5 Steps for Developing a Digital Transformation Strategy

While Digital Transformation is primarily driven by rapidly-changing technologies, its successful adoption depends on having a sound strategy. Businesses that have successfully embraced Digital Transformation…

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January 25, 20187 minutes read

While Digital Transformation is primarily driven by rapidly-changing technologies, its successful adoption depends on having a sound strategy. Businesses that have successfully embraced Digital Transformation do not simply adopt individual technologies to solve their individual problems. They often have a defined strategy and clear objectives for digitalization in place that aim to guide the transformation of their overall business, instead of ad hoc functions.

According to a study by Deloitte and MIT Sloan Management Review, “maturing digital businesses are focused on integrating digital technologies, such as social, mobile, analytics and cloud, in the service of transforming how their businesses work.” On the other hand, “Less-mature digital businesses are focused on solving discrete business problems with individual digital technologies.”

Simply put, the true benefits of Digital Transformation do not lie in the strength of individual technologies; rather, they are dependent on how these technologies are integrated to bring out the most in each technology and transform entire businesses.

In this post, we will explore how enterprises can develop a Digital Transformation strategy in order to reap its benefits.

Step #1: Define the overall transformation objective

There are two mistakes enterprises often make when adopting new technologies. First, they adopt whatever technology is developed by its innovation or IT department or discovered by other departments. This may include new applications that competitors and other players in the industry have adopted. Second, they start with their capabilities or their ecosystem and simply start improving — without having goals in mind or specific problems they want to solve. These mistakes can lead to isolated and siloed adoption of technologies which are difficult to integrate and scale throughout the entire organization.

Instead, enterprises should start by defining what they want to accomplish through Digital Transformation. This can include defining what a successful transformation means for their overall business and for their customers, especially in terms of customer engagement and experience. By establishing the objective, enterprises can adopt technologies with a clear focus on improving the overall business, instead of individual processes. Not only does this help in developing a comprehensive strategy that involves and transforms the entire organization, but it also avoids the siloed adoption of technologies. According to a report by Aberdeen, 43% of organizations focused on Digital Transformation lack the expertise needed to integrate siloed applications. This can be avoided by starting with the objective in mind.

As the most important step in developing a Digital Transformation strategy, defining the overall objective aligns and drives transformation at every level of the organization, even reaching the customers, enabling the enterprise to create a lasting competitive advantage. Furthermore, it provides a reference point for assessing and determining specific actions to take and initiatives to act upon in the transformation process.

Step #2: Design the experience

After defining the objectives, enterprises must design the desired experience for their customers and employees. Digital Transformation prioritizes and values user experiences as much as it adds and introduces new functions and capabilities. Instead of focusing on the requirements of new solutions and the limitations of existing technologies, enterprises must focus on the experiences they want to provide their end users.

In this step, the overall transformation objectives are laid out into more detailed goals. These goals can include how an employee’s work can be made simpler and easier through new software, applications, or functionalities or how a customer can have better access to a company’s catalog and also a better shopping experience through a web or mobile app. Another example is how employees can better collaborate, engage, and interact with each other and with customers through new digital platforms and technologies. Again, the focus is not on the new technology or application but on the experience it will provide.

The objective of this step is to determine and create the desired experience, which should be seamless, intuitive, but most of all, consistent. This experience should be one that enables users to achieve their goals — whether in doing their work or in purchasing products.

Step #3: Assess existing technologies

While the first two steps outline where enterprises want to be and what they want to achieve through Digital Transformation, the third step gives them a view of where they currently are. This gives enterprises an idea of where they are starting in their journey and the gaps that they need to fill in order to be digital enterprises. This step enables the Digital Transformation strategy to stay grounded and makes it actionable.

This step includes taking stock of the enterprise’s existing software, applications, and technologies. The enterprise must determine, based on the objectives they established and the design they created, which of these specific technologies need be retained, upgraded, automated, or retired.

It helps to match the technologies with the outcomes they deliver or the problems they solve. This can help prioritize the technologies that will be updated in the Digital Transformation and align them with the objectives and the desired experience. It can also help determine the integration solutions the enterprise needs to bring together siloed and disparate applications. Finally, it can help the enterprise determine the technologies and functionalities they need to meet their Digital Transformation objectives.

Step #4: Review and select solutions and vendors

The next step in the Digital Transformation strategy is assessing and selecting possible solutions to meet the established objectives, provide the desired experience, and fill in the gaps of existing technologies.
This step requires the enterprise to perform a careful and thorough review of possible solutions and offerings from different vendors. Aside from the capabilities and functionalities of the solutions they offer, the vendor should have a proven track record and should be easy to work with. The vendor should also be able to provide the necessary after-sales support in a timely manner, as problems may arise after the development and implementation of the chosen solution.

A comparison chart of solutions and vendors can provide enterprises with an objective tool for making an informed choice.

Step #5: Create a timeline for implementation

The final step assembles the overall business objectives, desired experiences, existing technologies, and possible solutions together and unifies them into an actionable plan. A Digital Transformation initiative takes time and resources, both human and financial. That is why it is often done in stages. It is critical to carefully plan when each action — such as a technology assessment or a vendor meeting — should be taken to ensure that human and capital resources are available. A timeline will help enterprises ensure the seamless implementation of the Digital Transformation initiative.

An implementation timeline will also give the affected stakeholders, from top-level executives to rank-and-file employees and customers, a much-needed heads-up to generate support for the Digital Transformation initiative and minimize disruptions in business operations. A Digital Transformation project, like any other enterprise project, requires continuous support from every part of the organization to ensure its success.

Finally, an implementation timeline provides the enterprise with a benchmark it can use to compare actual results with planned results. It also aids the project proponent in managing and governing the project.

Using the five simple steps outlined above, enterprises can develop a strategy for the seamless transformation of their business.

Embrace Digital Transformation

In today’s hyper-competitive business environment, embracing digital transformation is a requirement rather than a luxury. Digital transformation enables organizations to open up new sales channels, find new markets and opportunities, increase their revenues, and improve their efficiency. But to fully embrace digital transformation, enterprises must start with capturing, integrating, and utilizing quality data. With a steady supply of quality data, the enterprise can fully embrace and reap the benefits of digital transformation.

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