Digital is the modern mantra.
Many companies are driving digital transformation initiatives to become more agile, responsive and competitive, with the digital leader or the chief digital officer (CDO) steering the digital direction. But every company has its own nuances and requirements, making each digital journey unique.
In a recent roundtable, organized by CDOTrends together with SAP at the CDO Summit Hong Kong 2018, digital leaders discussed the diverse set of challenges they faced, and how they tackled them.
Who Sets the Agenda?
Every digital transformation needs a strong vision and purpose. After all, digital transformation is not a one-off project, but a lifelong journey to improve, optimize and collaborate.
In fact, Damien Mooney, managing director and head of Digital Wealth, APAC, BlackRock believed there should not be any distinction between digital and business strategies – it is all about the business.
“Our agenda is set by how we organize the business. If digital is not in the conversation, you cannot expect businesses to digitize. Digital needs to be an integral part of core business strategy and not evolve separately,” he said.
The way the digital agenda is set depends on each company.
For example, for virtual banking applicant 9F International, the overseas arm of China leading P2P lending platform 9F Group, it is set between the CEO of the parent company and Raymond Chan, managing director of the overseas arm. “We will need to be decisive from the start,” said Chan.
Meanwhile, Samuel Hui, co-owner and head of Digital, Hong Kong Broadband Network (HKBN), argued that the digital agenda needs to show its impact on the bottom line from the start. “We did not start our digital initiative top down. Instead, we formed a cross-functional startup team and built a pilot to show what an HKBN digital transformation should look like.”
Once the “startup,” which drove offline sales with digital tools, showed its revenue impact, “the senior management took notice and we co-set a digital agenda.” “Now, we are scaling this program across HKBN,” Hui said.
What Are the Key Ingredients of Success?
All panelists acknowledge that communication was vital for digital transformation to work. It also required a commitment to drive conversations across different departments that often worked in silos.
Maria Sit, chief client experience and digital officer, Sun Life Hong Kong noted that although it was a long journey to digital maturity, it was an important one. “To get the connected experience, we had to break down the silos because you have to not only collaborate but reimagine the future together.”
Equally important is prioritization, especially when the digital transformation journey is essentially made up of numerous projects and initiatives. It allows companies to focus on the most important objectives with limited resources.
Magda Kotek, chief marketing officer Asia Pacific, Invesco said that getting the alignment can be easy; a real challenge is how to prioritize the various projects under a digital transformation initiative. “None of us have infinite budgets after all,” she said.
Why People Matter in Digital?
Digital transformation is often less about technology and more about the people. Panelists noted that at the start of an initiative there are often debates on whether there is a need to disrupt a business – especially when the business is doing fine.
“Digitization is the buzzword, but engagement and adoption are more crucial. To get people to actually use the technology, it is an underestimated challenge,” said Mooney.
It can be especially difficult to convince veterans who “are used to doing things in a certain way” or those who are about to retire.
“In our commercial real estate brokerage business, we have leasing agents who have been there for 10 to 20 years. They think everything is driven by relationships. So, convincing these industry veterans to use technology can be a challenge,” said Nik Sudhakar, director, Digital Solutions, Asia, CBRE.
Being specific on the key benefits or advantages that an individual team or employee stand to gain is important. Panelists noted that once employees understood how the new digital initiative solved their current challenges, such as eliminating manual errors that impact month-end bonuses or improving their efficiency, they get onboard faster.
“The most successful technologies are those that [empower people] to achieve their goals. Say if you are a leasing broker, you can get your documents set up in a way that removes the manual effort which allows more time to focus on client relationships. Where we get challenged most is when technology is perceived to replace our people,” added Sudhakar.
How Digital Offers a New Frontier?
Digital transformation gives companies the opportunity to rethink their value proposition and even pivot when necessary.
For example, Sunlife currently sees itself as a lifestyle company and not an insurance firm. “This [approach] has a lot of implications on our brand, and there are many things you need to do to get there,” said Sit.
Digital transformation also cannot be forced. While it required top-down direction and mandates, it requires bottom-up support as well.
Sam Wong, CXO advisor, SAP agreed. “The thing that hits me most of the discussion we had is that it is not about forcing digital to happen. Rather, it is about getting to what the customers and employees want a lot faster.”
More importantly, digital transformation gives the business agility that companies need to compete in an increasingly dynamic market environment where non industry incumbents and startups are disrupting the status quo. But there is no generic blueprint for CDOs to achieve this.
“One of the key challenges [for digital transformation] is how companies can keep their ‘lights on’ while dealing with external competition who are looking to disrupt the industry,” Wong said, adding that it is where many companies need to find their “balance.”