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While many organizations have developed digital strategies, they struggle to truly transform in a way that is aligned with their organization’s strategic ambitions and demonstrates clear impact. Digital transformation is about more than user experience (which can be thought of as cosmetic surgery) and requires core transformation (which can be more like open-heart surgery) to create the systems transformation needed to enable the adaptive organization.
Perhaps the issue is that, despite organizations knowing digital transformation requires leading with business strategy, technologies like cloud are too enticing and take over the conversation. Clearly, cloud technology will need to be a cornerstone of digital transformation. However, starting with cloud strategy without understanding the business ambition is a recipe for disaster.
Start with a strategy that enables the organization’s capacity to change and ability to win
The fast pace of change in business and technology strategies means organizations need to build a foundation that is more modular and adaptive to change. Organizations need to embrace an engineering mindset—build and improve as contexts shift—to keep up. That culture change requires chief technology, information, and cloud officers to think beyond the technology they’re implementing and to elevate the conversation to a business strategy discussion.
Leaders need a common language that bridges the divide across business, technology, and organizational transformation functions that can evolve as today’s technologies become tomorrow’s legacy solutions and directly connects IT spend to business value.
Use five digital imperatives to align strategy and transform
In Deloitte’s new research, “A new language for digital transformation,” we define five digital imperatives organizations can consider to align their strategy and accelerate their ability to change and win. These concepts create a common vocabulary across organizational functions, creating a level playing field for nontechnical and technical leaders alike.
Organizations can align digital strategy and transformation solutions around these five imperatives:
Organizations can benefit from this approach whether they are looking to optimize their insights strategy as a competitive differentiator; build a holistic business strategy that considers all five of the imperatives; or collaborate across business, technology, and operational functions in a way that considers multiple imperatives across the digital capability stack.
Make sure you’re asking the right questions
“What should our cloud strategy be?” is a critical question for a technology team building tools and accelerators for business use cases, but it’s not the question that can drive forward transformative change. True organizational transformation, in which workloads move to the cloud and business processes change, needs business requirements, technology strategies and operating models, and the workforce to line up.
After all, an organization can’t build an e-commerce solution to sell its products without having the right business strategy in place to manage its operations, supply chain, and regulatory restrictions; the right technology platforms to manage those operations; and talent with the right skills to build and adopt it. An organization can’t transform and automate underwriting processes without getting the underwriters who are fundamental to the process to embrace that change.
Instead, the key questions should be:
A new language for digital transformation
The five digital imperatives can help design adaptive business processes and technology architectures (modular “capability stacks”) that embrace constant change and reconfiguration. This maintains a dynamic equilibrium, with the goal of forward compatibility for multiple possible futures. Importantly, they can help organizations embrace change for today and tomorrow. They understand that the technologies that enable this transformation today are AI, cloud, and cybersecurity, which will have a key role in tomorrow’s evolution toward “horizon next” technologies and strategies and leave the flexibility for those strategies to evolve into the future.
Indeed, this state of dynamic equilibrium is the North Star achieved—the fluid, fungible, integrated technology strategy that marks the difference between digital strategy and digital transformation. This is a system in a steady state where the variables are unchanging; where it looks like nothing is happening, even though reactions are continuously occurring; in essence, a system that holds in place as everything is continuously moving—digital in motion.
Rich Nanda is a principal in Deloitte Consulting LLP, where he serves as the leader of Deloitte’s US Monitor Deloitte practice. He has significant experience in guiding clients through strategy-led transformation to achieve profitable growth. He routinely advises boards, CEOs, and executive teams at consumer products companies on topics spanning growth, business model innovation, operating models, capability building, analytics, and technology adoption.
Ragu serves as the chief innovation and chief digital officer of Deloitte LLP and the chief innovation officer of Deloitte Global. In his dual role as the US and Global Innovation leader, Ragu is responsible for collaborating with each of the US businesses and across member firms to help increase the innovation and digital coefficient of the firm. He works with member firm leaders and global business leaders to drive strategic growth offerings and cross border commercialization of assets. Ragu is also a principal in the Strategy & Analytics practice of Deloitte Consulting, focusing on the Technology, Media, and Telecommunications sector. He has a unique blend of operational, principal investing, and advisory experience in the technology and telecom sectors. He has extensive experience helping clients in their efforts to adopt ideas to significantly improve their organization's performance. Prior to Deloitte, Ragu gained professional experience in consulting, private equity, and product management. He has authored several articles and has been cited in numerous news publications including The Wall Street Journal, The New York Times, Forbes, Bloomberg News, Reuters, The Financial Times, and Deloitte Review. His most recent publications in Deloitte Insights have focused on artificial intelligence, cognitive computing, and big data. Ragu earned his Master of Business Administration degree from MIT Sloan School of Management, his Master of Science in management information systems from the University of Texas, and his Bachelor of Science in physics from Madras University.