Organisations must get their digital strategy in place first if they want their digital transformation to succeed.
You may recognise this scenario: A senior leader attends a conference where she learns of A/B testing as a data-driven way to optimise the user experience. After the conference, she asks her team to "do" A/B testing and also approves the budget to buy a tool. If you zoom out, you can see the same story unfolding in other parts of the organisation, be it the purchase of a new tool, the launch of a new app or the rollout of a new service.
A point solution by definition is a tool, product or service that is used to address a single, specific problem. There is nothing wrong with rolling out point solutions per se, but they become a serious threat for organisations undergoing deliberate and intentional digital transformation. If your organisation is pursuing digital transformation with free play on point solutions then, your transformation may end up like a Franken-car. Each department and business unit goes after digitalisation in their own silo ways and the organisation as a whole becomes a Franken-mess.
If not point solutions, then what? Systemic interventions.
A systemic intervention is a deliberate action that is aimed at improving the overall digital muscle of the organisation.Getting an A/B testing tool can be a systemic intervention if it aligns with the organisation’s overall strategy to build its data analytics capabilities and the tool is available not just for one department but to the entire organisation. In this case, you are looking at a customer analytics platform rather than a point solution. A platform, as Isaac Sacolick in Driving Digital defines it, is “any single technology or stack of technologies designed to be leveraged in more than one product, application, or business process.”
If you are leading your organisation to become a digital master or executing a mandate to digitalise your business unit, your number one priority must be to create a digital strategy... Resist the siren song of point solutions.
Why do organisations land up with the culture of using point solutions? The short answer: they don't have a formal digital strategy.
The 2021 Digital Vortex Report released by the Global Center for Digital Business Transformation revealed the dreaded knowing-doing gap: leaders know about disruption and the need for transformation but the execution is lacking. According to the report, the total number of organisations that had some form of a digital strategy increased by about 7% between 2019 and 2021. But more of them reported a fragmented digital strategy instead of a coordinated one.
Michael Porter, the business strategy guru likes to say, “The essence of strategy is choosing what not to do.” With a digital strategy in place, it becomes easy to make decisions on which tech to purchase because the strategy forces you to address matters of capability, scale and organisational change—the real stuff that can make you a digital master.Does this imply that a digital strategy must come first?
Ideally, yes. But in our practice, it is not uncommon to have businesses ask us for point solutions. The requests fall into two buckets:
In both the above cases, instead of just servicing their immediate need, we try to take on another job—to find ways and means of helping the business leaders to see the need for a digital strategy and the need to think holistically about the point solution. We call it "Double-loop transformation". We are happy to report that in many cases the point solution became the rallying cry inside the organisation to craft a digital strategy and shift energies to executing the strategy.
One of our clients in the energy sector used to have a point solution each for their website, e-commerce store and analytics. On their own, the point solutions functioned well for a while. Then the customer expectation and the competitive landscape started to change and the organisation had to adapt quickly—but they couldn’t. The point solutions now had become a bottleneck for change. Armed with a robust digital strategy that mandated flexibility and scale, the organisation embraced a digital experience platform that could execute the strategy. The transition to the platform took over a year, but they are already reaping the rewards with an integrated website, mobile app and e-commerce experience.
If you are leading your organisation to become a digital master or executing a mandate to digitalise your business unit, your number one priority must be to create and execute against a digital strategy and not allow point solutions to proliferate and create a digital Franken-mess. Resist the siren song of point solutions.
This article was first published in The Edge Singapore on 15 February 2022.