Digital Transformation Strategy

 A digital transformation strategy is a plan of action for introducing, analyzing, and driving a digital transformation initiative forward. Your strategy will define what business goals you aim to achieve through digital transformation.

An effective digital transformation strategy will create a framework for you to follow throughout this ever-evolving process. But before you begin, it’s important to know what you hope to achieve so you can designate KPIs to track along the way.

For example, if you are migrating users from Salesforce Classic to Lightning, your high-level metrics for measuring adoption would be log-in rates, usage, data quality, and business performance.

In this case, you might drill down further and monitor metrics such as:

• Monthly sales volumes
• Opportunities created
• Sales productivity (e.g., time saved, volume of sales activity per rep)
• User log-in rates
• Prospect account with key fields populated

 

A well-thought-out strategy will also address how the transformation will affect your customers and your employees. Start internally by designating change leaders who will publicly support your transformation. Putting trusted change leaders in charge of announcing and supporting the transformation will help generate momentum. Regularly soliciting feedback from anyone affected by the change will also help keep the momentum going.

Don’t forget to include your team’s accomplishments as part of your progress tracking. Whether you’re pointing out a quantitative achievement, e.g., a 10% increase in user log-in rates, or qualitative, e.g., Beth created a Slack group to answer questions about the transformation – celebrating milestones throughout the process is important.

Customers and employees alike will turn to the people initiating the transformation to gain the knowledge they need to be successful. It’s up to you to provide the necessary tools.

Those tools may come in many forms, but if you’re making a digital transformation, chances are, there are digital resources that could support your transition. Will you use e-learning tools for training? Could videos allow users to learn at their own pace? Keep in mind that transformations are an evolution, so leveraging tools that can adapt quickly, like digital adoption platforms, could save you time and effort down the line.

The Different Stages of Digital Transformation

After several years of interviews with digital transformation leaders, Altimer released a report that defined six stages of digital transformation. Together, the six stages provide a guide for purposeful, results-driven transformation initiatives.

The 6 Stages of Digital Transformation

1. Business as usual, status quo — The current state of your organization
2. Present and active — A time of experimentation throughout the organization when you encourage creativity and improved digital literacy skills
3. Formalized — When experimentation becomes more intentional, initiatives become clearer, and you start looking for leadership buy-in
4. Strategic — The point when groups start collaborating and sharing their research in order to create strategic plans for the transformation
5. Converged — The formulation of a dedicated digital transformation team that will guide the strategy, establish goals, and put systems in place to support the transformation
6. Innovative and adaptive — When digital transformation becomes a part of the business and leadership establishes a system for monitoring technology and market trends so that the company can continue to evolve.

Drive the Digital Transformation

 To successfully transform, keep the momentum of any initiative moving toward your ultimate business goals. To do so, continually address the main drivers of digital transformation: digital twin, privacy, culture, augmented intelligence, and digital product management.

 

 

According to Gartner, CIOs need to focus on these five areas to enable successful digital transformations in their organizations.

• Digital Twin

Gartner defines digital twin as “a digital representation of a real-world entity or system. The implementation of a digital twin is an encapsulated software object or model that mirrors a unique physical object, process, organization, person or other abstraction.”

Digital twins support digital transformation because they facilitate experimentation and collect data that supports more informed business decisions.

• Privacy

If you can’t manage privacy, your digital transformation is destined to fail. As more digital solutions become available, organizations tend to jump on trends that offer more convenience. However, Gartner’s research reveals that a large portion of consumers and employees are not willing to give up safety and security just for convenience.

CIOs need to take privacy seriously. Employees and consumers won’t support a transformation if they feel it violates their privacy or personal data security.

• Culture

Resistance to change is a human instinct. When you ignore the cultural aspect of a digital transformation, you’ll start hitting walls of resistance fairly quickly. In fact, 46% of CIOs say culture is their the biggest barrier.

Addressing culture ensures you get internal buy-in for your transformation initiative. When you have change leaders — vocal supporters of your digital transformation — you can use their voices to drive your initiative forward.

• Augmented Intelligence

Augmented intelligence goes beyond artificial intelligence (AI), allowing humans and machines to work in tandem.

AI’s data collection and analysis capabilities far surpass that of a human worker. But augmented intelligence isn’t about replacing employees with machines — AI collects and presents data in a way that allows people to augment their knowledge.

• Digital Product Management

Gartner explains digital product management as the shifting of mindsets from projects to products. Those products must be designed to improve the customer experience and be delivered through digital channels.

Digital product management is about knowing your industry and designing products that serve it. For example, instead of expecting the healthcare industry to align with Apple’s offerings, Apple created a watch that monitors the health of the wearer.

CIOs who focus on these five key drivers can stay ahead of their competition by constantly improving and growing their businesses.

Importance of Digital Transformation

 While every digital transformation initiative will have its own specific goals, the main purpose of any digital transformation is to improve your current processes. Digital transformation is important because companies must evolve to remain competitive in their industry. If you aren’t evolving, you’re falling behind.

A Bain & Company study shows that “only 8% of global companies have been able to achieve their targeted business outcomes from their investments in digital technology.” One of the strategies that sets leaders apart is that they spend more on transforming their businesses instead of just running them.

Digital transformation is important because it allows organizations to adapt to ever-changing industries and continually improve how they operate. 

 

The Benefits of Digital Transformation

While the ROI of digital transformation depends on a variety of factors, the right technology can greatly improve how your business functions and how customers engage with it.

• Increases productivity while reducing labor costs

Using technology to work more efficiently is one of the most impactful ways to transform your business. For example, for enterprises, the time and money they spend training new employees and updating digital resources can quickly get out of hand. With the proper tools, you can keep costs down and productivity up.

• Improves the customer experience

Tech-savvy customers want a great experience through multiple touchpoints — mobile apps, social media, email, live chat, etc. Digital transformations are the driving force behind improved customer experiences.

• Makes You More Competitive in Your Industry

Your competitors are looking into digital transformation regardless of whether or not you are. Choosing not to embrace digital transformation is essentially deciding that you don’t mind being left behind.

The Different Types of Digital Transformation

• Customer Experience — working to understand customers in more detail, using technology to fuel customer growth, and creating more customer touchpoints.

• Operational Processes — improving internal processes by leveraging digitization and automation, enabling employees with digital tools, and collecting data to monitor performance and make more strategic business decisions.

• Business Models — transforming the business by augmenting physical offerings with digital tools and services, introducing digital products, and using technology to provide global shared services.