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How best to implement digital transformation amid pandemic

David Wayne Ika
David Wayne Ika

Founder and CEO of Kurio and EndeusTV

Jakarta  /  Thu, May 28, 2020  /  08:27 am
How best to implement digital transformation amid pandemic

Let’s refresh our understanding of digital transformation: core shifts that fundamentally change how businesses generate value for business owners, stakeholders, suppliers and customers by implementing digital technologies and the internet across all aspects of the business. Such transformation can radically change how we do business, how we deliver value to our customers and how to face the current competitive landscape.

Transformations are always hard; this one is harder to do, and it has to start from the top. The current pandemic just accelerates digital transformation to where it’s no longer a luxury, but a necessity for survival and conquering this ever changing new landscape. 

For some companies, having a small initiative on digital processes, online documents, way of work and cloud computing has been the unsung hero. Those that are still on the sidelines are being forced to become more digital, which will help them over the long term. Overnight, online transactions, digital payments, on-demand delivery and distance learning are now “must-haves”, no longer “nice to have”.

The good news is crisis can be a good enforcer to force us to adapt and transform a new habit or new way of doing things. We’re seeing hundreds, if not thousands of existing businesses open their channel and presence at online marketplaces and e-commerce platforms, well ahead of their schedule in their road map of “adding online channels” in their annual plan.

One thing this pandemic has done thus far is clearly separating the winners and laggards. It shows us good businesses and bad businesses; good innovative schools and ill-prepared schools; good leaders and poor leaders, and many other examples.

While many are struggling to cope with the pandemic, the new rules of social distancing, remote working and distance learning programs in schools, few are not only surviving; they are thriving and excel in showing their qualities during this time.

This has to do with two things: the readiness of leadership to apply digital transformation in their organizations.

According to a McKinsey study, digital transformation success falls into these five factors: 

  • Putting the right, digital-savvy leaders in place
  • Building capabilities for the workforce of the future
  • Empowering people to work in new ways
  • Giving day-to-day tools a digital upgrade
  • Frequent communication with both traditional and digital ways

As we ponder and plan to kick-start the transformation for our businesses, let’s dive into these types of transformation. Depending on your industry, size of business, number of people in your organization and your capital-resource allocation strategy, there’s no silver bullet solution. Each works differently according to our unique situation.

One pragmatic way to break it down is as follows:

Process transformation

Revisit both internal processes in operation, creation and production to customers' journey and touch point and how they engage with our products and services.

We need to set clear goals on the transformation: optimize margin, reduce cost, reduce time, improve quality, etc.

Example: On-demand food or restaurant business helps maintain operation during this time, while it serves as additional business during normal times. Watch for more central kitchens being set up post-COVID-19.

Business model transformation

Focus on a specific part of the business that can transform your core business model. Imagine how we produce, deliver, distribute and experience products/services.

Example: Online learning, online tutoring and online classes have taken center stage across the world, including in Indonesia. Many tutors and instructors offer classes via Zoom, Google Hangouts and other platforms.

As social distancing and stay-at-home policies are likely to continue for a little while longer, and health in public places becomes a permanent concern, such distance learning is here to stay. 

Domain transformation

With digital and internet becoming an ever growing aspect of people’s lives, many possibilities are presented in business to redefine value, product and services.

We can identify and leverage how available technology and internet combined with our core ability can translate into new business and services.

Example: Amazon expanded into the new domain of cloud computing with its Amazon Web Services (AWS). From e-commerce business, they expanded into completely different market domains, as they found ways to combine core abilities they have developed internally while building Amazon.com with the existing and growing trend of cloud computing. Now AWS contributes more profit than their e-commerce business. 

Cultural/organizational transformation

Last but not least, these transformations require a redefinition of our organization, new mindsets, new talent and capabilities for the digital savvy customers and business.

New ways of doing things and new workflows are required: being more agile, having a company culture of testing, being data oriented and doing experiments, decentralized decision making. We need to train and empower our team members to be more entrepreneurial, letting go of the need to decide everything and start letting them decide to speed up innovation and have a faster turnaround. 

Ideally we make transformation across all of the aforementioned elements, however not all companies are well-prepared or have the time and resources to do that.

One of the most important decisions as a leader in a company is on capital and resource allocation. Our ability to allocate resources or people to the single most important task will determine the acceleration of our company.

Having said that, take those four elements and reflect on your business. If you can only pick one to plan your transformation, choose one to start with. Some businesses are straightforward in how they generate value, and making money can start from process transformation. Others might see a big addressable market for your business if you expand your domain. Few businesses might take full advantage of business model transformation. 

As you move ahead from one element to another, bear in mind the cultural and organizational transformations will be the glue to make this transformation sustainable, well received by your team and customers. Most companies struggle with the last element.

Depending on your roster and existing team members, this one is the hardest. You will probably need to bring a new batch of people, you might need to let go of some who refuse or don’t have the ability to evolve. Certainly you will need to upskill and train them in order to bring them along on the transformation journey. 

To close, here are some pointers on getting started: 

  • Figure out your business strategy before you decide on anything
  • Identify and leverage your internal resources and talents that can help you in this transformation
  • Reimagine new customer experience, how they engage with your business, and see which steps or touch points you think you can make the change to drastically improve your business and how you do things
  • Slowly, but regularly and often, start sharing and talking about these new changes and plan to your team to make them feel included and prepare them for things to come

This pandemic will take a toll on every one of us. As we slow down and have more time, take it as a great opportunity to realign your business, discuss with your team. Be sensitive and take notes on your surroundings; what has changed, what things remain the same, what new behavior do we see. Some of those changes are here to stay.

Everyone is faced with the same pandemic and challenge; our response will set us apart from the rest, and 10 years from now, looking back, we’ll be thankful that we made the necessary changes. (kes)

*** 

David Wayne Ika is founder and CEO of Kurio and EndeusTV. David graduated from Pensacola Christian College, Florida, United States with a degree in Business and Management. He is a part of GDP Ventures, Indonesia’s top investment group that has two key activities: investing and venture building. David built Kurio and Endeus as GDP Venture’s first venture building, raised three rounds of fundraising for Kurio. 

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Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.