Digital Transformation does not work without a holistic approach

Although COVID-19 puts enormous pressure on turnover at many companies, this virus also has positive sides. Companies are forced to critically evaluate their current revenue model and organizational structure. The conclusion: A digital transformation is inevitable, but is only possible if it is disruptive and, above all, holistic.

Digital Transformation 1.0 does not work as expected

Now that many companies are under great economic pressure, they are coming to the conclusion that something has to change. But what? Further digitization of the organization is often not the first thing that comes to mind because people have the perception that it is just another IT project. This costs money and yields nothing… right?

Many companies have already invested in improving their IT infrastructure as a step in their digital transformation. But IT has become a commodity, which means that capital-intensive investments have often led to negative returns. Some companies have transferred all their existing data and applications to the cloud and believe that they are fully Future Fit. But a digital transformation goes much further than replacing the IT infrastructure. Working from the cloud has led to very limited cost savings because IT costs are only a marginal part of the total operational costs of an organization.

Digital Transformation 4.0 does yield money!

The goal of a Digital Transformation is that it actually generates money. But how do you do this in contrast to the 1.0 version. Because investing in a new IT infrastructure costs money, right?

The secret of a well-implemented Digital Transformation is the holistic approach. It is a metamorphosis of the entire company. In particular, the Business Operating Model with a data-centric IT architecture is the blacksmith’s secret.

The essence of Digital Transformation 4.0 is not the use of a diversity of IT tools, but to make the Operating Model as adaptive as possible and thus generate exponential value.

If COVID-19 has taught us anything, it is that, more than ever, companies are faced with unforeseen changes and a future full of uncertainties. But responding effectively to change can result in improved performance, increased satisfaction for all stakeholders (including employees) and innovative growth.

A holistic approach is the key to improved performance

Responding to unforeseen changes and (future) uncertainties requires a flexible and dynamic attitude from the entire organization. This is only possible if the organization is data-centric.

Switching to a data-centric platform is a good first step, but only works if unnecessary data and applications are reduced. The next step is data-driven working. When everyone in the organization makes decisions with the data that is accessible to them, processes can be completed faster and more efficiently.

It is important to create a scalable, adaptive Operating Model to which any Business Model can subsequently be connected. Technologies such as Artificial Intelligence or Blockchain are essential to develop new product market combinations and accelerate Time-to-Market. As soon as cash flow is generated, by working from this data-centric platform (using, for example, Artificial Intelligence), it can be activated as Intangible Assets (DIA) on the balance sheet. Based on accounting principles, such an activation, provided there is sufficient cash flow over the data, leads to an exponential increase in the value of the balance sheet.

People are the key to every success

The success of an organization stands or falls with the quality and involvement of its people. That is why they are central to Digital Transformation 4.0. However, this should not be confused with a reorganization. One must be trained in data-driven working, which will significantly increase productivity.

Governance, Risk & Compliance

The final step in this holistic metamorphosis is the Governance, Risk & Compliance approach. Because what if the data-centric platform gives the organization direct access to comply with the applicable legal provisions? Then the risks of cyber breaches and other incidents are reduced to a minimum.

No money for Digital Transformation 4.0? Think Again!

This is of course a heavy story, but where do you as a company get the money to implement Digital Transformation 4.0 in the organization? Transformation certainly costs money in a time where there is no more money and time.

The Digital Transformation is based on a self-financing methodology in which the phasing out of the business, IT legacy and the transition to a data-centric platform leads to lower operational costs and value creation.

FutureXL uses a pragmatic approach in a short time frame, based on self-financing, thus making the Operating Model scalable and adaptive.

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