Digital transformation. More important than ever? Probably, and we’ll go on to explain why throughout the course of this article. With the world in crisis, it’s never been more critical to stay one step ahead of the curve and your competitors, and digital transformation can aid that process.
However, you can’t achieve that without a solid strategy, buy-in, and culture change. First, though, let’s look at the why of digital transformation.
Why Does Digital Transformation Matter?
Although a broad term, digital transformation is defined as a comprehensive plan for using digital tools and solutions to improve aspects of your business. Creating a roadmap for digital transformation is critical, along with having the buy-in from key business stakeholders.
Why it matters is another topic.
As the world accelerates into the future with the likes of the Metaverse leading the charge, digital transformation has never been more important to the success and indeed survival of modern brands.
Digital transformation can improve efficiency, accelerate growth, reduce costs, and put you ahead of the competition in general. The thing, though, is that digital transformation is about staying afloat. We saw during the Covid-19 pandemic that businesses struggled to adapt to global issues, as they just weren’t prepared enough. Digital transformation can change that.
However, brands and businesses are often left behind or lack the foresight to embrace digital transformation.
According to Wipro Digital, only 50% of companies are successfully executing their digital transformation strategies -– despite concerted efforts and investments. Developing an effective strategy is critical, and it seems that many aren’t getting it right (although not through lack of trying).
Before we get into the strategy, though, let’s look at the why of digital transformation and the problems it can solve.
Digital Transformation: A Journey
As the word ‘transformation’ suggests, digital transformation is a journey, not a one-stop solution that can be achieved overnight or in the space of a sprint. Instead, it involves culture changes, investment, strategy, planning, and buy-in from stakeholders at an executive level.
To back that up, the Harvard Business School asked executives to rate the progress of their companies’ digital transformation projects. Those that had been working on it for five years or longer reported the most progress, as you would expect.
So, it’s clear to see that the process of digital transformation is a long-term strategy that requires a detailed roadmap. It might seem like an investment that you could do without right now, especially with a looming recession and war on our doorstep. But it’s absolutely fundamental to the success and survival of your business if you want to be able to adapt and cope with flexes and bends in the markets.
Digital Transformation: A Troubleshooter
As we’ve already discussed, digital transformation can change how you do business and enhance brand growth. But there’s more to it than that, including enhancing community engagement, market adaptability, and improving decision making.
Community Engagement
Today, it is easier than ever for consumers to browse and purchase products or services online. The increase of use in social media and online communities has meant that audiences are expecting more from the brands they choose to shop with.
The increase in expectation has, despite what logic suggests, actually negatively impacted some businesses as they struggle to keep up with demand and expectations.
Digital transformation in the form of intelligent self-service options means that brands and businesses can meet needs and wants more effectively.
Intelligent self-serve could be chatbots, CRM plug-ins for call handlers, or even self-service checkouts.
Most digital transformation tools are designed with the consumer in mind, which allows businesses to make the most of their intended purpose. By embracing digital transformation, brands can engage with consumers and create a community, which is a critical part of brand growth.
Growth Enhancement
Enabling growth is one of the key advantages of digital transformation, especially in marketplaces dominated by a few select organisations. Where big brands dominate but the marketplace has stalled, digital transformation can lead the way.
Some digital solutions offer greater data intelligence, while others provide an enhanced customer experience. Customer experience is one of the single most significant drivers of growth, and using digital tools to achieve this can set you apart in the market. In terms of data intelligence, having more accurate insights and a greater understanding of the data at your disposal can only lead to better decision-making.
Market Adaptability
As we’ve seen over the past three years, the market in all industries has been ever-changing and hard to pin down. Despite the most robust strategies and roadmaps, no one can ever really be sure what is about to happen or how it will affect business.
Even in a good year, competitors introduce new products and services, world events shape consumer spending habits, and new businesses will inevitably fall and rise.
So the ability to adapt and flex with the market has never been more important, which is where digital transformation comes in.
New technologies, better processes, and smoother operations all contribute to coping with change and remaining agile. Digital transformation is particularly useful for accelerating change within a business and helping a brand stay alive and aligned with the market trends.
Improved Decision Making
Even with the best leadership teams, decision-making can be a challenge – especially when there are many stakeholders. Plus, even with automated systems, the big decisions often need to be made by key positions.
Repetitive or even simple decisions can be the wrong ones made by humans without the right data in front of them, but digital transformation can change that.
