Digital transformation has been on the collective mind of the business community for years now, but many enterprises either still aren’t fully invested in the journey or they’ve experienced their fair share of false starts. It can feel overwhelming, unpredictable, and exceedingly expensive. If your business is falling behind on this front, rest assured that you’re not alone. According to TechRepublic, a survey found that almost 80% of companies are on the digital transformation journey, but 90% of those businesses are facing serious obstacles.
However, don’t give up hope and fall into the trap of complacency when it comes to digital transformation. Nearly 70% of respondents agreed that businesses that have gone through this process are the only ones that will survive over the next five years. We would agree with that assessment and encourage enterprises to strategically start (or continue) down the digital transformation path. Keep reading for a few tips.
1) Setting Goals, Prioritizing & Preparing
Digital transformation is an umbrella term, and it doesn’t necessarily look the same at every company. So, how do you decide how it applies to your business in a practical sense? First of all, look at opportunities to improve your customer journeys, improve your internal operations, and/or even change your business model. Each company has a different set of customers and challenges and understanding your individual and market challenges & opportunities for improvement will provide insight into your specific transformation roadmaps. You can draw inspiration from your industry and competitors, but look for your own unique opportunities. General digital transformation technology and process drivers such as cloud, analytics, IoT, and DevOps will affect most companies, but the level of impact and priority will vary.
Next, when it comes to building a strategy around digital transformation, deciding what to prioritize is vital. Prioritization efforts should balance these three goals:
- The achievement of business outcomes
- The ability to scale
- The potential to produce value quickly and iteratively
Digital transformation initiatives often stall if business leaders don’t understand the outcome or if the finish line is too far into the future. In these cases, a heavy focus on large-scale technology change can be the culprit. Setting big goals and optimizing technology are both important, but we recommend establishing much smaller milestones that quickly achieve business objectives to build and maintain momentum. Therefore, to prioritize effectively, you need to understand business drivers and divide technology initiatives into attainable slices that result in real business value.
Another critical piece of the puzzle for the beginning stages of a digital transformation journey is preparing the internal team for the changes to come. Implementing new technology is difficult enough, but rallying employees to embrace the new tech carries its own challenges. However, this change management function plays a critical role in achieving the full value of transformation. To be successful, it’s important to get a broad range of employees involved in the strategy and execution process, explain why the change is necessary, and demonstrate value quickly.
2) Iteratively Build Your Digital Foundation
A strong digital foundation is about more than technology. You must understand and rebuild your business model, people and organization, processes based on the new technical capabilities.
Building the underlying technical capabilities, your digital foundation, is the baseline for transformation. Due to the speed of technology change, optimizing your digital foundation is a continuous process. Start by understanding what is:
- Preventing the team from supporting business goals
- Causing ongoing stability or performance issues
- Reducing your time to market
Taking a look at performance and time to market hindrances will help you identify current deficiencies, and then you can align with current and future goals to create a roadmap. Next, build your digital foundation iteratively as you primarily focus on delivering business value or resolving current issues. It’s important to have a thoughtful future vision for your digital foundational technology and ensure that each delivery either improves or is aligned to that core technology. On the flip side, you will also want to have a process in place to continuously enhance the team’s vision and remain flexible enough to prioritize outcomes over standards.
Additionally, maintain architecture and technology standards to limit technology “sprawl”. Companies often try to optimize every technology decision individually for a specific need, but forget about the marginal complexity and cost in terms of people and skills required for each new technology the organization owns. Always compare the marginal benefit of adding a new technology against the marginal cost and complexity of adding something new. Keeping your technology stack as homogenous and simple as possible to meet your business needs will support speed to market.
3) Tracking Success
The success of your digital transformation journey will be severely hindered if you can’t adequately track and report real business progress, not just predefined scope, timeline, and budget. As with the campaign’s priorities, success should be tied to business value metrics, not the introduction of new technology. Ultimately, digital transformation should drive a goal such as customer acquisition, increased revenue, or noticeable cost savings, but these metrics may be hard to align to a specific initiative. It’s easier to build a goal around a hypothesis.
For example, a retailer might decide to increase revenue by boosting the proportion of website visitors that make a purchase through machine learning-based product recommendations and simplifying the checkout process. In that case, initial success should be defined as a measured increase in purchase rate on the website, not the deployment of a simplified checkout process. Deploying new technology or features shouldn’t be celebrated unless it can be tied to a measurable business goal. Ultimately, the rise in revenue should be used to validate success.
If you’re ready to undergo a digital transformation but don’t know where to start, download our latest white paper, “A C-Suite Guide to Embracing Digital Transformation,” for a framework to success.
At Maven Wave, innovation-driven digital transformation lies at the core of what we do. Our Management Consulting team helps Fortune 500 companies tackle digital transformation every day with solutions that are agile, rooted in analytics, and built in the cloud. Reach out to Maven Wave to learn how to simplify your digital transformation process.
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