IN BRIEF:
• Companies can keep pace with rapid technological advancements by embracing digital transformation, upskilling employees to work with AI, and ensuring cybersecurity to protect digital assets.
• The success of digital transformation is closely tied to human emotions, necessitating leaders who prioritize empathy and a people-focused approach.
• Organizational agility, clear governance, and data governance are key to navigating the complexities of digital transformation.
In the digital age, businesses are compelled to continuously innovate and adapt to maintain their competitive edge. The advent of groundbreaking technologies is disrupting traditional practices, compelling companies to undergo digital transformation — a complex process that requires substantial investment.
This transformation goes beyond merely adopting the latest technologies; it necessitates bridging the skills gap. As artificial intelligence (AI) gains prominence, there’s a growing need for a workforce adept at integrating AI into its workflows, mirroring the agility of startups that rapidly modify apps based on user feedback.
Cybersecurity is equally critical, with data breaches underscoring the importance of safeguarding digital assets as fervently as one would secure a physical storefront. Furthermore, robust governance policies provide the strategic direction needed to navigate the digital domain, akin to a CEO’s decisive investment in blockchain for enhanced supply chain transparency.
Digital transformation is a concrete shift in business operations, using technology to transform processes and services. EY exemplifies this with its EY Digital Audit, which integrates three platforms: EY Canvas, EY Helix, and EY Atlas.
These platforms have transformed EY’s auditing process. EY Canvas facilitates global team and client collaboration, EY Helix employs advanced analytics on financial data, and EY Atlas acts as a digital repository for current accounting standards and insights. The EY Digital Audit helps ensure that EY firms around the world provide a consistent audit across more than 150 countries, linking over 120,000 EY professionals.
When executed effectively, digital transformation reshapes the entire business ecosystem, yielding enhanced results for clients and stakeholders.
UNPACKING THE DIGITAL INVESTMENT INDEX (DII)
The EY-Parthenon Digital Investment Index reveals a surge in digital investments as companies race to launch tech-driven offerings. A significant 55% of executives report digital upgrades boosting customer experience. From 2020 to 2022, firms reaping benefits from cloud and Internet of Things (IoT) technologies jumped by 54%, reflecting a trend towards AI and machine learning to enhance customer interactions and gather insights. However, those lagging in adapting strategies risk falling behind.
These findings highlight certain factors that underpin successful digital transformations: leadership, capacity, agility, data and cybersecurity, and clear governance.
HUMAN-CENTRIC LEADERSHIP IN DIGITAL CHANGE
EY Teams and Oxford’s Saïd Business School research highlights the crucial role of human emotions in digital transformation success across various sectors. It points to the importance of empathetic leadership that prioritizes people to enhance performance and drive growth. Leaders should champion technology while ensuring its smooth incorporation into everyday tasks. They must foster innovation, adopt new technologies, and safeguard employee well-being to stimulate change from the ground up.
EY exemplifies this by embracing remote working technologies, with leaders integrating tools like Microsoft Teams to facilitate seamless remote collaboration, mirroring the effectiveness of in-person engagement. EY wavespace
centers embody EY’s commitment to innovation, providing a collaborative space for teams to explore technologies like AI and blockchain, fostering a culture that values tech integration and employee well-being for digital transformation.
EMPOWERING THE WORKFORCE FOR THE AI REVOLUTION
The EY 2023 Work Reimagined Survey reveals that 84% of employers expect their employees to engage with generative AI (GenAI). To capitalize on GenAI’s capabilities, companies must prioritize extensive training, ensuring their teams not only use new tools but also possess a comprehensive understanding and proficiency in them. In the face of digital evolution, closing the skills gap and providing upskilling avenues is essential for enhancing workforce competencies.
This investment in human capital is crucial for maintaining a competitive edge. Customized learning and development (L&D) programs are key, preparing employees to adeptly manage and exploit digital advancements like GenAI. Cultivating a culture of ongoing learning and flexibility enables organizations to become more robust and positions them to navigate the future of work with a workforce that is agile and digitally savvy.
Recognizing and unlocking the full potential of the workforce is essential for any organization’s digital evolution. This leadership approach ensures that technology serves people and not the other way around, paving the way for a transformation that is both progressive and human-centered.
CULTIVATING AGILE ENTERPRISES
In the face of technological evolution, the agility of an organization is paramount for successful digital transformations. Companies must be adaptable and forward-thinking, swiftly converting emerging trends into chances for growth. Agility is also anchored in data-centric decision-making. By harnessing data analytics, organizations can discover valuable insights that inform strategic choices and propel digital initiatives.
A flexible business and tech framework is essential for supporting transformation efforts. However, many companies grapple with legacy systems, inflexible structures, and compartmentalized operations. Leaders must focus on harmonizing their tech infrastructure with their overarching business goals to foster a responsive and integrated environment.
EY demonstrates agility through its adaptive approach to business and technology. The firm actively replaces legacy systems with scalable cloud-based solutions, allowing for a more flexible and integrated tech infrastructure. This shift enables EY to respond quickly to market changes and client needs.
MAXIMIZING DATA POTENTIAL WITH ROBUST SECURITY
As digital strategies advance, organizations face increased risks of cyberthreats and data breaches. To counter this, they must deploy comprehensive cybersecurity measures, robust data protection tools, and stringent privacy protocols. Data is the cornerstone of technological progress and must be managed with strategic care and caution.
Safeguarding data is only part of the equation — effective data governance is also essential for organizations to unlock the full value of their digital assets. This means not only protecting data from external threats but also ensuring its quality, accessibility, and ethical use within the organization. With the right governance framework, companies can confidently leverage their data to drive innovation and maintain a competitive edge in the digital landscape.
IMPLEMENTING CLEAR GOVERNANCE FRAMEWORKS
The intricate nature of any transformation demands substantial resources. Amidst this complexity, there’s a danger of straying from the initial business goals, potentially slowing progress or even sidetracking the entire transformation effort. To mitigate this risk, it’s crucial for organizations to define their desired business outcomes from the outset.
Leaders play a pivotal role in crafting and enforcing detailed governance policies and a decision-centric operating model. By doing so, they provide a clear roadmap that aligns the transformation process with the organization’s strategic objectives, ensuring that every step contributes to the momentum needed to achieve a successful transformation.
CHARTING THE DIGITAL COURSE
Staying competitive means embracing innovation. Leaders must ensure digital transformations are in sync with their immediate and future objectives, including a commitment to long-term strategies and a focus on people. Awareness of employee well-being, tech progress, and emerging cybersecurity threats is key to adapting digital strategies amid new challenges.
Crucial to this journey are effective leadership, talent empowerment, agility, cybersecurity, and definitive governance. By valuing these elements, organizations can navigate the digital terrain, secure ongoing success, and maintain a competitive edge.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.
Ryan Gilbert K. Chua is the business consulting leader and technology assurance leader of SGV & Co.