This is because digital transformation offers a higher level of data intelligence and can provide the necessary data for key stakeholders to make the right decisions.
That’s not to say that stakeholders can or should be replaced by AI platforms, just that digital transformation can provide the data that will inform decision-making.
Digital Transformation Strategy
Any change in business starts with strategy, and digital transformation is no different. But, as we’ve covered, you can’t achieve the shift in the space of a sprint, so you’ll have to be prepared to put building blocks in place to prepare for change. Let’s take a look at some of the fundamentals of your strategy.
Set Attainable Goals
As with all strategies, the first thing to set out is the targets you wish to achieve with your digital transformation strategy. However, they need to be attainable. While the end result might be wholesale changes or a new way of working, you’ll only reach that point by ticking off key goals throughout the journey. An attainable goal should be short-term, clearly defined, and easily measurable.
Figure Out the Why
Before diving into the digital transformation, it’s crucial to understand why you want to go through this period of change. So many leadership teams start with the technology and are eager to get the ball rolling.
Whilst that’s admirable, many leaders don’t consider exactly why they want to do it. As mentioned above, you need to identify business needs and goals before you can build your strategy. That means understanding why you want to transform in the first place.
This also means creating a business case for your digital transformation, setting out the value to the business. To do this, you’ll need to get all the key stakeholders involved and on board – including executive-level leadership.
Getting the leadership team on board is crucial for the next step: setting the culture to prepare for change.
Set Your Culture
Setting a course for change starts at the top of any business, which means that culture change has to start there too. With digital transformation being such a significant change for any organisation, it’s crucial that the culture shifts with the transformation and that the company are on board.
It’s natural for there to be resistance to change, especially technological change, so having key members of teams right the way through the spine of your organisation changing mindsets is critical.
Think of these people as flagbearers for the change you are about to go through, helping to be a positive force.
The culture you create should reflect the change you are about to make, and it’s important to note that the change might not be as successful if your culture is poor or stuck in the past. Focus on setting examples for the company at the C-suite level and passing the baton down through the company.
Align Technology With Operations and Processes
As we’ve already seen, digital transformation is just as much about strategy as it is about technology, which is why your process and operations have to be nailed down before you can even think about implementing new technologies.
Think about how you will use your technology, how it will affect your business, and who will use it before implementing it. The processes are just as, if not more, important as the technology. The processes and operations are the springboards to leveraging technology for success.
Test, Measure and Iterate
With strategic, attainable goals, a business case, a solid strategy, and revised processes, you should now be in a place where you are ready to test, measure and iterate. This involves going back to the goals you set and aligning KPIs to ensure that when you do test, you know what success looks like.
You should also ensure that everyone knows what their role is and how accountable they are. Further, feedback is essential at every stage, so every level of your organisation is aware of how the process is going and what needs to be done to improve it. As the digital transformation strategy is rolled out, your KPIs or goals may change. This isn’t a problem; just make sure it’s communicated clearly.
Scale
At this stage, you should be starting to see the fruits of your labour, whether they meet your goals or not. By that, we mean you’ll know by now if it’s working or not - in which case, the tweaking should have taken place, and you’ll be ready to scale.
This means ramping up your efforts, including rolling out changes across the board and not just in one area. Your digital transformation likely won’t be the same as the next company’s journey; that’s why it’s critical that you create your own roadmap and strategy.
Don’t forget, however, that you should still be testing and iterating as you scale.
It’s Not A Straight Line
Digital transformation will take you places, but it won’t be all plain sailing. It’s not a linear process, which is why the planning and strategy stages are so critical to minimising the disruption.
However, with the right leadership in place and a culture prepared for change, you can navigate the disruption with minimal upset. This is a process that could take years, not weeks. Prepare for that, and you’ll be in a far better position.
Final Thoughts
Digital transformation isn’t a one size fits all approach, and there has to be a focus on the strategy and process before you can get the technology involved. You should be focusing on the needs of your company, identified when you worked out the “why” of your goals.
There’s no sense in automating something that doesn’t work, which is why it’s critical that you take the preliminary steps we’ve laid out today. Don’t forget that data is king in all that you do, so when you come to test and iterate, make changes according to the information you’ve collected. If that’s by AI, then even better.
Digital transformation isn’t something that will ever be finished, either. As technology advances, so too will the systems you have in your workplace. If you sit still, your competitors will overtake you, and you’ll struggle to stay relevant. And remember, don’t do anything without a purpose attached to it.