Why digital transformation journeys fail, explains Piyush Chowhan, Arvind Lifestyle Brands

A large proportion of organisations have already embarked on their digital transformation journeys, of which, some have been successfully reaping business benefits, whereas many have faced casualties. Another set of organisations is planning the digital transformation path; and many more are still in an ambiguous state of mind. A critical talk-point, however, remains – how can organisations get their digital transformation right, eliminating its failure.

Piyush Chowhan. SVP & CIO, Arvind Lifestyle Brands, shares, “The digital transformation hype started about a decade ago. Organisations started adopting a lot of technologies, which led to several casualties. There are many more casualties which are on their way. Most importantly, organisations need to realise that digital transformation is not easy. Digital transformation is much beyond mere implementation of technologies. As part of the digital transformation journey, data is one of the biggest challenges that organisations face. According to statistics, organisations use only four per cent of their data for decision making. This is because data is available to organisations in consumable forms. Hence, making this data available in consumable form becomes a huge journey for the organisation.”

What goes wrong?
A 2018 McKinsey report states, “Most digital strategies don’t reflect how digital is changing economic fundamentals, industry dynamics, or what it means to compete. Companies should watch out for five pitfalls – Fuzzy definitions, misunderstanding the economics of digital, overlooking ecosystems, overindexing on the ‘usual suspects’, and missing the duality of digital.”

Elaborating on fuzzy definitions, Chowhan says, “Organisations need to understand the difference between digitisation and digitalisation. Digitisation simply means digitising manual processes. This doesn’t lead to digital transformation. However, most organisations are only focusing on digitisation. Digitalisation involves real application of digital technologies to business processes and outcomes. This ensures transformation of a business model into a digital format.”

Belong to a retail fashion industry, Arvind Lifestlye Brands – as Chowhan explains – is still struggling to understand the unit economics of digital and physical platforms. These are tough comparisions, because of complexity of the ecosystem. It is important to understand the unit economics of digital transformation from an industry perspective and its business impact.

Adding to the complexities, the journey to digital transformation has further led to the creation of a relatively new stakeholder in an organisation – Chief Digital Officer. In Chowhan’s opinion, there’s no need of a CDO in an orgnisation, because there are enough CXOs in an organisation having the right kind of knowledge. But it is important for the CXOs to understand the business outcomes that digital technologies can provide, he stresses.

He adds, “There’s also a myth that just the adoption of numerous technologies can drive digital transformation, which isn’t true. Organisations need to look at the business model and business processes. It’s crucial that these components are blended together, followed by technology adoption. The understanding of what technologies bring in and what they don’t – this is very important. Organisations should not get overwhelmed by technologies. Technology should be applied where it is relevant and it should work in tandem with business processes and business models.”

(Chowhan was speaking at the recently organised Technology Senate Bangla organised by
Express Computer)