Google ‘Digital Transformation’ and you’ll be treated to a myriad of different buzz words. Search ‘Digital Transformation Private Equity’. You’ll get the same buzz words, but you’ll be told you ‘need’ to do it fast… Here’s a very well-written FT article telling you to do just that.
Digital transformation has become a catch-all term for technology change.
It could mean taking something non-digital, like a call centre and making it a fully digital process. It could mean taking a technology that exists in your data centre and moving it to the cloud. It could mean changing the way you develop applications and technology using DevOps.
Basically, anything that involves the technology you use and making changes to it.
For Private Equity the most important part of a digital transformation is not speed, it’s that it adds value.
Defensively by reducing the cost of running that tech or the risks that exist by not changing.
Offensively by enhancing revenue, creating something new and making what you have better. Taking market share away from your competitors.
Watch out, most digital transformations fail (84%). Those that don’t experience delays, multi-year delays.
These delays can often lead programme cancelations or alternative ‘acceleration’ projects. A common reason for failures is a lack of upfront commitment. Setting realistic timelines with measurable milestones goes a long way to help this.
‘The Phoenix project’ by Gene Kim, Kevin Behr and George Spafford does a great job of helping you to empathize with the pain that tech leaders experience. (Thanks Jim, for the recommendation).
Data and the insights are just as important as the change itself.
Getting more data, using that data to create insight and using that insight to make change happen. Finally, turning that change into competitive advantage to increase EV.
Do you get involved with your tech leaders?
How successful have your previous transformations been? What have you learnt that you wish you knew first time round? What will you do differently?
Nearly all businesses are tech or tech enabled. Can you afford not to focus on transforming your portcos tech?
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