian) set up.
Transformation needs to be fast, safe and reliable and putting an agile delivery capability in play enables this. But, it does mean you need to get it right from the start, so consult experts in Agile delivery and tools. There is a lot to know, much of which you won’t have even thought of, so bringing on board experts ensures that your tools will be configured in a way that suits your organisation’s processes right from the start, and that your team will be trained in a comprehensive way.
What are the other key ingredients for successful digital transformation?
While Agile should be the cornerstone, there are a few other factors that need attention if your digital transformation journey is to be successful.
- Strategic objectives are set for the transformation. This seems obvious, however it’s crucial to have these set up front so that success can be measured later on.
- An internal scorecard for success is established. Think about how daily business will look after certain points in the transformation journey. For example, how are staff responding to challenges now? Is staff retention improving? Are staff able to process payments more easily? Can staff apply for leave more quickly? Are staff meetings more productive?
- An appropriate budget is allocated. As we mentioned earlier, the more you are able to invest, the faster your transformation will be and the higher the returns you are likely to see. Some organisations will want to see proof of success with a smaller project to reduce their financial risk, however this ‘toe dipping’ approach often fails as the full potential of digitisation can be hard to see in isolated projects. Digital transformation needs to be conducted across an organisation to integrate teams, and updates need to be made over time, so funding needs to be allocated accordingly.
- There is c-suite buy-in. This often means that the CTO, CIO, COO or similar will take on the role of digital transformation champion. A comprehensive digital transformation requires commitment from the c-suite to ensure that appropriate investment is made, and that each function in the organisation can be supported through the change.
- A team has been created to lead the project. I’ve seen some organisations set up a small ‘tiger team’ who report to the executive team. It’s important to ensure you have someone experienced in Agile or someone really willing to learn, who can advocate the approach. This person could be a veteran of the company, you could run a program to find advocates of different aspects of Agile to help the transformation along, or bring in experts to train your staff.
- There is a culture of persistence. Digital transformation inevitably throws up challenges, and it may take several rounds of trial and error to get things right. It may take more time, and some creative thinking, but allowing staff to persist even if mistakes are made, will lead you to success.
- Choosing the right tools and using them properly. I so often see organisations choose the wrong tools – not just for their Agile delivery system but for other digital processes. This can be because of poor research, assuming because a product works for a competitor it will work for team, or a policy of choosing the cheapest option. Seek independent advice about your tools, ensure they are configured correctly and that training is carried out. Nothing will hinder your Agile delivery system and your digital transformation like underutilising good tools.
Embarking on digital transformation isn’t a question of “if” anymore. It’s time for all organisations to get on to it. Your delivery capability is one of the most important pieces of your business, so if you get that right everything else will follow.
If you’d like to learn more about Agile and digital transformation, download our whitepaper: Your Guide to Understanding Digital Transformation, Agile & Enterprise Productivity Platforms.