Digital pathway: Five questions to get you started
1. How can I start embracing digital while maintaining agility and not over-investing?
The recommended approach is no different to traditional project management. Make sure that the strategy is sound and supported by a clear vision. Think of appropriate phasing and milestones. Establish that the investments are backed by clear business cases tied in with value drivers. Consider the cultural implications of change and engage the right stakeholders in your business.
2. What are the first steps I should take?
We believe that there are a range of common activities as part of a “digital pre-start” process. These activities are focused on understanding your business levers and organizational digital maturity. Doing this work effectively will identify the right work so that your digital transformation is linked directly to business value rather that being a “toy box” initiative. Having silos pursue pet projects must be avoided; getting the balance right between entrepreneurialism and project governance will be crucial.
For example, an organization with a heavy focus on asset uptime may start with introducing predictive analytics for critical assets. Others may require the introduction of decision support systems to help with supply chain variability. Market-driven businesses may benefit most from looking at analytics to support trading decisions. When choosing these first steps, think about local optimization, but with a view on how these solutions will connect in the future.
3. How can I start digital transformation without losing focus on productivity and margin or cost?
We take the view that digital initiatives should only be commenced where there is a demonstrable link to productivity and cost benefits. Sometimes this will require a long-term view; but organizations should avoid doing digital without this link to exploiting clear business opportunities.
4. What type of organizational structure do we need to manage digital?
Different options range from having a devolved accountability within operating units, a dedicated digital division, short-term project teams with senior sponsorship, through to a central PMO structure. Combinations of these options may exist in certain businesses.
The right answer for your business will depend on factors such as the organization’s digital maturity, the type and number of digital initiatives being considered, and the relative importance of digital to business value. The scale, diversity and geographic spread of a business will also influence the decision. Finally, it is important to get the balance right between obtaining strong operational input and appropriate IST design when thinking through structure options.
Your organization needs to keep their eye on balancing efficient production with the need to innovate. In some instances, that may mean it is appropriate for digital innovations to take place within, next to, or outside of operating business units. In all cases, a clear position must be taken which creates accountability, governance and drive within your business.