6 Key Steps in Your Digital Transformation Strategy

Creating a digital transformation strategy isn’t optional for enterprises anymore; It’s required. Indeed, with the proliferation of SaaS apps, from collaboration to document management to online marketing tools and more, digital transformation is something you’re probably experiencing.

And the reasons for that are clear. Digital transformation (DT) creates new possibilities and ways of working for enterprises. It transforms your enterprise into an agile, nimble organisation your customers love to do business with. Companies have seen significant improvements in their product and service offerings, and have seen increased operational efficiencies.

Despite the promises, however, rushing into a digital transformation without an adequately formulated plan is a recipe for disaster. Often, organisations mistake digital transformation for technological innovation and fail to understand the human and process change elements required.

Clear targets and management buy-in are just some of the requirements for a successful digital transformation strategy. Embracing new technologies and habits is the way to succeed.

First, we’ll define what a digital transformation strategy is, and then we’ll outline six key pillars that will ensure the success of your digital transformation.

What is a Digital Transformation Strategy?

There’s a common misconception among business leaders that digital transformation is only about technology. The problem with this approach is that it doesn’t consider the human and economic factors that drive business transformation. So it’s more of a case of digital business transformation than digital transformation.

“Whatever approach you choose, you need to create appropriate levels of digital technology synergy, brand integration, investment coordination, skill development, vendor management, and innovation over the long term.” – George Westerman, MIT Sloan

In fact, a digital transformation strategy is a detailed plan for how an organisation intends to reposition itself in an increasingly digitised economy. Customers and stakeholders are changing the way they work and shop, and business models need to adapt.

The challenge with digital transformation is it means different things to different people, even within the same organisation. Some people may think of digital as going paperless. Others may think of it as data analytics. Yet others may think it’s about moving to the cloud.

For this very reason, it’s vital to be crystal clear what digital actually means to your organisation. It’s equally essential that all stakeholders be clear about what that means.

An excellent place to start is your company’s five and 10-year goals. This forces you to draw a compelling business case for investing in a business transformation plan. It also invites the C-suite into the conversation right from the beginning. They’ll be instrumental in driving the cultural change digital transformation requires.

When considering the huge operational and cost benefits of digital technologies, such as Artificial Intelligence (AI) or Internet of Things (IoT), there’s a tendency to jump right in without a proper assessment of the organisation’s strategic requirements. Rolling out new technologies without assessing or tracking their impact across the organisation could turn your project into a costly disaster.

Start by analysing your own needs from a cultural and business perspective. Set your objectives and document the risks. Run frequent tests with the new technologies, ask for feedback from stakeholders, and monitor their effectiveness.

Step One: Start With Your Company Culture

Your digital transformation strategy starts with your company culture. After all, it’s your employees, stakeholders and customers that will ultimately determine the success of your digital transformation project.

Your company culture is made up of people (shared values), attributes (products and services) and characteristics (geography etc…). These elements determine how well new technology is embraced and used. Artificial Intelligence, for example, may be received differently in some types of organisations than others. As mentioned, the C-suite has a critical role to play in driving enthusiasm for digital transformation.

Resistance to change is normal. It’s only natural human behaviour. Beyond the C-Suite, every department needs to be on board. Transparency and communication are key. Employees need to understand why changes are happening within the company and what’s expected of them. This ensures everyone is working towards the same goals.

Step Two: Set Clear Goals

“To the person who does not know where he wants to go, there is no favourable wind.” – Seneca

Digital transformation is a journey, not an event. It’s essential to identify key milestones and targets to aim for, low hanging fruit so to speak. The first digital transformation project is crucial in proving the concept and building up momentum. Key stakeholders should be kept updated on progress through newsletters and other internal communication channels. This may seem like stating the obvious, but the Harvard Business Review reports that 70% of all digital transformation initiatives do not reach their goals.

Step Three: Build Internal Skills

Companies traditionally hire people around specific skills. Often, this means there will be gaps in their digital skill sets. They’ll therefore need to gain these additional skill sets as the digital transformation strategy unfolds.

Agile working, for example, models itself on agile software development. It emphasises speed and autonomy, working in short bursts (sprints) of 2-3 weeks, with frequent reassessment and adaptation. 

A digital unit independent of the organisation can champion new working methods, such as agile product development. This can speed up the digital transformation strategy without jeopardising existing processes.

Step Four: Find Technology Partners

Technology and implementation go hand in hand. However revolutionary the technology, if your team lacks the experience in applying it, it’s just an expensive new way of doing old things. Strengthen your competencies with partners who have experience in your industry and a track record in applying the technology. 

Some of the questions you may have are:

  • Does this vendor share my vision for digital transformation?
  • Is the technology scalable?
  • Will the technology work across the business, not just one department?
  • Will the new technology integrate with my existing technology?

Step Five: Roll Out the Technology

If you’ve carefully laid out your digital transformation strategy, the next step is implementation. You should now have a vision, broad support, and a roadmap to follow. You should have completed your pilots and should now be confident about rolling out the technology. Technologies you could be implementing as part of your digital transformation include:

  • Artificial Intelligence (AI) and Machine Learning (ML)
  • Augmented Reality (AR)
  • Cloud
  • Internet of Things (IoT) 

In the event you choose to limit the roll out to a single department or business unit, avoid the tendency to treat the project as a pilot. You should now be fully committed to your digital transformation strategy and embrace the new technology.

Step Six: Monitor and Scale

By definition, digital transformation implies openness to change and feedback. Be ready to change your approach as customer and stakeholder needs evolve. It’s too easy to assume everyone is satisfied with the new technology, so it’s essential to keep monitoring.

Often, this reveals changes to be made and further work to be done. For example, you may have rolled out AI technology to support the sales process. You then realise after feedback you could also extend this technology to your support team. Data analytics will help you track and measure your progress, allowing you to adjust your course as your rollout progresses.

As you begin to see results from your digital transformation efforts, build on them to formulate a long-term strategy. As your transformation roadmap evolves, new ways will emerge to improve connections between people, products, and processes. Use opportunities to scale horizontally by applying the same approach to other business units, or vertically by applying complementary technologies.

Conclusion

A digital transformation strategy is a long-term plan that seeks to deliver long-term business value by improving the connections between people, products, and processes.

Correct planning is critical, or enterprises risk expensive failures. It’s essential to separate the business goals from the technology. Technology simply enables business goals. A transformation project affects more than technology and involves company culture, customers and stakeholders as well.

With a solid digital transformation strategy in place, your enterprise has a far greater chance of success.