Digital Transformation: The Executive’s Guide
In this guide, we’ll walk you through a pragmatic digital transformation strategy that will show you precisely what you should do to succeed. Any organization with the right leadership mindset and capabilities can successfully innovate, digitize, and transform.
Twenty years ago, Evan I. Schwartz passed a prescient warning, “Companies that are unwilling or unable to adapt to the digital world will fall under what is known as Digital Darwinism.”—the phenomenon when technology and society evolve faster than an organization can adapt.
It’s obvious that many didn’t believe him—for if they did earlier, we wouldn’t be having only 44% of companies ready for Digital Transformation.
Schwartz’s prediction has never been more accurate than it is today. Evidently, organizations that are not embracing digital transformation are losing the competition. In fact, to quote the European Commission, “Businesses that fail to get digitally connected will become excluded from the global market.”
What is the Role of the Executive
As you drive your digital goals forward, it’s essential to take a pause and define what digital transformation means for you and your organization. What role are you going to play? And have your employees fully grasped their roles as well?
As a savvy executive, you should play a leading role in the creation of your organization’s digital strategy. You should make three key contributions:
- Take an active role in the planning and nurturing of the digital strategy, directing it to the greater aspect of the company’s mission.
- Support the need to invest extensively in order to achieve a real transformation.
- Establish metrics to measure performance and stay engaged during the entire project lifecycle.
There are mainly three executives in digital transformation—those who think it’s simply a new way to engage with customers, those who believe that it’s all about technology and those who believe its a totally new way of doing business. While all three are correct, such diverse perspectives can be misleading. They lack detail and are often followed by piecemeal initiatives that lead to lost opportunities and work-shy performance or false starts.
To keep up with today’s highly demanding customers, you should shift from a commerce environment that is always learning and improving to one that provides a consistent multi-touch journey.
Create your own digital transformation definition
While every company on the planet is rushing headlong to become more digital, it’s only those who have successfully defined what digital transformation means specifically for their organization who will succeed. It can be tempting to settle for simple definitions; however, you need to come up with your own relevant and pragmatic approach. You should understand that DX is not just a trend; it’s a new way of doing things.
Why is Digital Transformation vital for your organization?
So far, the outcomes for organizations leveraging digital transformation have been encouraging. As your organization embarks on this digital race, you can expect:
A boost in efficiency and flexibility
Before the advent of digital tools, organizations could not closely evaluate all production processes, intensively analyze each step and identify shortcomings, incongruities, and challenges accurately. With DT, it’s the complete opposite. Cutting-edge technologies can seamlessly integrate with your systems and data to streamline the entire work process, increase proficiency, and help you make informed decisions.
Increased transparency and better decision-making
Digital transformation has broken a lot of privacy barriers, allowing close contact between businesses and their customers. With the advent of social media, big data analytics, IoT, enterprises have access to vast amounts of data and information that can be effectively leveraged to make better decisions and deliver better customer experiences.
Improved customer satisfaction
Millennial customers expect to have what they want, exactly when and where they want it. DX allows you to focus on your customer’s needs, improve communication, and enhance the customer experience. You can also take advantage of new sales’ channels, such as e-commerce or social media. Did you know that the simple act of creating a website allows your organization to be on the market 24/7?
New market-possibilities and better market penetration
Digital transformation breaks all boundaries and blurs the lines between different industries. With an excellent digital communication strategy and the right logistics in place, you can easily reach and penetrate new markets.
Unless you are a non-profit, one of your primary goals is to boost your profit margins. Digitization will not only open new business models and revenue sources, but it will also lower your organization’s operating costs.
How to get started? What you should get right from the start
Getting started with Digital transformation is the hardest part. It can feel like waking up in winter—sure, you know you have to show up for work, however, the sun hasn’t come up yet, and your bed is so warm.
Besides, you don’t even know where to start—it neither has a clear starting point or finishing line. Don’t worry. The actionable tips below will help you get started and set you up for success.
Step 1. Engage the whole organization and get their full support
Transformation is not just for the IT department. To truly transform, you need the cooperation of the entire organization. There are so many myths and misconceptions around digital transformation—and most employees think of technology as an enemy. They believe that digital transformation is up to taking over their jobs.
You have to explain what transformation means, specifically for your organization—the good it will bring to the whole organization and your employees. You must get everyone on the same page.
Step 2. Define your business objectives and create a strategy.
Now that you have everyone on the same wavelength, it’s time to delve into what is known as the discovery phase. At this stage, you have the full support of both your stakeholders and end-users; therefore, you can start to interview them and discover where the pain points in the organization are.
By taking this pragmatic approach, you would be able to create a feasible strategy, one that holds the interests of everyone involved. It’s also imperative to keep close communication with everyone—not just digital leaders. Make it a habit to have up to date meetings with your stakeholders as often as possible. This will help you understand what they need to reach the target, and they also get to know what they are expected to do. You will also be able to optimize your roadmap accordingly.
