Applied properly, digital transformation can:
But for many leaders, their fear of technology is getting in the way.
I aim to dispel some of the 6 biggest myths around digital transformation that are holding hospitality businesses back and offer solutions that can help businesses create competitive advantage and sustainable profit with the help of appropriate, tailored technology solutions.
MYTH 1 – Improving IT leads to digital transformation
As business leaders, we always need to start with solving problems to lead to new business opportunities.
Simply improving IT and hoping that digital transformation will follow does not work. If you just upgrade your IT structure but keep your operational structure the same, you won’t see the necessary transformation that solves problems with business processes.
Hospitality leaders can take inspiration from technical solutions to support transformational business processes that will deliver a competitive advantage. Solutions can then be tailored to fit the business’ capability before implementing the transformation.
MYTH 2 – Digital Operations create a strategy and are transformational
Often, what we call a strategy is not a strategy at all, it’s a plan.
A plan is useful for operational effectiveness: best practices, budgets, cleaning schedules, cost control plans, improving plans of executions etc. It has clear targets and statements about how to improve revenues and profitability.
Strategy on the other hand is about knowing where you are going, looking at what the problems are with getting there and getting the team working together to find ways to overcome problems. The strategy must be about how you change the organisation to accomplish that.
Strategies require the operating processes in an organisation to shift to solve problems and to sustain and grow profitability.
In digital transformation, we always start with the customer.
Delighting the customer will come from collaborating within and outside the business. The leader’s role is to do away with barriers so that ideas can be developed, and outcomes achieved using the inspiration of technology to help in the transformation of business processes.
The strategy then backs this up and explains this to the organisation, partners, investors, and board members, to set out what we are going to do and how we are going to do it.
MYTH 3 – Marketing and PR must be in charge
Marketing and PR are just one element of a hospitality business. Their role should be to help position the business in the digital economy at a higher position than your competitors and to increase the number of customers who can pay for your rooms and services.
The role of the organisation’s leadership is to steer the business and direct the Marketing / Comms / PR and IT teams in which digital technologies are to be used and tailored to enable business process transformations. If Marketing and PR are in charge, a business won’t be able to transform.
The other vital element in Human Resources. They need to explain the innovation of business process transformations and to ensure employees understand and support it. No employee should be scared of changing working processes.
If Marketing and PR cannot express the added value that digital business process transformations bring to the staff, customers and suppliers, you cannot create a competitive advantage and there will be no transformation.
MYTH 4 – All digital transformation strategies are good strategies
I would argue that a digital transformation strategy should not be called “Digital” at all. It is in fact a business strategy that incorporates digital technology in the transformation.
Competitive advantage comes from every element of your business: from the purchasing department getting the right price; from human resources attracting and retaining the best staff and getting the most out of them; from Sales and Marketing increasing customers and revenue; from housekeeping and F&B improving efficiency, hygiene, cost control and wastage etc.
When they create a strategy, hospitality leaders often get help from management or technology consultancies, then just implement them without asking questions.
Often in these cases, the focus is on technology, rather than on business outcomes and there is often more focus on communicating values but not necessarily on how the strategy will be executed.
Really good strategies understand that it takes the whole organisation to shift mindset.
MYTH 5– Any digital innovation is better than no digital innovation
Why do you need innovation to change your business processes in the first place? Well, innovation is needed to craft your market position and competitive advantage.
Innovation is really the fuel that makes that happen. But the question is which innovation should you invest in?
Innovation just for the sake of it won’t solve problems. Unless you fully understand what, the problem is that you are solving, it’s easy to get sucked into the blue sky thinking where any innovation is considered worthy of consideration, whether it solves a crucial problem or not.
The best innovations are very focused, directed and very targeted at solving specific business problems.
Where do these specific business problems come from? That’s the diagnostic part of the strategy again. The strategy is there to help define where you are, where you are going and to give a guiding policy.
The coherent action that teams need to take is to work to solve the diagnosed problem/s identified in the strategy.
Collaborative innovation happens when we start to work with partners external to our organisation to create a product or service which has the strategic imperative of starting with the customer problem.
Innovations need to focus on customer problems, then evaluate how solving them aligns with the strategic goal. The answer to the question of which tailored technology can help and how it will work commercially will then unfold. Once this is formulated and agreed upon, you need to test the market and build the business case or evidence for using that solution.
The innovative product that comes out at the end is much more likely to succeed if it has
started with the needs of customers first and aligns with the strategic aims of the organisation.
MYTH 6 –The digital mindset will come
Implementing digital technology in a business is not like other projects that you can just layer on top of the organisation, especially when everyone is busy and working flat out.
In today’s digital economy, there is an inordinate number of distractions that prevent managers and leaders from getting space and time to think deeply about business problems: firefighting, emails, reports, power calls, guest handling, employee management, cost controls. The list is endless.
Transformation is never going to happen in this kind of environment because significant changes in the business processes require deep thinking.
Hospitality leaders need to start focusing on how digital technology can help to create innovative business processes which help improve profitability. Yet today most organisations still prefer to patch up broken systems and methods, which is a complete waste of money.
The key is solving some of the hospitality industry’s fundamental, frustrating problems by giving managers and leaders time to focus on digital solutions to support business process transformations.
They can then come up with a solution that leverages digital technology in business processes or accept that the problem is currently unsolvable and move on to the next problem.
Creating a digital mindset is not enough. It needs action.