The long list of technology options can be daunting to organizations seeking to transform. Here’s a simple method for narrowing it down.
Digital transformation isn’t like flipping a switch. It’s a slow and often messy process, but for those that pull it off, it can make your business more efficient, more productive and more profitable.
I’m here to help. As the author and instructor of the Watspeed Digital Transformation Certificate Program at the University of Waterloo, I’ve studied organizations big and small to learn what makes for a successful transformation—and how to avoid problems that lead to a digital dead end.
Every month, I’ll share a new lesson on how to steer your organization through the rough waters of digital transformation. Yes, there will be homework. But if you pay attention and put in the effort, it won’t be long before you start seeing real results.
The range of technological options available to organizations today is immense. It’s like being in a restaurant with a very long menu—there are many mouthwatering possibilities, but your stomach (or your budget) forces you to choose. Similarly, the menu of technology options can be daunting to organizations seeking to digitally transform. How do you know what to choose?
Later on I’ll share a simple tool that will help you narrow it down. But first, it’s crucial to understand two things about effective technology selection: strategy and collaboration.
A strategic foundation and collaborative approach
Technology investment decisions and the projects that follow from them should always be based on strategic objectives. It is important to take the time to properly understand the environment in which your organization is operating, technology trends, activities of competitors, etc., and to make judgements about the future direction that your organization should take. If you’re stuck on this step, don’t worry—there’ll be more lessons to come on this topic. But for now, we’ll assume this has been done and that it is well understood by those participating in technology decisions (though often it isn’t).
Knowledge of your business and the technological options open to it must be effectively combined in and between your organization’s various divisions, departments and functions, and sometimes externally within an ecosystem of customers and suppliers. This is why it’s imperative that technology decisions are made collaboratively. Those with expertise and responsibility, and with knowledge of the business and technology, need to be able to work well together to make the best decisions for digital transformation.
The trickiness of technology decisions
The information technology solutions available to support digital transformation are advancing and expanding daily. Most organizations understand that technology-based change, accelerated during the COVID-19 pandemic, is here to stay and for many, it poses an existential threat. Understanding how this impacts your organization and developing your response is critical to survival.
Understandably, technology vendors are keen to win as much business as they can. Each technology solution they offer focuses on an area of benefit to many organizations and will have a positive business impact. A business case can reasonably be made for many of the solutions available to many businesses.
For example, a manufacturing company may have viable technology investment options in process automation, data gathering and analytics, customer relationship management, process management and control or robotics, all of which might benefit from the application of artificial intelligence (AI). There may also be benefits in operations, sales, human resources and beyond.
Making decisions about where limited financial and other organizational resources (such as technical skills, project management, leadership attention, engineering skills and equipment) should be focused is a significant challenge for most organizations. Choosing where investment should be made and which technologies to use requires a clear digital transformation vision and strategy.
Your homework: The digital technologies selection template
To help you carefully combine your skill and knowledge in selecting the right technology for your organization, we developed the digital technologies selection template. Designed to be used by groups, it fosters a common commitment to the success of your decisions through a participative approach.
The digital technologies selection template enables you to make informed choices between technology options. It is important to evaluate not just the technologies, but are also where and how they will be used. The template is based on seven categories, described below, with each category evaluated on a 6-point scale. A 0 indicates that the criteria has not been met and a 5 indicates a high degree of strength in that category.
The categories are as follows.
Strategic Alignment
To what extent does the proposed technology investment contribute to the strategic objectives of your organization? Investments which are not consistent with strategic objectives should not be pursued.
Urgency of Need
Does the investment meet a pressing need that if not met very soon will cause harm to your organization or prevent it from taking advantage of an important opportunity? Urgent organization needs should be a priority for investment.
Execution Capability
Does your organization have the capability (skills, knowledge and resources) needed to introduce and utilize the technology? If not, how easily can it access this? If execution capability cannot realistically be available and utilized, then the technology option is not feasible. Introducing the technology in the future may be possible if internal or external capability can be developed.
Business Performance Impact
What will be the impact of the technology on the performance of your organization? Consider the key performance metrics for your organization and how the technology will impact these.
Implementation Timeline
How long will it take to introduce the new technology? If the need that it is meeting is urgent, will the desired results be achieved in time? Will disruption of existing activity due to the implementation be tolerable to your organization?
Ease of Integration with Existing Technology
How easily will the new technology be integrated with the existing technologies in your organization? Will specialist help be needed for this integration, and how confident are you that the integration is feasible? Many technology implementations fail because this aspect of implementation has been neglected.
Future Potential
Is the technology consistent with the plans of your organization or will it quickly become obsolete?
How to use the digital technologies selection template
The best way to use the digital technologies selection template is to display it on a screen or whiteboard so that a group of people can contribute simultaneously. No transformation will be successful if it cannot effectively combine the skills and knowledge of a wide range of people.
Participants should determine their own ratings for each transformation project being considered, with the resulting discussion developing a consensus on the ratings for the group. It can be helpful to aggregate numerical ratings as part of the process of achieving consensus.
Here’s an example of how an electrical power generation facility might use the digital technologies selection template:
Today we looked at a simple method for selecting your digital transformation technology, the digital technologies selection template. You can better understand its use by reflecting on a how it could be applied in your organization. Think about who would be involved, what your own ratings would be, and how you would overcome any challenges you might face. If you successfully use it to make your own choices, I’d love to hear about it in the comments below.
Next lesson: How to develop your digital transformation strategy
Next month I’ll explain how to create your own digital transformation strategy, the foundation for your technology selection. I’ll also provide another simple tool to help you do it. Until then: class dismissed!
