Where are you in your digital transformation?

One of the functions within the companies which is affected the most  amid Covid-19, is the auditing, for sure. Closed borders, canceled flights, travel bans, restricted access to site operations made it impossible to perform audits physically as scheduled. This left the function with some problems/questions to be resolved/answered:

• How are we going to manage the audits remotely? What do the remote audits mean for the overall risk-based audit program made and managed for years? How are we going to manage the back-log?
• Do we have the right tools to make the remote audit possible in the first place? Are we connected to the operations digitally strong
enough, so that the disturbance to the auditee is limited at this difficult time, when they are trying to operate under extraordinary circumstances?
• How are the auditors feeling? Do they feel comfortable with the remote audits? What can be done to help them feel comfortable and capable enough?
• Can we posssibly use this period to help the organizations deal with their fundemantal problems and risk manage those with the experts we have in the auditor pool?
• Can we help our auditors increase their capabilities and in return the reputation, by deploying them in some key projects where they can play an important role?

This list is not an exhausted list, of course, and may vary from one company to another. I believe, however, the most important question to be answered would be the following:
“Do we have a well defined, fit for purpose, digital transformation strategy supporting a strong business continuity plan for the function?”

No doubt that we hear “digital transformation” phrase more than ever, after facing the facts that Covid-19 brought to the surface. Digital transformation was reshaping the entire segments and industries for some time already, is now being considered more seriously by many industries.

But, what exactly is digital transformation? The definitions made by the experts vary slightly and often times, we see digitization and digitalization are being used for the same purpose. They have different meanings. According to one definition, digitization refers to changing from analog to digitial (Gartner Inc, 2018a), while digitalization refers to the process of improving a current business model or create a new one with the help of digital technologies (Gartner Inc, 2018b). In this sense digitalization has a broader scope. Nambisan et.al (2017, p.224) characterize digital transformation as “the creation of, and consequent change in market offerings, business processes, or models that result from the use of digital technology”. In their book, “Building the Agile Business through Digital Transformation”, Neil Perkin and Peter Abraham(2017) have given the following definition, which gives a wider lanscape:

“The transformation and reinvention of the resources, priorities and processes of a company (or a function*), in order to be fit for purpose in a digitally empowered world.”

Digital transformation is about using technology wisely, for better, faster, bigger results. But it is beyond the investment made on the digital tools and means to make the transformation happen. It requires a welldefined strategy, and a comprehensive change management model through the organizational interventions to support the culture, people, behaviour and processes. And as in all the changes, it is not an easy task to convince people for making it happen and keep the momentum high at all times. Often, the expectations are set at an elevated level than the organization can deliver.

The study found that only some companies captured a real business benefit, despite numerous initiatives taken under the name of digital transformation. It is clear that the digital maturity plays an important role to drive results. Neil Perkin and Peter Abraham, in their very same book “Building the Agile Business through Digital Transformation”, defined the four levels of maturity as follows (2017):

Beginners: organizations that do very little with advanced digital capabilites, have a low awareness of opportunities
Conservatives: companies that favor prudence over innovation, have a unified vision but are sceptical of the value of digital trends
Fashionistas: follow digital trends and implement shiny new digital apps, but do not have a unified vision for the digital transformation of their business
Digirati: those that truly understand how to drive value through the digital transformation of their business. In other words, combining transformative vision and governance with investment, innovation and continous improvement in people, process and technology.

The right strategy supported with a clear change management program would be the only way to succeed, however the strategy would become volatile, if not linked to and supported by the overall digital transformation strategy of the company. Research (Patterns of Digitization – Research Technology Management, March – April 2020) has shown digitally mature – digirati- companies, have tailored the following practices for the great results:

Align resources – both financial and human – with strategy: a good project management would require a clear definition on resources required.
Engage key partners: work with internal functions and external vendors to find the best and simple solution to your need.
Demand and cultivate collaboration: reach out to your customers, suppliers or even competitors to get collaborative excellence.
Entrepreneurial leadership: lead as an entrepreneur or a startup to redesign your processes to the perfection.
Communicate, communicate, communicate: communicate as much as possible and sometimes it is ok to overcommunicate too – this is key to keep the momentum.
Support efforts of your function and team members: appreciate the extra workload the transformation would bring and support team members for their needs.

Where exactly are you in your digital transformation? Are you a beginner or fashionistas? What needs to be done differently to become a Digirati?

(*) author’s note

– “Building the Agile Business Through Digital Transformation”, Perkin, Neil; Abraham, Peter; 2017
– “Patterns of Digitization – A practical guide to digital transformation”; Mugge, Paul; Abbu, Haroon; Micahaelis, Timothy L.; Kwiatkowski, Alexander; Gudergan, Gerhard -Research and Technology Management; March – April 2020

By Tülay Kahraman,
May 11, 2020

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