Business value alignment, changing behaviour, and establishing baseline crucial in digital transformation journey, says KPMG China’s Stanley Sum

Sum stressed that successful digital transformations have to be business value-led, and both IT and business functions should be responsible for inputs and outcomes.

In today's hyperconnected world, digital transformation is no longer a choice but a necessity for organisations to remain competitive and relevant. It presents immense opportunities for growth, innovation, and operational efficiency. By embracing digital transformation, organisations can unlock new revenue streams, optimise processes, improve customer experiences, and stay ahead of the curve in an increasingly digital-first marketplace.

Stanley Sum, Partner for Advisory at KPMG China, has extensive experience in this field, with over 15 years of experience advising organisations across different sectors. He works in KPMG China’s Technology Consulting practice and is experienced in digital strategy, technology function optimisation, digital capability assessment, and solution implementation.

Sum acted as the lead consultant in numerous digital transformation programmes across Greater China, assisting clients in strengthening their competitiveness and innovation capabilities.

In a Q&A with Hong Kong Business, Sum explored the key factors, challenges, and opportunities surrounding digital transformation and technology consulting. He also delved into the nuances of digital transformation and explored the evolving role of technology consulting in the future landscape of this dynamic industry.

With your extensive experience in advising organisations on digital transformation, what are some key factors that contribute to a successful digital transformation journey?

From our experience of working with different organisations, we observed three key factors crucial to a successful digital transformation. First and foremost, it is the alignment to business value. Enabling digital capability does not necessarily mean implementing the most cutting-edge technologies possible. We must look internally to seek potential synergies and identify the right solution to multiply business outcomes, and in the meantime, working closely with businesses to identify the necessary changes to create a conducive environment and ensure seamless integration.

Another key factor differentiating digital transformation from conventional business transformation is the change in behaviour and mindset. As technologies are ever-evolving, so is the meaning of being digital. Therefore, digital transformation is a long-term journey that continuously drives cultural changes to encourage organisation agility and open-mindedness to new ways of doing business.

Last but not least is the awareness of “where we are”. Before embarking on a digital transformation journey, an organisation must identify its baseline, thus setting its goal. We have seen companies fall into the hoax of blindly following market leaders and setting unrealistic targets. What works for one company might not work for another. It is always our recommended approach to assess an organisation’s current state before determining the right benchmarking target and transformation path.

In your experience, what are some common barriers or obstacles that organisations face when implementing digital transformation initiatives, and how can these be overcome?

A common obstacle during implementation that we have seen is departments competing for priorities. As resources and budgets are limited and it is natural for each business unit to fight for what is best for them, companies would experience obstructions in determining the best way forward. For companies to overcome this challenge, we suggest that the leadership first establish a clear strategic imperative that is communicated across the organisation and, simultaneously, obtain a thorough understanding of the digital maturity levels of each business unit. Combined, it will drive the teams to align on a shared view of prioritisation based on shared goals and awareness of the organisation’s current state.

Another challenge comes from the common misconception that digital transformation is an IT topic and only the IT function should bear ownership of the initiative. This understanding is never true. As mentioned before, a successful transformation needs to be business value led, and both IT and businesses are responsible for the inputs and outcomes. Apart from building awareness through communications and workshops, an increasingly popular solution in the industries is setting up cross-value stream scrum teams to implement transformation initiatives. This structure encourages collaboration and shared responsibilities by having team members from across the business and IT functions.

The last common obstacle in digital transformation occurs before the initiative has begun. We have seen companies rushing for transformation before defining a clear business case. A business case is not only crucial for identifying the financial implications and ROI (return on investment) of an initiative, but the formulation process of the case will also help a transformation team clarify the prioritisation of resources, achieve better alignment with the organisation’s strategy, and help drive stakeholder engagement.

With the increasing focus on data privacy and cybersecurity, how do you help organisations strike a balance between leveraging technology for innovation and ensuring data security?

We help organisations achieve balance by supporting our clients throughout the transformation journey. First, we begin with a comprehensive review of the potential red flags and advise our client on suitable mitigation measures to minimise the risk exposure. Followed by continuous support during the implementation stage to help the client to set up appropriate governance and test procedures to ensure the innovative technology will not compromise data privacy and cybersecurity. It is a common perception that innovation and security often come in each other’s way. Still, we have seen many cases where organisations successfully navigated challenges through careful planning and execution. We do not believe technology innovation and data privacy and security are two sides of a coin. They are both assets to a company and are valued by customers equally. Only those who can handle both aspects well will excel in the digital era and achieve successful outcomes.

Could you share some insights on the evolving role of technology consulting in driving business growth and transformation in today's digital landscape?

Compared to decades ago, we are taking a much more complicated and multi-disciplinary role as a technology consultant. Back then, technologies were seen as mere tools. Most companies would only focus on adopting a certain technology to help their businesses, and our roles were to deliver the tool to the client. Whereas in today’s setting, adopting new technology often means a change in business model, and changes in people, processes, and organisation always come with it. Therefore, our skillsets as consultants are no longer specialised purely in the IT domain, as we need to be able to help our clients navigate through the various areas of the business. Such change is best represented in how we build up our team of consultants, as we now look at multi-disciplinary talents rather than IT experts alone.

How do you see the future of technology consulting evolving, particularly in terms of the challenges and opportunities that emerging technologies present?

One point that we are almost certain of is that technology will only evolve faster and faster. Hence, we must be agile and consistently stay at the forefront of technological advancement. The other aspect we are also focusing on is continuously pursuing the essential business acumen and various skill sets that allow us to help our clients adapt to change. As new technologies become more accessible and “down to earth”, the impact on a company is much more widespread and felt across the organisation. For example, we are implementing more and more “low/no-code” solutions for our clients where anyone in the company can take part in the configuration and application of the technology. As a result, our role is shifting from mere “implementation consultant” to an “enablement consultant”, as clients now expect support not only on implementing the technology itself but also that help influence its people and culture to adapt to the new norm.

As a judge at the HKB Technology Excellence Awards, what are the qualities and criteria you look for in nominees? How do you evaluate the impact and effectiveness of their technology initiatives?

As mentioned, one of the keys to successful digital transformation is alignment with business value and the ability to address business strategy. Therefore, my criteria for nominees would build upon these qualities. Assessing how the nominees have addressed their business values through their innovation and how it has helped transform how the business is run is one of the key definitions of transformation, which is creating new ways of doing things compared to merely enhancing the efficiency of an existing practice. On top of that, the level of innovation and breakthroughs achieved and the sustainability of the technology initiatives. The former is the shared aspiration and standard of all innovation-embracing organisations, and the latter is crucial in ensuring long-term business success.