Q: Does embracing digital transformation mean overhauling your entire business?
A: Digital transformation – defined as transformation of business models enabled by new technology capabilities and seamless, omni-channel experiences – has had an impact on many industries, from transportation to financial services, writes Chandra Dhandapani, chief digital and technology officer, CBRE.
Having spent 17 years in financial services, I see many parallels between where banking was five-to-seven years ago, and where commercial real estate seemed to be when I joined the industry in 2016. This was an industry that had been relatively untouched by technology and was just entering an early stage of digital transformation.
Fast-forward to today. If the number and pace of emails arriving in my inbox espousing a new technology, a start-up or newsletters relating to proptech are any indication, some would say we are seeing a dramatic shift playing out. In the beginning, there was a question of whether this frenzy is similar to the dotcom boom and bust of the late 1990s and early 2000s.
However, most companies in the industry seem to be increasingly aware of key emerging trends and to be doing something in response to these trends. If you are an investor in commercial real estate, or in any decision-making role related to the sector, you are likely going through the classic change curve – sometimes totally in denial, days when you think “I’ve got it”, and then again, another news item knocks you on the head and takes you back to square one.
So, how does one sort out the hype from reality and make decisions at both strategic and tactical levels?
Companies seem to respond through one of two different paradigms: Option 1: Create a digital business unit or function that can respond rapidly to the changing landscape which is distinct and separate from the rest of the company. Sometimes this separation happens within a function like IT – referred to as “bimodal IT’ or ‘two-speed IT’. In other cases, it happens at the overall company level. Option 2: Transform the entire organisation to be digitally savvy.
I believe that significant and sustainable wins come from transforming the entire organisation rather than just one part. Option 2 may seem slower and is much more challenging in the beginning, but the rewards are typically much greater because the organisation evolves and learns to adapt to the changing landscape, no matter what the changes are.
At this stage, even if you agree with my belief on option 2, you might be wondering, how do we get there? There are three “must haves” for a successful digital transformation:
■ Talent: Recruit for or teach digital savvy at multiple levels of the organisation.
■ Agility: Adopt agile as a methodology not just within technology, but across the organisation
■ Unity of purpose: cross-functional collaboration and common purpose are key to success. Typically, startups have this by design.
As we build those “must haves”, here are some key things to consider:
■ Develop a deep understanding of how the needs and expectations of customers are changing;
■ Catalogue key emerging digital trends that could cause paradigm shifts in the business model;
■ Understand where value is generated in the industry today, and emerging expectations as well as trends that may affect those value drivers;
■ Contemplate what a digitally savvy company would do if they were to create the services that customers need.
Clarity on these items makes it easier to craft a “digital-embedded” business strategy. Every organisation is different, and culture defines success more than strategy so one will have to tailor this list based on what works best in their organisation.
