Only a small percentage of Canadian businesses are leaders. Here are their insights.
By Sam Masri
Over the past half-decade Canada’s business leaders have been hearing the message loud and clear about the need to establish a digital transformation strategy.
And to their credit, 85% of Canadian enterprises have now developed one, up from 76% in 2017, according to a new SAP study conducted in partnership with IDC Canada, A Vision & Pathway to the Intelligent Enterprise.
However, simply having a digital strategy is no longer enough. Leaders must now be able to execute on it.
Facing shifting customer demands, emerging global competition, a growing skills shortage and a quickening pace of innovation, Canadian businesses need guidance on how to progress on their digital transformation journeys.
With the SAP-IDC study now in its fourth year, we wanted to examine the characteristics that distinguished more digitally advanced organizations, so we could provide insights that other leaders can emulate on their paths to becoming an intelligent enterprise (IE).
Defining the intelligent enterprise
So, what is the intelligent enterprise? It is a strategy that allows enterprises to transform data into action across all lines of business in order to drive process automation and innovation that, in turn, unlocks new areas of growth and delivers exceptional experiences.
To identify how far along Canadian organizations are in their transformation to succeed in the digital economy, IDC Canada developed this four-stage progress scale:
Observer > Participant > Challenger > Leader
Of the 303 Canadian organizations we surveyed, only 12% are currently identified as IE Leaders. While these IE Leaders are well ahead of their peers in the adoption of innovative technologies, our study revealed that the real “secret sauce” to undergoing a successful digital transformation was succeeding in the human side of business.
With that in mind, here are three key learnings that you can use to advance your organization’s digital agenda:
1. Establish a solid IT foundation.
Executing on a digital strategy means that organizations need to be agile and have the foundation in place to sustain changes in demand for computing capacity, real-time analytics and digital customer service. Building block technologies, such as cloud infrastructure, productivity collaboration tools, data management and analytics tools, and newer innovative technologies such as the Internet of Things (IoT), artificial intelligence (AI) and machine learning enable an organization to become an IE.
Our survey revealed that IE Leaders are more likely to be ready across all these technologies, particularly cloud server and storage and productivity collaboration solutions. Innovative technology adoption is foundational for organizations that are looking to take the next step in their digital transformation journeys.
2. Ensure that senior leadership is fully engaged.
Beyond the technology itself, a mindset or culture within the organization is required to become an IE. Specifically, the level of engagement among senior leaders and the clarity to which the digital strategy is articulated, contributes to success.
The SAP-IDC study found that 80% of IE Leaders have executive management enthusiastically engaged in digital strategy execution, compared to a mere 9% of the IE Observers who are falling short in their transformation efforts.
Those results echoed a finding from our 2018 report about the significance of “digital change agents”: leaders who, with vision and energy, are able to gain consensus both within and across teams and through different levels of their organizations. For without this enthusiasm, organizations ultimately fail to shift the culture of teams that ultimately execute the digital strategies.
3. Focus on the human side of the business.
There are four critical and related elements of the IE. They are customer experience (CX), employee experience, product experience and brand experience. Together, these are referred to as experience management, which is the human side of business.
Experience management is essential to becoming an IE. According to our study, CX is the second most common measure of performance of digital strategy and is clearly linked to financial performance. Keep in mind that over two in three (68%) IE Leaders believe that a stronger CX had significantly improved financial performance within their business over the previous year.
For this reason, it’s no surprise that 59% of IE Leaders plan to increase their focus on the CX versus 44% of IE Observers.
Additionally, 73% of IE Leaders will increase their focus on employee experience next year, compared to only 44% of IE Observers. This means implementing digital programs, resources and tools to track employee engagement, performance and well-being.
Human resources and employee engagement programs are of course nothing new within most organizations. However, advanced enterprises are now recognizing the importance of linking customer and employee experience, with almost nine in ten (89%) IE Leaders saying it is very important or critical to improve both at the same time as compared to just 44% of IE Observers.
Taking the next steps
While there may be multiple pathways to becoming an IE, there are several common attributes that can help your organization get on the right track.
Take bold steps. Establish a clear vision and strategy for the business and communicate that clearly throughout the organization. Invest in the foundations: cloud and analytics form the basis for any organization’s ability to scale up and derive business value from data. Advancements in the areas of machine learning/AI and IoT will come after the building blocks are in place.
Effectively deploy these technologies. Empower your teams to use the intelligence and insights to impact the business positively. Ensure experience management is included in strategy and has a holistic view by tying CX to employee experience.
Finally, Build agility into the talent plan. The most progressive organizations succeed by anticipating change skill requirements and changing the mix of employees and training programs as needed.
Sam Masri is chief operating officer, SAP Canada.