Addressing Digital Transformation Risks: Best Practices to Realise Impact with Budget Constraints

Digital Transformation implementation is unique for organisations because it would depend on the IT infrastructure maturity, and the business strategy that they are planning to achieve. Unlike big companies who have the luxury of budget spending on technologies, most companies need to face tough decisions when considering for a digital transformation implementation due to various reasons. In addition, the impending economic slowdown further adds to the budget constraints, making it difficult to experiment and take risks.

Ts. Saiful Bakhtiar O.
Head of IT – APAC
The ASCENT Group

Many of these implementations failed, not because of the company did not have enough money, but because they failed to plan properly. We do not embark into Digital Transformation only because we are following the trend. Simply because everyone is going for Digital Transformation, it does not mean the same will work for your company. It would require lots of planning and clear directions on what exactly the expected Return-on-Investment (ROI).

In my opinion, a company needs to address Top 3 Risks of Digital Transformation to decide the go-ahead or their readiness:

1. Management’s Buy-In

Getting the Management’s buy-in is tough, and it is the responsibility of the CIOs and the CISOs to clearly brief the Management on what are the benefits and the risks of digital transformation for the organisation. They need to understand clearly what is at stake and what are the plus points they are getting out of their investments.

Well, coming from a PRINCE2 school of thought, my approach would be to start with the question, “What if we do nothing?” Your stack of 20-30 pages of proposal would mean nothing if the Management has already rejected the idea from the start. ‘What if we do nothing’ is referring to staying where we are, and not going to take any improvement initiatives. The Management needs to consider and decide the risks that the company must face should they opt to stay stagnant:

• Will the company lose competitive advantage over their peers in the market?
• Will the company face extreme penalty of non-compliance to the regulatory requirement?
• Will the company lose the market initiator benefit?
• Will the company be open to critical vulnerabilities that would harm the business?
• Will the company find it difficult to attract new potential customers and retain the existing ones?

The technology risks should be translated properly into business risks to ensure that CIOs and CISOs and the management are speaking the same language. I am certain that with all the preparation in place, conveyed in a manner that makes sense to the Management, getting the approval would not become as hard as we would have imagined.

2. Budget Constraint

A limited budget should not become the stumbling block for organisations to implement the Digital Transformation initiatives. As I mentioned earlier, not all companies have the privilege of not worrying about the budget and could easily spend to procure the latest technology for their use. Thus, it is important to come out with a technology blueprint as a definitive guide, with the span of 2 to 3 years. Hence, we can implement the initiatives in stages while still hit the desired end goals. This 3-years plan or blueprint is important because:

• A single point of reference for all, especially the Management to see what has been achieved and what has yet to be rolled out.
• It will keep the momentum going, because it is not easy to get the Management’s buy-in and the staff support, and hence this should be a continuous exercise with tangible results.
• The company would be able to track and put aside annually the spending required for each stage.
• This will make sure the project would not stray away from its objective regardless the change of personnel in the project.

So, how do we decide which one to go first? I would like to share my BRAG Rule of Thumb to handle this kind of decision:

• B – Brings value to the stakeholders – Out of these projects in the pipeline, we should choose the ones that directly impact the company’s bottom-line. It must be something drastic that would recapture the customers in the market, such as upgrading the Customer Experience (CX). It should be a strong statement to the business world that we are not losing out in this technology race.
• R – Right Fit for the organisation – This is how we spend wisely and not simply follow the trend. There is no ‘one size fits all’ kind of solution. Therefore, whatever the technology we choose or the enhancement we are trying to make, it must specifically be tailored to your environment. Besides, we would understand the overall infrastructure and the business environment of our company the best.
• A – Aligns with Business Goals and Strategy – The intent of the Digital Transformation itself is to achieve the strategic goals aligned by business. That is why we should not include other upgrades that are not related to these goals. Some people would take the opportunity to include other important upgrades to get a lump sum approval than risking tabling another proposal paper just for this upgrade. Even it was done for the benefit of the company, it would not be proper to take such a tricky way to get your papers approved.
• G – Good balance – We need to balance the project between these stages, and to make sure that our users have time to adopt, learn and practice. At the end of the day, they are the ones who are going to be using all the new applications or systems introduced to the organisation. The balance includes the technology, the compliance, and the process as well.