Step 3. Analyze market
This is probably one of the most crucial steps in creating a relevant and up-to-date digital strategy. Due to the rapid technology development and industry changes, today’s market is highly volatile. Profound market analysis will allow you to gain insight into different market dynamics and help you make informed and insightful decisions. Furthermore, as the boundaries between industries are continuously blurring, it’s wise to go beyond your industry and explore success stories in other landscapes as well.
Step 4. Make sure you have all the needed resources and talent in place.
When talking about resources, people tend to only think about technology. Apart from the process and tech, digital transformation needs a human component to succeed. This doesn’t necessarily mean that you have to hire a lot of stuff. You simply have to get a mix of the right talent, data scientists, mobile developers, etc.
Did you know that IBM relocated its offices to New York City simply to access the tech talent needed in the same place as the business talent?
Step 5. Start with the low hanging fruit
At this stage, you have full organizational support, all the needed resources, and a digital transformation strategy on the table. Everything went well; however, you want to make sure that no one pulls out. To ensure this, begin to quickly execute on projects that require low cost and effort but yield high rewards. It’s also beneficial to pick on projects that are associated with metrics. This helps to prove that digital transformation is easy to implement and surely helps reduce the stakeholders’ day to day problems.
Every large company has three kinds of people, those who don’t want change, those who want it, and those who are on the fence. Early success helps to shut down every, “Well, this is going nowhere,” or “I told you so.” Fence-sitters will likely join you earlier own if they see that you are making progress.
Step 6. Cut bigger projects into smaller chunks
You have built momentum with small wins. Now you have to maintain it. You can do this by executing in an agile manner, cut big projects into small and easy to implement slices. One of the secrets to digital transformation success is to show results as soon as possible. While the final outcome of digital transformation might take years, it’s important to celebrate small victories so that everyone stays captivated.
Step 7. Maintain a digital transformation culture
You cannot visibly see or touch a company culture; however, it’s present in the actions, behaviors, and approaches of all the members of your organization. It affects your hiring process, how employees work, how they resolve differences of opinions, navigate change—the list goes on.
The people you hire can change the company culture if the executives support that change. As the new hires begin to change the culture, it becomes easier to attract other employees who want to participate in that change. Even the fence-sitters will start to move in the digital direction and embrace the cultural changes.
5 Critical Drivers For Digital Transformation Success
Success in digital transformation hinges on many factors. While you don’t necessarily need to address all these factors, there are a few non-negotiable key drivers you should implement to guarantee your success.
Below are some of the key focus areas you should target in your organization’s digital transformation strategy:
#1. Cloud migration
If you are wondering, “Are cloud technologies really the silver bullet they are heralded to be?” The short answer is yes. Migrating to the cloud plays a significant role in digital transformation; it reduces costs, improves performance, and ensures the resilience and availability of your applications, among many other benefits. In fact, cloud migration is considered a major vehicle of digital transformation.
#2. Customer experience
One of the keys to digital transformation success is a customer experience-centric approach. Your business, including your services and projects, should be built with your customers in mind.
One of the secrets to making your customers happy is by making your employees happy. Allowing employee mobility can significantly boost their productivity.
#3. Data analytics solutions
According to the Harvard business review, Data scientists are the sexiest job of the 21st century. You might not necessarily need a Data scientist in your organization but you surely need a data analytics solution to uncover subtle patterns in your customers’ behavior. This will help you insightfully adjust your services and products to meet customer’s needs better.
#4. Digital marketing
When it comes to marketing, going digital has had tremendous benefits. Properties of digital media such as social media, SEO, online advertising, and more accurate metrics combined with interactivity, have created a whole new level of marketing opportunities. Refining your digital channels will also help you to gain deeper insights, inform your approach, and improve the customer journey.
#5. Resources & Revenue
These two are non-negotiable when it comes to digital transformation. You can’t do without them; however, they are not magic wands. The key is to apply resources where they are needed. If implemented well, the increased automation and efficiency will save your business a significant amount of money in the end. Studies have shown that digitizing processes that are full of information can cut costs by up to 90%.
3 Digital transformation hurdles every organization knows
Digital transformation comes with tremendous benefits, but it also has its share of challenges and risks. Here are the top three:
#1. Resistance to change
The most apparent challenge you will experience at first is resistance to change and employee pushback. Every company has homeostasis that resists change: managers whose power and responsibility will shift, and employees who are scared to lose their jobs.
#2. Increase in security threats
As much as digital technologies are helping businesses to become more efficient, they also increase organizations’ vulnerability to cyber-attacks. Today, a lot of organizations store their sensitive data in the cloud.
#3. Budget constraints
To truly digitally transform, you’ll need resources, new equipment, employees, and in some cases a complete overhaul of organizational structure. This can come at a hefty price.
To ensure longevity, development and real commercial success in your digital transformation strategy, you should keep up with emerging trends, tap into the mind of the consumer, understand new markets and utilize the talent and technology available. It’s time to admit that the future of digital transformation is no longer a dot on the horizon. It’s already here! You either embrace and invest in digital transformation to thrive or succumb to digital Darwinism. Keep in mind that digital transformation is all about revolutionizing industries—therefore, you shouldn’t be afraid to think outside the box and try something new!
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