Innovation Leader Tony Saldanha Explains Why Most Enterprise Digital Transformation Efforts Fail
Digital is the #1 priority for boards and C-Level leadership, and it’s reported that 70% of all enterprise digital efforts fail. This equates to more than $900 billion worth of spend that miss the mark.
Former VP of Global Business Services at Procter & Gamble and author of the book Why Digital Transformations Fail, Tony Saldanha is a globally recognized Fortune 25 executive with more than 30 years of experience in IT and Global Business Services.
During his keynote presentation at Ascendum’s Accelerating Digital CIO event held on July 18, 2019, Saldanha explores successful digital transformation steps he has implemented during his career, as well as some common advice he offers enterprise leaders. Watch the video
According to Saldanha, surprising reasons why most digital transformations fail is due to:
1. Buzz, hype, and misunderstanding have led the term to become co-opted.
2. Organizations try to apply the same methodologies to different initiatives — each digital initiative requires different mindsets and methodologies.
3. Lack of discipline. In order to successfully digitally disrupt a large, stable organization, Saldanha suggests asking questions that are out of the norm. Some of the questions he asked when at leading innovation at Proctor & Gamble included:
· Why should the travel expense process even exist?
· Is it possible to accomplish real-time supply chain planning end-to-end?
· Can artificial intelligence (AI) run call centers, automate purchasing, innovate legal processes, self-heal IT, etc.?
· How can our organization achieve 100% master data accuracy?
For business leaders considering digital disruption strategies, Saldanha says “…the bigger question is actually not would you like to do it, but how do you go about it?” He provides two tips for organizations beginning or reinventing their digital transformation journeys.
1. Know your competition
Saldanha suggests it’s not another similar sized or a larger company, most likely, it will be a startup. Large companies are losing market share to small, nimble startup companies. When benchmarking an average large IT company against an average start-up IT company, Saldanha found that the start-up had half the spending per percentage of revenue with 10x the agility.
2. Own your transformation
Saldanha said as a result of the fourth industrial revolution, five of the top ten companies in the world by market capitalization are technology companies, this does not include Amazon or Alibaba which are classified as consumer services. Additionally, eight years ago, there was only one tech company on the list.
He says as we enter the new decade, tasks at work and in our personal lives are becoming easier. But it is not just about functions, it’s about entire industries that are dramatically changing around us. Saldanha notes the fashion retailer Zara, who has developed the capability to deliver fashion designs from designers to retail stock inventories within two weeks — a service they have provided for several years. This algorithm-based supply chain planning is dramatically shrinking the product inventories and lead times in supply chains.
Saldanha says by 2025, we can expect 10% of all wealth being managed by financial planners to use a combination of AI and humans. By 2030, 40–50% of jobs in the manufacturing, transportation, and retail sectors could be done by hardware or software robots. By 2027, computers will exceed the basic human literacy levels of 24 million U.S. people.
He notes that it is important to embrace technology, as “it is inevitable, just like electricity, the steam engine, and many other things. It doesn’t mean that it is without risks or without dangers, but it is inevitable, and you have to find ways to make it work for you.”
Taking this into consideration, he delivers three pieces of advice:
1. The largest issue in our time isn’t technical skills, it’s a technical mindset. Tech leaders need to develop the mindset that they can do something different with technologies and envision the possibilities.
2. Know the 70:20:10 model. This is when 70% of capacity is on running operations, 20% of capacity is on continuous improvement, and 10% of capacity is on disruptive innovation. A strategic plan is necessary for each of these three buckets.
3. Use your ecosystem — where your most disruptive ideas will come from, not your traditional experts. Three tips to consider:
· Distinguish the 20 from the 10
· Leverage external ecosystem highly
· Set up a portfolio of disruptions, not just a few
Saldanha says discipline is key. For example, when Google starts a new project, they always begin with a finance manager on the job, not a technologist or a project manager.
About Ascendum Solutions
Ascendum is a global information technology (IT) solutions company that accelerates innovative technology-inspired solutions to business-driven challenges. Ascendum Digital’s hands-on teams' ideate, create, develop, implement, and evolve our clients’ customer and employee experiences.