3. Potential Push Backs from Users

The Staff or the end users are one of the key elements to determine the success of this Digital Transformation initiative. They are the ones running the daily operations and being at the frontline facing all the Customers. I agree that some end users are very reluctant to accept change, but most of them are quite willing when we provide them with the right exposure, training and understanding. It is also crucial that this initiative should come from the Top Management, to set a clear statement that this is a company’s initiative and not an IT initiative.

The users need to be involved since the beginning to make them take ownership, understand the importance of the initiative to the company, and to support the overall initiative. We shall be able to get the user’s commitment with the following activities:

• Process review and improvements – It is important to revisit all the existing processes and to make sure they are still relevant when moving to digital. Since the users are the ones following the SOPs and process every single day, they need to identify which process are overlapping and which processes we can do away with to make the digital process more efficient and increase productivity. We should conduct workshops with key users to facilitate this brainstorming and welcome any dispute within themselves to shorten the process for a more efficient and practical process. Like my previous CEO used to say, “We need to do the right things, and not only do the things right”.
• Discovery and classification of information asset – We need to get the staff to discover and identify all the important information asset of the company, be it hardcopy, softcopy, email archives, presentations, etc. This is an important exercise for the company to make sure all the information assets are available and accounted for. Subsequently, we would need our users to classify all this information asset to ascertain the criticality of each data. This would give sense of ownership to the users on information data that is critical for their work and for the company. With a limited budget, it is not possible for the company to protect all the information asset. Hence, the discovery and classification of these assets would allow the company to apply the strongest protection or the strictest rule to the most critical asset.
• Continuous training and awareness session – The users need to be continuously educated and trained with the latest technology so that they can participate actively in whatever new technology is introduced by the company. Simply handing down instructions from the Heads would not suffice because competency is achieved by continuous training. Some companies may be reluctant to train their staff because of the fear that the staff may leave the organisation. On the contrary, the situation would be worse if they stay without being trained, and you would have a pool of non-knowledgeable staff to run the organisation. The training should also cover the cybersecurity and emerging threats. This is also important to protect the staff from falling prey to malicious traps that would jeopardise the company’s operations and data.

Taking the first step

There are plenty of ways to skin a cat, and budget limitation is not an impediment for your organisation to embark in the Digital Transformation journey. All you need is proper planning and clear directions from the Top Management. The company needs to understand the risk appetite that they are willing to take, and to have a realistic ROI expectation. With the rapid growth of technology, a company must not spread the implementation stage for too many years, which may result of the technology being obsolete by the time the whole exercise is completed. After all these considerations and due diligence, all you need is to start taking the first step. Good luck!

About the author

Ts. Saiful is a seasoned multiple-awards winning CIO with an MBA. He is currently the Head of IT – APAC, for the ASCENT Group, a Singapore-based Global Independent Fund Administrator company, with presence in 11 countries across Asia Pacific. He was listed as the World CIO 200, by the Global CIO Forum, for the year 2022, 2021 and 2020, as a recognition to his achievement in the industry. He was also ranked as Top CIO for ASEAN for 3 consecutive years, 2021 (CIO75), 2020 (CIO50) and 2019 (CIO50) IDG (now known as Foundry).

He brings with him a 22-years of experience in diverse industries such as Fund Management, Oil & Gas, Financial & Banking, as well as in the Economic Regulatory Body. He is also actively participating in IT events and summits as a Speaker, Panelist or Moderator, both locally and cross border, as his way of giving back to the industry by sharing his knowledge and experience.