Innovation and Automation should be core pillars of any Digital Transformation strategy

CIO, CTO, Digital Transformation, IT, Strategy

Innovation and Automation should be core pillars of any Digital Transformation strategy

Two essential ingredients of any Digital Transformation strategy must be Innovation and Automation. Both of these will help you move closer to the digitization of manual processes and tasks within your company. For majority of the digital transformation initiatives Cloud Computing will play a key role as an enabler and a catalyst. Numerous Cloud services from multiple providers are helping companies to automate business processes and manual tasks along with enabling them to run experiments to try and test new ideas before making decisions to scale these ideas to production systems.

One of the cultural shifts that we are seeing in the newer progressive companies is that of nimble experimentation. These organizational cultures are supporting and encouraging failing fast and failing often scenarios when it comes to innovation and experimentation. These companies have realized the value of innovation and how even a failure of an idea can lead to substantial learning and helping the organization in building bigger and better products and services for their customers. These companies are also the ones which end up producing bold leaders who are not afraid to innovate and try different ideas to improve business processes, products and services.

One of the prime example of a company which has prescribed to the above culture of fail fast, fail often is Microsoft. Back in early to mid 2000s Microsoft was considered a dinosaur who was too slow to react or adapt to market and consumer demands. While Microsoft was still doing great in managing enterprise customers, it was definitely not performing that well when it came to understanding the needs of the consumer customers. More emphasis was put on enterprise customers and proprietary technologies instead of understanding the market demands and evolving technological playing field. While companies like Apple introduced its revolutionary i devices and succeeded with consumer customers and IBM took up to open source with supporting Linux distributions on its servers. All this while Microsoft was calling Linux a “cancer” and wanted to stick to its proprietary technology and not making any newer products and services for the consumers. This mindset however has completely changed under Satya’s regime as the CEO of the company. Microsoft has become more of an Engineering company rather than a Marketing company it was once considered when Steve Ballmer was at helm. Satya has completely transformed the culture of the company encouraging Growth Mindset, innovation, experimentation and deep customer focus. He talks about this culture change in his book, Hit Refresh.

Innovation

Innovation and experimentation are usually the first steps for companies embarking on a Digital Transformation journey. Although an organic culture of innovation is the best thing that can happen to a company but in the absence of it you will have to take a different approach to build it into your culture. Your strategy should include a combination of a top down and bottoms up approach so that innovation and experimentation get woven into the fabric of the company’s culture. Google is a prime example of a company which has done an amazing job in making creativity and innovation as core parts of the company’s culture with its 20% time policy. This policy allowed everyone in Google to work on a project which would help Google for 20% of their time. It was out of this 20% time policy that products and services like Google News, Gmail, and AdSense were born.

If you are trying to push innovation and experimentation in your company, here are some recommendations for you to consider. One key goal to keep in your mind as you start on this journey is that all the ideas and experimentation should focus on business, processes, products and services improvement.

Form a cross-organization council which has membership from all business units
Create a framework to generate ideas and initiate experimentation from all business units
Build a governance model to ensure smooth review, execution and adoption of all the ideas being generated

Once the ideas start flowing and are approved through your governance model, you should look into enabler technologies to help you with the execution of these ideas. Ideas requiring newer and emerging technologies will most probably be enabled by Cloud services through some key providers such as Amazon, Microsoft, Google and IBM. Review this post if you want to understand how Cloud Computing is enabling the Digital Transformation journey of many enterprises.

Automation

Basic definition of Digital Transformation calls for the automation of manual processes and tasks within your company using digital technologies. Automation of these manual processes and tasks will bring efficiency and lead to cost savings. Automation also has the added advantage of helping you win a larger share of the market. It will help you get an edge over your competitors by getting to the market first with your products and services, thus gaining a lead ahead of your competitors. Common Cloud technologies like Web apps, virtual machines along with specialized services like Cognitive computing, Machine Learning (ML), Artificial Intelligence and IoT may play a huge role in helping you automate. In order to identify automation opportunities in your company you may take a similar approach as I proposed above for innovation. That means that any automation project or initiative should go through a governance model and help improve efficiencies and reduce costs along with helping you get an edge over your competitors.

Considering the costs savings and the competitive advantages of innovation and automation you want to make sure that these two are not only part of your organization’s culture but also part of your Digital Transformation strategy.