Little did we know at the outset of 2020 that the COVID-19 virus would soon spread and create a global pandemic. With this came unparalleled challenges and far-reaching implications for mankind as well as nearly every business and industry sector. In response, companies of all sizes began assessing ways to pivot quickly with changing market demands, consumer habits, and the ever-increasing digitization of business processes and product and service delivery.
Digital transformation strategies are at the forefront of most of these initiatives, yet according to Forrester’s 2018 Digital Transformation report, only 22% of businesses that undertake digital transformation achieve the desired value and business results. Fortunately, with the right upfront planning and knowledge, it is possible to develop and implement a successful strategy, reap the expected benefits, and help safeguard an organization’s digital future.
Developing a digital transformation strategy
We are living in a time earmarked by increasingly rapid changes in how products and services are designed and delivered to market, coupled with quickly evolving consumer and client expectations, and user experience needs. Simultaneously, the convergence of big data, artificial intelligence, cloud computing, process automation, machine learning, supply chain automation, and other technological advances is occurring.
With this, companies need to be both proactive and reactive, evaluating elements such as digital tools, business and operational processes, and their digital talent pool to adapt in today’s marketplace. All of this and more drives changes in business models and digital transformation.
Our guide below on how to achieve digital transformation provides insights and information to help organizations develop and execute successful digital transformation initiatives at a crucial time to achieve optimal business success.
What is digital transformation (DT)?
At initial glance, DT may appear to focus primarily on adopting new digital technologies, but it’s far more than “an IT project.” It reaches beyond integrating advanced technologies, adopting innovative software solutions, digital twins, and tech stacks to build and run applications and processes. Digital transformation can touch every aspect of a business, from how it operates and delivers customer value to retraining an existing core team and the acquisition and integration of new talent.
A full understanding of organization-wide implications can enhance the success of a digital transformation initiative and thereby improve overall business value. The broad-reaching impact across an organization may include changes in the business model, target markets, the business’s processes, management, and operations, as well as business strategy, and customer engagement. It can even impact the company culture and organizational structure.
Although DT may sound like a major undertaking, developing a digital strategy does not need to be daunting. A thorough analysis and carefully planned digital transformation roadmap—which may include phases over a period of time—can deliver significant rewards and keep a business viable and strong in both the short-term and the long-term.
How to transform your business
Companies around the globe are at various stages of business transformation that includes DT. Some are ahead of the curve. Their challenge is to stay on top of a never-ending digital evolution as well as disruptive technologies. Without real-time vigilance, it is easy to fall behind.
Businesses just starting to digitize and streamline, or that are early in the process, are likely to feel a growing pressure to adopt overnight. The challenge here is to design a digital transformation strategy that does not overwhelm the organization and its resources. The goal is to design an implementation strategy that does not cause too much disruption or impose changes too quickly within the organization. It should also provide adequate time to train and educate employees, address skillset gaps, and onboard required new digital talent.
Below are some of the main factors to consider before launching a digital transformation process that will ultimately lead to improved business outcomes.
1. Define your company’s culture
Culture is key to a successful digital transformation. According to a BCG study of 40 digital transformations, companies that included a focus on culture were five times more likely to achieve success than those that didn’t.
Although there is no one “right” company culture for all organizations, DT usually involves adding or expanding elements of “digital culture.” Digital culture is typically signified as being devoid of work silos, with open communication and an engaged, efficiency-minded team empowered to think creatively and critically, to innovate, and to communicate and collaborate.
So, begin a digital transformation initiative with an honest and fundamental look at a company’s culture that includes how management interfaces with one another and the organization’s existing employees. Identify employees who will buy in and advocate digital transformation, and be most willing to adopt changes in company culture. Also identify those who are most likely to resist. Developing a plan to turn resistance into acceptance is crucial to success. Lastly, consider how products or services are designed and delivered, customer interfaces, and identify how changes would impact company culture.
2. Determine how employees will contribute
Employees are the lifeblood of almost every business. Adopting technology without considering the human element is folly. A well-developed change management strategy will prepare, equip, and support individuals to successfully adopt organizational change and new technologies. Once the business culture has been defined and DT evangelists identified, it should be made clear where each employee and team fit into the greater picture.
Change often brings fear of the unknown and concern about one’s place in an organization. To avoid causing panic within the ranks, determine what their ownership will be and how DT will benefit them. Develop ways to help them feel empowered and part of the mission versus being on the outside.
