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Digital Transformation: 5 Tips for Success
The concept of digital transformation has become so mainstream that it’s morphed into a catch-all phrase, confusing at best, meaningless at worst. Although the phrase has a different value for each company, we can define digital transformation as:
A radical rethinking of how the organization wishes to use technology, processes, and people to evolve its business performance.
Digital transformation (DX) isn’t easy: it doesn’t come out of the box, there’s no one-size-fits-all roadmap. This all-encompassing evolution, typically led by the CEO, must be accepted by the entire organization, requiring cross-departmental collaboration and shifts in current business philosophies. This type of drastic change doesn’t occur overnight.
With a wide variety of steps companies can take to initiate—and complicate—this process, a few strategies from mature organizations have been utilized to ensure it is successful. Let’s take a look at 5 tips on digital transformation, from those who’ve already succeeded.
1. Obtain employee buy-in at all levels
Digital transformation requires change at all levels of an organization, especially from tech-savvy leaders and key decision-makers. In fact, research from McKinsey & Company suggests that companies who engaged a chief digital officer (CDO) to support their transformations were 1.6 times more likely than others to report a successful digital transformation.
When people in leadership roles, both general senior-level positions as well as those specific to the digital transformation, are involved in the planning and execution, the transformation is also more likely to succeed.
(Learn about CTOs, CIOs, and the emerging Chief Transformation Officer role.)
Achieving buy-in from executives is only part of the process, however. We all know that a dictate from higher-ups doesn’t guarantee change across the whole company. That’s why it is critical that all employees are on board.
The most successful DX initiatives result in a complete culture shift in the company environment, and that’s because all employees feel part of the change. How to get employees on board with change?
- Understand how change works. Use change theory and clear communication to your advantage.
- Redefine & realign individuals’ roles and responsibilities with the goals of your DX. This helps clarify the skills and roles the transformed organization needs. It also helps ensure employees are included in the process from the very beginning.
2. Inventory your current technology stack
Once leaders and decision-makers are on board, the next step for successful digital transformation is to take a full inventory of your organization’s tech stack, including:
- Technical competencies
- Potential gaps
By noting the tools and processes you currently use, you will better understand how to streamline and make functions more efficient. Look at all areas of the business, including:
- Product development
- Sales and marketing
- Customer relationship management
- Internal collaboration
- Employee experience and support
For a lot of companies, digital transformations begin from a need to re-platform. Whether the current systems are simply becoming obsolete and need replacing, or they aren’t as beneficial as they once were for employees and users alike, you’ll likely realize that changing your technologies can completely alter the business.
Digital initiatives aren’t just about the customer’s journey, however, it is important to also think about how different technologies can support employees, as well. Does data flow smoothly between teams and departments? Is information highly accessible? Inefficiencies in the employee digital experience will:
- Negatively affect the workplace culture.
- Likely have an impact on the customer experience.
3. Create a digital roadmap & vision
Digital transformation isn’t simply about adopting new technologies and calling it a day. In that case, you haven’t transformed much.
Rather, DX is a holistic endeavor that requires:
- An explicit vision for how you’ll leverage new digital tools
- A detailed plan (roadmap) to execute across the organization
Creating this vision and plan means going through the following activities:
Know where you stand today
You can talk about change and evolution all you want. But if you don’t know the current state of your company today, you won’t know if your DX efforts are actually succeeding. Having a baseline, or benchmark, for your current state is essential.
The ADE Index is a benchmarking tool that can highlight your current strengths and weaknesses, particularly around DX. Short for Autonomous Digital Enterprise, an ADE is a customer-centric, agile, and data-driven organization that minimizes manual effort to capitalize on human creativity, skills, and intellect. An ADE continuously examines its customer and partner relationships to create new value intelligently.
Take the test to see how you compare to other organizations on the ADE Index. Knowing how your organization fares today helps you establish and plan for your short- and long-term goals more effectively.
Assess organizational goals
The entire digital transformation agenda must be well-thought-out. Check all the boxes before starting anything and make sure you consider:
- Market research
- Overall brand strategy
- Projected ROI
- Baseline metrics
- Performance expectations
- IT budget
- Resource and technology requirements
- Operational costs
- Expected outcomes
- Organizational impact
Analyze integration needs
Going back to the concept of digital maturity, it is necessary to examine where your company lies on the spectrum in order to fully plan out your strategy. By considering short-term (one year), mid-term (three to five years), and long-term (10-20 years) goals, your transformation committee can ensure that the overall vision makes sense with your digital strategy.
Among the first step of any successful digital transformation is getting that employee’s buy-in. But do not stop communicating there! Buy-in isn’t a one-and-done, but something you have to continually earn.
Harness the channels where your employees already meet up and talk. Share progress and information with your employees, especially in areas like:
- Vision and goals
- The benchmarking process
- Any challenges or celebrations along the way
4. Optimize operations
Streamlining operations is always a good idea, but even more so when creating a digital transformation strategy. One of the best places to start is by truly understanding and assessing your team’s abilities and strengths. Should they need outside support, this would be a good stage to obtain it.
The next step would be to set clear planning methods and explicit procedures, reducing the time spent on misunderstandings and improving overall workflows. By executing projects with standardized plans, your team will be more efficient and ultimately more creative, spending increased time on innovations and less on roadblocks. Continue to share these plans with stakeholders, including all industry compliance and regulatory best practices.
5. Routinely evaluate & adjust
No matter how good a digital transformation strategy may be, there is always room to grow. As a company and industry needs evolve, these changes will be even more crucial, so having consistent and ongoing evaluations is essential to long-term success.
Collecting data is beneficial, but only if you take action as a result:
- Use metrics that are geared specifically to your digital transformation.
- Share these updates regularly with both specific teams and the company at large.
A business that remains transparent and applies dedicated resources to collecting and analyzing data is more likely to experience positive outcomes.
Digital transformation tips for success
Preparing your organization for digital transformation can be daunting. Implementing these tips within a DX framework, and utilizing the strengths of your best people, you are doing everything you can for a successful transformation.