Digital transformation is all about modifying and improving current business process by using technologies. Just like everything in the world, it also has two sides. Most businesses jump on the digital transformation bandwagon by looking at the positive side and ignore the dark side. As a result, they come across challenges that they stop their progress towards digital transformation.
That is why 70% of digital transformation fail. Yes, it might depend on how you define success or failure but still that is still a high percentage. Lack of digital transformation strategy and process are two of the main reason behind high failure rate. Despite this, most enterprise decision makers are planning to digitally transform their business within couple of years.
If you want to digitally transform your business successfully, you will have to create a digital transformation strategy and process first. That is exactly what we are going to help you with in this article.
In this article, you will learn about a step by step process of creating a successful digital transformation strategy.
1. Tell your Story
Start off by setting your goals. What do you want to achieve with digital transformation? How can digital transformation benefit your company? Answering these questions will lay a solid foundation to build upon. Craft a compelling story that your employee can relate to by adding elements of a daily work routine. Make sure that the story stays true to reality and highlights both the advantages and challenges. This will help employees visualize digital transformation in its true essence.
2. Align Your Strategy with Business Goals
Once you have set your digital transformation goals. It is time to align them with your business goals. Your digital transformation strategy must link your business goals with your digital transformation goals.
Bernie Gracy, Chief Digital Officer at Agero suggests that,
“CEOs and board need to communicate that the move to digital is the right strategy. They should outline the right outcomes and mitigate the risk of substitutional effect as former processes are replaced by newer ones.”
According to him,
“Alignment is the most important step of digital transformation. Digital transformation should cut across every function and every budget and all functional teams should be on the same page/ because digital transformation cannot be driven only by IT.”
Without true partnerships, your digital transformation efforts won’t succeed.
3. Identify the Skills Needed
Evaluate the resources you already have and resources you might need to digitally transform your business. Start from your team. Do you have the number of human resources you need? What skillset do they possess, and which skills do they lack? Answering all these questions will help you develop a better understanding of your team’s capabilities. If you don’t have the required skills, you might have to outsource it. For instance, you might need a person to manage your best dedicated servers or you don’t have an analyst that can help you read between the lines.
4. Run Pilot Tests
If you want to achieve digital transformation success, you will need the buy in from all the stakeholders. This is easier said than done. For this, you might have to run pilot projects or proof of concepts that shows your stakeholder that you are worth their attention. Consider your digital transformation efforts as a web design projects where you show your clients prototypes and mockups, take their feedback and refine the final output.
This can be a big challenge especially if you are deploying a new technology because you don’t know how things will work. Set milestones to ensure a transparent process. Once your stakeholder see the whole journey before actually going through the process, they will surely show their interest in digital transformation.
5. Experiment, Experiment, Experiment
Most companies do digital transformation the wrong way. They tend to chase digital products and services that does not deliver business value. That is why it is important to set parameters that let you test your hypotheses, gain actionable insights and adapt accordingly. Keep experimenting until you find a product or service that delivers business value you are looking for.
Here are three best practices that you need to adopt if you follow this process:
- Connect innovation with your long-term vision
- Make it easy for your employees to experiment
- Share the responsibility among all stakeholders
You might not find the right product straight away. In fact, you might fail multiple times but eventually you will choose a digital product that is worth your time and effort.
6. Master the Art of Managing Risks
Yes, digital transformation and disruptive business models will challenge the status quo. You will be moving fast and developing and scaling new technologies and business processes. This might increase your risk drastically. That is why it is important to manage those risks efficiently otherwise; your digital transformation efforts won’t bear any fruit. That is why it is critical to have risk management controls in place to minimize the risk associated with digital transformation. If you succeed in managing the risks your chances of achieving digital transformation increases manifolds.
7. Get Ready for Culture Change
According to Michael Wade, innovation and strategy professor at IMD,
“Digital transformation success is achieved with orchestration of organizational capabilities in the services of a clear transformation vision. This also include balancing radical transformational goals with incremental transformation objectives”
If there is one thing that you need to focus on the most, it should be cultural aspect of transformation and changes it brings to your company culture. Without taking culture changes into account, your digital transformation will fail just like other companies. Ask yourself questions like, Do you have the right organizational culture to sustain change? Can you tolerate failure and accept risks? If yes, then you are on the right track to implement digital transformation in your company.
Which steps do you take to create a digital transformation strategy? Share your step by step process with us in the comments section below.