IDC reports that 85% of enterprise decision-makers believe they only have two years to make significant progress in digital transformation before they fall behind competitors and suffer financial consequences. For reference, 56% of CEOs report revenue growth after implementing digital improvements, according to Gartner. That business value and ROI can’t be overlooked.
For successful execution, businesses need a clear digital transformation agenda and strategy in place to reap its benefits and gain a competitive advantage in today’s digital economy. Building a digital transformation strategy seems more complex than it actually is. This blog will break down the practices and considerations business leaders should follow in order to transform and achieve the digital disruption that will help them survive.
Digital Transformation Strategies & Frameworks
Leaders must approach digital innovation with a strategic mindset . As the average lifespan of S&P 500 companies has fallen to just 18 years, business transformation and digital disruption are more important than ever before. However, research shows that many businesses proceed blindly into this journey. Forrester reportsthat only 27% of businesses have a digital transformation strategy in place when launching their digital initiatives.
Essentially, only three out of every 10 businesses approach their digital transformation efforts with an actionable plan to follow. Is it any wonder then that less than half of organizations surveyed expect to realize sustainable value from digital transformation? The squandering of business opportunity here is staggering, but the good news for businesses just starting out on their digital journey is that they’re primed for actual success. All they need to do is carve out a strategic roadmap before implementing their digital technologies and initiatives.
A digital transformation strategy or framework will help a business in any industry estimate the budget for their initiatives, anticipate any possible risk, and ultimately facilitate their desired outcomes and goals. By following these five steps, business leaders can lay the foundation and structure for a digital transformation strategy that will produce real change and success.
Step 1: Establish Your Strategic Direction and Vision
Before constructing a digital transformation strategy, leadership should meet to establish the strategic direction and vision for this initiative. Start by identifying the problems and bottlenecks you wish to solve for, and which of your business processes ladders to each. Then, solidify your objectives and outcomes.
Be sure to think long-term and really focus on the experience you want to create for your brand, customers, and employees. If you’re a small or midsize business, you might want to concentrate your efforts more locally. Large-scale enterprises should definitely think more globally. Lastly, identifying the gaps in business models where digital transformation can help you achieve a competitive advantage will inspire new business opportunities. Ensure your business possesses the capabilities to realistically fill those gaps and meet your endgame.
Step 2: Define Your Customer Journey Map
Digital transformation must facilitate an improved customer experience for any business. To start, develop a customer journey map as part of your digital transformation strategy. This will ensure that the experience your customers receive—both existing and prospective—remains top of mind. Think about how implementing digital technologies can create newer, more exciting avenues of engagement for customers. Be mindful of any potential gaps to bridge that could lead to a more seamless experience.
You should be meeting your customers where they’re interacting with your brand, and offering all the avenues of communication they’re using to engage with you. That could be everything from social media to chatbots to contact centers to advanced digital voice assistants. Innovation is the key to success here because customers crave unique, personalized experiences. Bottom line: every digital transformation strategy should be customer-centric.
Step 3: Get Your Company Culture on Board
Becoming a digital business means embodying the tenants of digital transformation both inside and out. In order for a company to digitalize, the leaders and company culture they foster for employees must as well. Half of all companies surveyed point to company culture as the biggest factor that contributed to their successful execution of digital transformation, while 46% of CIOs report that culture change is their biggest roadblock to success. Significant culture changes must occur in order for your digital technologies and initiatives to prove effective.
The culture and ecosystem of a company must feed into and bolster digital transformation efforts, otherwise they simply won’t stick. For starters, employees must be open to change and understand the reasons for changing. Once they’re onboard, leadership can work on fostering a more collaborative, open environment that welcomes a collective braintrust of ideas. A company culture that embraces change, encourages participation, and gets employees excited and passionate about digital transformation is more primed for success.
Step 4: Prioritize Digital Initiatives and Technology Investments
Next, you’ll need to prioritize the initiatives that make up your digital transformation strategy and the technology you’ll invest in to achieve them. These technologies and solutions can range from things like artificial intelligence, machine learning, and robotic process automation. Each piece of technology should be assigned to revamp, optimize, or automate a business process to encite transformation.
Attention should be paid to both short and long-term initiatives, with digital technologies and solutions applied to each. You should always be able to connect every initiative and tool back to a business function or outcome, where the end goal is advancing your digital transformation objectives and improving all touchpoints that make up both your business processes and customer experience. Whether the technology or initiative benefits your customers, employees, or your business itself, there should be a clearly defined roadmap that strategically moves you from planning to execution all the way to outcome.
Step 5: Build Your Execution Team
Last but not least, you’ll need a clear plan for how you’ll execute your digital transformation strategy and who all will be responsible for it. Only 40% of companies report having a dedicated digital transformation team, indicating a clear lack of preparation for the majority of businesses. Establishing effective leadership at the top is essential. This could be anything from an expert CIO or CDO to a team of qualified, outside specialists that you employ for their digital transformation services. Expertise and organization at the top will ultimately trickle down to the individual stakeholders and employees you’ve assigned to manage and oversee each digital initiative.
You also need to ensure that there’s constant reskilling and training in order to effectively implement future change. Remember, digital transformation isn’t a one-and-done thing; it’s a constantly evolving process. By weaving the tenants of digital transformation into the very fabric of your business, you’ll foster a digital culture that’s always focusing on and working toward digital innovation.
The only way to drive measurable results through digital transformation is with a well thought out strategy in place. By following the five steps above, you can build a digital transformation strategy that increases business efficiency, improves your customer experience, and helps your company scale to greater heights.