Digital capabilities are a fundamental building block with which companies can transform customer experience, operational processes and business models.In the report “Digital Transformation: A Roadmap for Billion-Dollar Organizations” by MIT and Capgemini they found that 77% of executives we interviewed mentioned skills gaps as a hindrance to driving digital transformation. The skills needed go beyond pure IT to include specific technologies such as social media or mobile, as well as the analytic skills to drive value from big data. The most fundamental technology requirement for digital transformation is not particular skills or particular technologies. It is a core set of four digital capabilities.
These four capabilities revolve around technology but typically not all of them reside in the IT department.
The four capabilities are:
1. A Unified Digital Platform
The most fundamental technology enabler (or inhibitor) of transformation is a digital platform of appropriately integrated data and processes. Many large successful companies have historically operated in silos, each with their own systems, data definitions and business processes. Generating a common view of customers or products can be very difficult. Without a common view, advanced approaches to customer engagement or process optimization cannot occur. Unfortunately, many executives blame their CIOs for problems with a disconnected legacy of systems; fifty percent of our interviewees cited ineffective IT as a challenge.
2. Solution Delivery
Companies also need the ability to modify their processes or build new methods onto the data and process platform. Such solution delivery requires effective methods and strong skills. Most IT departments have solid development methods in place. However, those methods are often geared to well-defined requirements and mature technologies but not to emerging digital technologies and practices. Mobile and social media, for example, often require iterative approaches to learn about what will work in the market or workplace. Such initiatives also use technology that may not be commonly available in enterprises. Analytics activities often require specific knowledge and temperaments that typical IT developers do not possess.
3. Analytics Capabilities
In our research, information management and analytics were highlighted as major goals by executives across industries. Several companies echoed the statement of an executive who stated that “It’s time to harvest the data and turn it into insights.” Combining integrated data with powerful analysis tools is seen as a way to gain strategic advantage over competitors.
4. Business and IT Integration
Digital transformation, more than other business changes, requires strong integration between technology and business executives. Companies with a history of strained IT and business relationships are handicapped when trying to conduct digital transformation. These companies often have issues common to those that do not govern IT well — namely complex IT architectures, unintegrated data and processes that are not well-enabled through technology.
Read the full article for the complete elaboration on all four capabilities.