In today’s rapidly evolving technological environment, digital transformation has become vital for businesses to maintain their competitive edge. The business landscape has changed dramatically in the last several years with many organizations implementing new technology to increase productivity and profitability. Digital Transformation strategies are being embraced to improve operational efficiency, competitive advantage and securing business continuity. However, digital transformation is a continuous process that is driven by the ever-changing digital space and the board plays a key role in steering the company through this intricate journey.
Digital transformation can take various forms such as Business Process Transformation, Business Model Transformation, Domain Transformation and Cultural Transformation . Business process transformation involves leveraging technology to update internal operations. For instance, automating tasks that are typically done manually as exemplified in the healthcare sector where data collection and storage has moved from using physical paper to being computerized. Business model transformation, on the other hand, aims to alter the traditional business process by using technological tools to deliver products or services in a differentiating manner. An example of this is Uber which has entirely transformed the taxi hailing landscape.
Domain transformation refers the use of current technology to broaden product or service offerings. An example of this is Amazon which expanded into a new market domain with the launch of Amazon Web Services, a cloud computing infrastructure. Cultural transformation is a process of altering the company’s values, beliefs, and norms to align with its strategic goals and envisioned future. This could entail adoption of emerging technologies and supporting digital innovation. This is exemplified by Netflix, an organization that moved from traditional hierarchical model to a culture of freedom, innovation and responsibility to revolutionize the entertainment industry.
Each organization’s digital transformation journey will be unique but there are a few consistent elements and shared themes that all business and technology leaders should consider as they embark on digital transformation. This includes Customer experience, Operational agility, Culture and leadership, Workforce enablement, and Digital technology integration.
Although the board is not involved in the day-to-day operations of the Company, directors can play an active part in the digital transformation process by establishing guidelines, enquiring about pressing issues, challenging projected results, identifying inadequacies and encouraging the Management team. The board can guide digital transformation by reviewing and approving digital strategies that align with the overall business strategy. Establishing short- and long-term strategies is the duty of the board and in carrying out this function, the board can consider a suitable digital strategy to sustain long-term business growth. Alignment of the digital strategy with the overall goals of the Company will ensure that strategic business initiatives remain the focus area. The board can establish a committee to oversee the digital transformation process.
To achieve its digital transformation goals, organizations need to make substantial investment in technology, personnel, and infrastructure. The Board should carefully consider the proposed investment and ensure that resources are fairly and judiciously allocated and properly accounted for.
Emplacing suitable leadership and culture within the organization is another way the board can participate in the digital transformation process. Leadership is critical to the success of the Digital Transformation process. The Board should pay attention to the recruitment of senior management executives and would need to consider the traits, competencies and talent needed to help create a culture of innovation.
People play a crucial role in digital transformation and the board needs to ensure that employees are adequately trained to drive necessary innovation in line with the digital strategy of the organization. To this end, the board should consider and approve training plans for both directors and employees to ensure adaptability in the face of a changing environment. In addition, proper succession planning should be emplaced to minimize risks arising from loss of business knowledge.
Another way the board can participate in the digital transformation process is by risk assessment and oversight. There are several associated risks with digital transformation and the board has to ask tough questions to ensure that associated risks have been meticulously identified and are being monitored. These risks include cybersecurity threats, data privacy concerns and potential disruptions to existing business models. The board should carry out extensive risk assessments and collaborate with management to establish policies to govern data management as well as measures to promote cybersecurity.
To ensure a successful digital transformation, the board must measure and monitor key metrics and performance indicators. By assessing progress and identifying what is and isn’t working with digital transformation, the quality of future decisions will be enhanced and desired outcomes achieved. A holistic approach to measurement evaluates both digital adoption and transformation success across a broad range of perspectives including commercial expectations, customer satisfaction, operational efficiency and work culture.
Examples of successful implementation of digital transformation, with the support of the board of directors, include Starbucks , which grew to become the third largest restaurant chain in the world by blending technology with coffee culture. The company adopted the use of a Mobile App on which customers can order and pay in advance, share personalized recommendations with customers, provide information on store locations and track customer rewards. In addition, the adoption of a digital in-store experience led to increased efficiency. The outcome of the digital transformation process at Starbucks has been increased customer engagement, enhanced customer loyalty, higher sales and revenue as well as market leadership.
In Nigeria, while various sectors have adopted some digital transformation strategies, a lot of potential remains for the country’s digital economy. One company that has successfully implemented digital transformation strategies is MTN Nigeria. Recently, MTN Nigeria has undertaken an impressive transformation journey, moving beyond its traditional role as a telecommunications company to establish itself as a strong presence in the digital space. By using advanced data analytics and adopting cloud computing services, the company is embracing technologies that extend beyond conventional telecom services. This transition enables MTN Nigeria to offer a wider array of services and enhance customer experience.
The World Bank has reported that Nigeria captures only a fragment of its digital economic potential. Although the Nigerian government has introduced a Strategic Roadmap and Action Plan (SRAP) to boost the digital economy , a lot needs to be done to implement the plan and achieve the desired objectives.
Digital transformation has become necessary for organizations to thrive in the technological world of today and the board is critical to a successful process. Whatever form of digital transformation an organization seeks to adopt, the board will guide the company by overseeing the process without delving into the daily operations of the business. There is a need for businesses in Nigeria to pay closer attention to digital transformation and support the government in its plan to boost the digital economy.