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It would be easy to look at the title of this blog and to go off on a rant about the true cost of digital transformation being the cost of not doing it – the risks to your organisation in either becoming irrelevant or worse still losing competitive advantage.
Today’s digital press is now full of tales of those organisations that have either made a success of digital transformation or examples of those who have failed miserably because they have not seen the light of digital transformation. BUT I want to properly address the title of this blog by answering the questions that are so often asked.
Will digital transformation require new spend not currently allocated? or Do I need a specific budget? The answer to these questions is a very definite YES or at least YES to the requirement to have a dedicated digital transformation budget.
In his quirkily-titled book Digital Lipstick on a Legacy Pig Vaasu Gavarasana says one of the key mistakes in implementing digital transformation is not having a dedicated budget: “Often digital budgets sit within IT and Marketing. This travesty is perhaps the single biggest detrimental factor to achieving digital transformation”.
Gavarasana goes on to state that “For digital transformation to be effective, the Board and the Chairperson have to demand action from the CEO and then bake key digital performance indicators into the CEO’s performance evaluation and bonus with a higher weight on action taken”.
SO what does an organisation need to spend their money on? To answer this question we need to look at the key drivers of DT.
In the first instance, therefore these drivers require spend on
- Leadership development
- Expertise to assist in digital strategy development
- Training to assist in change of employee mindset and organisational culture
- Digital talent empowerment and technology as advised by the strategy development.
It may be that an organisation will already have budgets allocated for some expertise in Leadership and Strategy development, for some training and for what may be loosely entitled product or outcome development. It is critical though that these budgets are focussed on digital transformation as an outcome and that the spend is managed within a digital transformation framework to ensure the strategic goals of the organisation are met.
Vaasa Gavarasana lists 7 mistakes that derail digital transformation
- Uncommitted CEO’s, Vanity projects and Quick wins!
- Bling v the Iceberg – digital transformation requires a different viewing lens – it is outcome based and looks like an iceberg
- To be or not to be inside marketing – digital transformation needs to be an independent function.
- Presence of a minimum viable team – all stakeholders need to change but there must be a team of dedicated people to drive digital transformation
- Paper Tiger eats Digital Cow for lunch – A one -pager beats a long Document – “Deploy or Die”
- No dedicated budget
- Not realizing that digital transformation and customer centricity are the same thing
The ONLY WAY these mistakes can be avoided is to operate within a digital transformation framework – one which links strategy to implementation, which focuses on the customer or citizen, which is data driven and measures outcomes, which is interactive and ensures mindset and culture change and avoids Just Doing Digital rather than Being Digital.
At Ionology we have the only peer reviewed Digital Transformation Framework which has been successfully adopted by organisations in providing Digital Transformation Leadership. It ensures a focus on strategy, culture and capabilities and means that an organisation can be confident that their dedicated budget is being well spent.
The true cost of digital transformation is actually the INVESTMENT IN LEADERSHIP. All budgets can be misspent without leadership immersed in digital transformation. If leaders don’t get digital transformation their organisations won’t get it either.
The Ionology framework provides leaders with means to avoid both chaos and crisis in their organisations and ensures that the strategic goals of the organisation are successfully delivered with the costs of digital transformation being carefully managed to provide the maximum outcome.
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