The COVID-19 crisis has led to a rapid acceleration of digital transformation projects as organisations quickly pivot to online channels.

But for some, it has exposed age-old problems that will only serve to limit the effectiveness of their change programs.

According to the National Managing Partner of KPMG's Management Consulting Group for Australia, Ian Hancock, the demand for rapid transformation has exposed the siloed nature of many businesses.

“The COVID-19 pandemic has supercharged the need for businesses to transform. In today’s world if you’re not digitally connected it is unlikely that you are going to survive,” Hancock says. “But COVID has highlighted significant weakness in organisations’ preparedness to operate in the new, digitally connected world.”

This has translated to the realisation that for digital transformation to prove successful, a holistic approach is needed.

“You can’t successfully transform one part of an organisation without also considering all of its other parts,” Hancock says.

Hancock says KPMG’s approach to this requirement is the Connected Enterprise, a program and set of tools which view transformation through five lenses (customers, employees, internal processes, channels and business partners, and market dynamics), and maps out eight capabilities that organisations must develop to transform effectively. These include being insight-driven, having responsive operations and supply chains, having an aligned and empowered workforce, and being part of an integrated partner and alliance ecosystem.

“A connected enterprise is an organisation that is digitally connected across customers, employees, business partners and channel partners,” Hancock says. “And it is using digital technologies to map the market dynamics to inform their product strategy.”

Hancock says those organisations that have failed to take a holistic approach to transformation have often been the ones caught out through COVID-19, such as retailers that lacked visibility into their supply chains and suffered subsequent fulfillment issues.

Another common problem has been businesses inability to read and act on the signals the market was sending them, such as translating social media and contact centre interactions into customer insights.

“Those businesses who are set up to actively monitor information such as social media and customer feedback and generate usable insights have a significant advantage in turbulent markets,” Hancock says.

“In fact, we estimate that those organisations who have the eight capabilities of a connected enterprise are twice as likely to successfully transform digitally as those that don’t.”

But for organisations struggling with their transformation challenge, Hancock says it is not too late. He says the first step is for functional silos to be merged. And while many organisations have adopted quick-fixes to navigate the COVID-19 crisis, Hancock says it is vital they still regard transformation as a long-term strategy. “Even in rapid change programs, a connective transformation still needs to occur. If you can’t get your front, middle and back office systems and processes operating effectively in this environment, then you run the risk of being obsolete,” he says. “Start small and expand, but always have that bigger picture in the back of your mind.”

This approach will also help organisations to respond to underlying customer-driven trends that will live on for many years.

“Customers are more connected, more empowered, and more demanding than ever, and they want a personalised, effortless simple quick interaction at low cost,” Hancock says. “The age of the customer has come about and is here to stay.”

And while some organisations have to date held out against the need for change, Hancock says any remaining resistance has been blown away by COVID-19.

“It has proven the need and increased the awareness and generated the case for change which many organisations didn’t have,” he says. “That’s a really important thing, because it has focused the mind.”

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