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The 7 rules for undergoing digital transformation in business

The 7 rules for undergoing digital transformation in business

The following article has been prepared by Business Insider in partnership with the Commonwealth Bank of Australia.

It’s probable Steve Jobs and his team never anticipated the impact that combining a phone, a music player, an email server, and rolodex into one tiny handheld device would have on global commerce and consumers.

The arrival of the smartphone was a true paradigm shifting moment in global history and for the global economy. Jobs, Apple and those who followed have helped usher in this fourth industrial revolution the global economy is currently living through.

This has seen the scales tipped and industries disrupted as the power, reach, and industry dominance of companies like Amazon, Google, Facebook, Twitter, Uber and Airbnb challenged established industries and business models.

Established players have been reeling. Retail, the taxi industry and hotels have been particularly hard hit. Microsoft has successfully hit back, changing its business model and operations, and diversifying its revenue stream.

In other industries, business leaders are still reacting – some well, some not so.

As we head toward 2020, almost no area of modern commerce has been untouched by the changes technology has wrought. And almost no area of modern business has been untouched by the empowerment of customers – both consumers and B2B – and the rebalancing of expectations around price, convenience and delivery.

Faced with a disruption to business models, an increase in the uncertainty about the future shape of the economy and their customers’ desires, business leaders understand the need for digitisation.

This means different things to different people, companies, and industries. The important thing is all businesses and their leaders must recognise the world has already gone digital; it’s not a channel, but a paradigm shift, a necessity of business.

The seven rules for going digital

  1. Leaders need to change their approach. No longer is command and control the best way to manage the business. By necessity a leader needs to become more collaborative, a co-creator with colleagues, and customers.
  2. Focus on the customer. This is the Jeff Bezos way. Businesses and their leaders need to have this as a primary objective of their digital strategy. Leaders need to adapt as their customer adapts, they need to evolve as customer needs, wants, and expectations change. Customers — external and internal — must be the primary focus.
  3. Culture is critical. Technology empowers digitisation, driving the ability to get closer to the customer and deliver what they want. But the rules of business have not been abandoned. Culture is still a key to success. Without the right culture, digital transformation efforts will fail.
  4. Get comfortable with failure. One important cultural change is that people across the company – from the board and executive level right on down to the shop floor – must allow themselves to experiment and fail. That will need a change in mindset.
  5. Silos are the enemy. In a digital world the breaking down of silos is a paramount feature of any transformation strategy. Experimentation, failure, and success need cross functional collaboration to deliver. Silos inhibit this.
  6. Technology is a means to an end. It is the enabler of the changes needed to delivery on customer and business leader expectations. It is not the end in itself.
  7. Digitisation is not a destination, but a manner of travelling. The world is speeding up. Customer expectations continue to evolve. Competition is intensifying. Consider digitisation a journey, on which you’ll probably never feel like you’ve arrived.

Things you should know: This article has been prepared by Business Insider solely for information purposes and is not to be construed as a solicitation, an offer or a recommendation by the Commonwealth Bank of Australia. The information may be incomplete or not up to date and may contain errors and omissions. Any projections and forecasts are based on a number of assumptions and estimates, including future events and contingencies, which may be inaccurate. It must not be relied upon as financial product advice and is not Investment Research. As this information has been prepared without considering your objectives, financial situation or needs, you should, before acting on this information, consider its appropriateness to your circumstances and if necessary, seek the appropriate professional, including taxation advice. We believe that this information is correct and any opinions, conclusions or recommendations are reasonably held based on the information available at the time of its compilation but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made. Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian credit licence 234945.