Often, the biggest barrier to change, particularly in Asia, is the company culture. Many companies lag behind in processes and technology when it comes to digital readiness. For transformation to be effective, leadership must be prepared to make a cultural change and look at the educational aspects of transformation as priorities.
CEO must assume that industry and business model changes will be forced by new digital entrants or an adjacent competitor. They will need to take risks and develop agile processes in order to stay ahead. While the traditional players try to make sense of the changes, digitally mature companies are far nimbler, and do not require traditional approvals or a detailed business case to make changes.
Learning from the leaders
Globally, we have seen a number of companies leading the way in this transformation. Capgemeni Consulting describes the leaders as 'Digirati' companies. Digirati companies, says Capgemeni in a 2015 study, are 26% more profitable than their industry competitors, generate 9% more revenue through their employees and physical assets, and create more value, getting 12% higher market valuation ratios.
Digirati companies are characterised by strong leadership, vision and governance, and are able to align investments along a common direction. They weed out activities that run counter to the future vision of the transformed firm and are able to engage employees in identifying new opportunities.
Amongst the leading digital companies, Starbucks have increased their customer engagement with the introduction of a Starbuck Digital global network, allowing the company's leadership to obtain insights into the desires and needs of its connected consumers.
Within a few years, China conglomerate Alibaba, driven by leader Jack Ma's evangelism, spawned a number of successful e-commerce sites and apps, from Taobao to AliExpress and AliPay, and now dominates 80% of China's online retail sales.
In BT, we have undertaken an operational transformation for the past five years, focussing on customer service, cost transformation and investing for growth.
We have made progress in reinventing our customer service over the last two years - transaction volumes are now dominated by self-service, through a combination of B2B gateways and customer portals. Cost transformation has delivered over US$1.5 billion (£1 billion) of cash savings in the last five years through process re-engineering and through significant network rationalisation, particularly in our global networks. Progress on closing our old networks and data centre infrastructure has reduced our power consumption every year since we started the programme.
Like many business worldwide, we had to contend with challenges in managing the speed in which we can implement new standards and digital capabilities on different devices, as well as to deliver the experiences that our customers want. Every programme or activity we do now has a digital aspect.
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