“One of the key factors that causes setbacks is an unintegrated digital business transformation strategy that leads to an ambiguous vision and goal setting,” said Sunny Yi, chief digital officer of Shinhan Financial Group, at The Korea Herald Finance and Investment Forum.
“Digital transformation needs much more coordinated effort and thinking process to come up with new products and new business models than digital optimization which is more to do with productivity and efficiency which all can relate to working cheaper, faster and better,” he said.
Kicking off the forum with the first session titled, “Why so many digital transformations fail?” Yi also suggested ways for companies to make their digitalization efforts more fruitful.
With the current COVID-19 pandemic accelerating the need for transformation, digitalization has become an imperative task for every industry. But many face a harsh reality. Some 70 percent of all digital transformation projects ended in failure, Yi said quoting a study conducted by McKinsey & Co.
Yi, pointing to US auto firm Ford who struggled with channeling its digitalization ambition, said the carmaker’s new entity on smart mobility failed to integrate digital transformation efforts with the rest of the company. With a vast amount of investment having been funneled into the new venture, Ford faced quality concerns in other areas of the company, resulting in a sharp drop in share price and ouster of the CEO.
As many companies are still focusing on short-term returns, Yi said that “a bold investment can ensure fast, efficient and orderly digital transformation in business.”
With a lack of investment, companies will only be able to achieve digitization, which transform nondigital content into formats computers can process.
The next step is the adoption of robotic process automation and the opening of digital branches to bring about “digitalization,” which will allow firms to transform document-bound process into systems that can be computer-operated. But firms can only realize “digital transformation” when they make large-scale investments in emerging digital platforms and services such as central bank digital currency ecosystems and artificial intelligence.
Stressing that deploying high-caliber talent is a critical success factor in transformation, he said “not only developers, but the organization must acquire digital literacy capabilities.”
He also pointed out that disjunction between public, private firms and academics often create roadblocks to digital transformation.
“The public and academic sector should recognize that digital transformation can deliver not only long-term gains but also deliver better customer experience,” he said.
Wrapping up the session, Yi introduced digital transformation strategies that Shinhan Financial Group and its subsidiaries are implementing.
“Shinhan platform strategies are customer-centric and aim for multifaceted financial platforms that can maximize network effects,” he said.
He said Shinhan Bank and Shinhan Card are advancing their respective platforms to closely connect consumers and producers by providing data-driven services ranging from real-estate consulting to personal credit assistance.
To acquire new customers, Shinhan subsidiaries seek to attach their online sites to high-traffic lifestyle platforms so that customers can play games and conduct job searches while making transactions and shopping for financial products. Yi doubles as CEO and president of Shinhan DS, the financial IT service unit of the group.
By Park Han-na (firstname.lastname@example.org)Internet Explorer Channel Network