3. Identify new talent needs
Chances are, digital transformation will require workers with different skills and the know-how to support a transition. A focus on the work and skills to drive a digital transformation initiative is as imperative as identifying ways to leverage a current workforce and integrate and develop existing talent.
Digital talent—workers with the skills needed to support the digital transformation of an organization—may be required temporarily to support and enhance a core team during the DT process. Determine upfront how and where to find and add resources to an organization so skills can be quickly scaled up or down as required. One successful way to accomplish this is by using an on-demand talent platform provider to add high-quality independent talent with relevant, in-demand skills.
Also define ongoing talent requirements, such as system and interface monitoring and reporting, and more.
4. Evaluate customers, competitors, marketplace trends, and business goals
Revisit current market trends, market sizing, and competitor analysis. Today’s fast-paced environment may have changed since an annual market analysis and strategic plan were created. The current pandemic is a good example. Many companies finalize their sales and marketing plan, operating plan, annual strategic plan, and budget in the third or fourth quarter before the new year begins. Think of how many of the assumptions made in 2019 changed almost overnight in 2020 due to COVID-19.
The goal is to create digital transformation based on current and future needs using up-to-date data aligned with business objectives. Then identify current gaps, inefficiencies, and how a digital transformation can be phased in to best meet the needs of the organization and its clients. Look at how interactions with customers occur today and could or should occur, and the touchpoints along the purchase funnel that could be more effective through digitization.
Also, consider the scope of digital disruption in served markets and verticals as well as potential new ones. Determine how it will change the customer experience, what hurdles may exist, and what tools may not be appropriate. For example, services for consumers who are not comfortable with technological advances may not be ready to accept an automated customer interface. But this doesn’t mean an internal, non-customer facing digital transformation isn’t required to streamline processes and bring products and services to market more quickly and efficiently.
5. Run tests and trials
Instead of a major system cutover that can disrupt an organization and its customers, establish a digital platform that supports tests, pilots and trials, and results analysis. This is also a great way to leverage your core digital team and DT evangelists, and enhance their knowledge and skills before a complete transformation. Lastly, it is virtually impossible to anticipate every scenario or problem before executing a digital transformation strategy. Tests, pilots, and trials will uncover the unexpected.
6. Slow and steady wins the race
One of the reasons DTs fail is the inability to scale digital innovations beyond the early pilot and testing phases. This can be due to technology shortcomings where the capabilities that support a trial are not sufficient for scaling. But it may also be caused when a fast-paced roll out overwhelms the workforce.
As transformation commences, employees may be subject to greater workloads and higher stress levels. Instead of massive overhauls, consider managing risk with a slower, multi-phase rollout. This not only allows for an effective adoption and understanding of the nuances of a new workflow, it can identify gaps in processes and operations needed to properly track changes. It also enhances the ability of an organization to revector and/or add resources as needed.
7. Educate
Digital transformation comes with exciting new tools and processes. Some are small, some extensive. Incorporate adequate time for team training into a DT project management timeline. Determine upfront what online training platforms are available that make learning easier and more accessible.
Also, keep in mind new organizational roles and processes and how employees will align. Employees will need to understand these as well, and how they will interface with other departments and team members. Each team and employee should know what they are expected to learn, and a clear track for each should be identified and conveyed as these ladder up to the bigger picture.
8. Expect to stumble
Demanding complete perfection is a set up for failure. There will likely be stumbles along the path to digital transformation, but a well-thought-out strategy and carefully managed implementation should minimize them and reduce their impact. View stumbles as a stepping stone to success, and most of all, be prepared to handle them swiftly and efficiently with an open mind.
9. Continue to test, innovate, and learn
Everything is constantly evolving. Change is everywhere, from technology and markets to customer needs. Embrace it and adopt a philosophy of continual learning. Stay flexible and develop an atmosphere that fosters creativity. Continually challenge the status quo in a productive, positive fashion, experiment, seek feedback, and stay open to new ideas.
At the same time, don’t get caught up in the newness of something or succumb to chasing market hype. If current technologies are working just fine, let it be. This also helps create a stable environment for employees where they can flourish and focus on productivity. The ability to continually learn, re-evaluate, and innovate can take a company from surviving to thriving.
