What is digital transformation?
We are currently experiencing a global digital transformation, where new technologies and working practices are changing the way businesses work, redefining what they offer and disrupting traditional business models. The issue is not necessarily the technology itself, but the huge consequences that it brings – from significant existential risks to incredible development opportunities.
New educational program focuses on risk management
The OECD report ”Going Digital in Sweden” applauds Sweden’s performance on the digital front, not least due to the nation’s computer literacy and extensive infrastructure.
However, our companies and public authorities are not fully exploiting the enormous opportunities, according to Caroline Malm, director of the Strategic Digital Risk Management program at SSE Executive Education (IFU). The new program is aimed at leaders of businesses going through digital transformation and focuses on how best to tackle the critical issue of risk management and its inherent challenges.
“Commercial activities and behaviors are changing all around us: customers are spending their money in new ways and priorities we’ve taken for granted and built business models around have become out-dated. Companies need to be better at both testing and implementing new digital business models and consider the risks from the start in order to become part of the new economy,” asserts Caroline.
Minimize risk through digital risk-based strategy
Caroline stresses that companies need to go back to basics and decide what they want to achieve – what is the ambition and objective of their move to digital?
“Those who actually know what they want find it easier to identify interesting new technology and new societal trends. We need a broader perspective, as the traditional sectoral boundaries are shifting and new competitors are appearing from unexpected directions.”
In order to deal with the risks posed by these changes, companies must establish strategies for the transformation process and risk management in various contexts:
- In the case of digital change for operational processes, the key is to be aware of present risks such as non-compliance with legislation or leaking sensitive information.
- When it comes to strategic development, the risks relate to the organization’s survival or relevance in the digital economy, as society undergoes fundamental change. A crucial factor in this context is the capacity to identify risks early and make tough decisions about future direction, accept mistakes and find new solutions.
- The ecosystems in which companies operate are changing rapidly. Collaborating and sharing with other players may therefore play an important role in your digital strategy as a way to realize new business opportunities and manage the risks in a fast-moving market.
Expertise, culture and resources
Caroline highlights three common risks within digital change management: expertise, culture and resources:
Lack of expertise is a risk factor that needs to be considered right from the start. Companies often need to reinforce their competence in areas such as security, law and technology. Experts in the different areas all need to communicate with each other. Dedicated people from each area need to be appointed to co-ordinate both the details and see the bigger picture. Many organizations also depend on consultants, whose expertise disappears once a change management project is over.
Maintaining a productive and positive corporate culture while at the same time making major changes is tough. A common mistake is for management to keep everything at a strategic level rather than reaching out to the employees.
“The key is to clearly communicate the purpose of the change. You might think you’ve done exactly that but you aren’t getting the expected results: employees may not be using the new technology as planned because the management has failed to explain why they should do so. Companies that manage change successfully have committed and supportive managers and owners who maintain a good dialogue with their employees.”
Resources for digital change are a common challenge. It is difficult to determine the cost of such a transformation. You may have to commit a certain amount of research and development work in advance to help define the changes you want to invest in.
Risk-based approach ensures sustainable change
Caroline points out that, while most organizations already have digital issues in their sights, the transition can sometimes be rather sluggish. Doubts and challenges that are brought up and then not dealt with well can stop important change processes in their tracks.
“Hesitation can cost organizations dearly. Taking a structured approach to identifying and communicating both the risks and opportunities right from the start makes it easier to decide whether or not the organization should take the plunge. The risk of not daring to act is particularly marked with digitally driven change, since the change is so complex and fast.”
About the program
Strategisk digital riskhantering (The Strategic Digital Risk Management program) is designed so that participants can work on their own organization’s challenges and find new ways of resolving them through innovative thinking and an understanding of the risks that need to be managed. Discussing with other organizations and thinking about alternative solutions brings your own challenges and limitations into sharp focus.
The aim is for participants to create a clear plan containing pragmatic proposals for their own organization’s digital transformation. The participants will be encouraged to tackle the challenges head on, try things out and learn from any mistakes.
(Please note that the program and information is available in Swedish only.)