10 Key Elements of Successful Digital Transformation
Digital transformations can be even more difficult to achieve than the traditional kind but there are certain keys that lead to success. Companies that do achieve success point to several keys they use to improve their chances. For example, the organizations more likely to succeed use technologies, such as AI and the Internet of Things. However, this is only part of the equation. Digital transformation is multi-faceted and here are 10 key elements of successful digital transformation that can make it more successful.
1. Start with strategic objectives
Organizations face many critical decisions when they embark on digital transformation. For example, they need to decide whether to transform their existing business models or build new ones. Tying transformation to business objectives, such as improving customer satisfaction or improving employee productivity, usually results in more success. An Operational Data Store (ODS) can drive digital transformation because it integrates data from various systems into a central database. This enables real-time operational reporting and enables tactical decision-making.
2. Be wide in scope but don’t lose focus
Technology is driving value in organizations in various ways today, from automation and improved decision-making to production innovation and enhanced connectivity. With the many different systems in place, transformation tends to be more successful when it is enterprise-wide in scale. The whole organization needs to work towards a common goal instead of different departments trying to transform on their own.
However, transformation usually has to come in phases and keeping focus means having strict organizational priorities in place. It is vital to understand current systems and exactly what needs to happen to transform them.
3. Have the right digital-savvy leaders in place
Having leaders who are familiar with digital technology and a commitment to change is essential. When companies have the right people in key roles, such as a Chief Digital Officer (CDO), they not only have the necessary knowledge but can devote all their attention to the effort to transform. They will be committed to transformation because they understand how important it is and will know where to start, what the priorities should be and how to measure success.
4. Build capabilities for the workforce of the future
It is often necessary to redefine the roles and responsibilities of individuals within the company. Having the right mix of skilled employees to work across the whole transformation cycle is a must. Cybersecurity, data analytics, software development and change management are just some of the crucial skills. Leaders need to encourage employees to challenge their old ways of working as well as provide continuous competency development training so employees are able to perform their roles successfully in a digital workplace.
5. Find the right technologies
Organizations may think that replacing their existing systems with expensive alternatives is the way to go. However, this may not always bring the improvements they expect. Within the e-Commerce landscape, for instance, organizations need to embrace modern architecture that brings more flexibility and integration. They need to centralize their customer and product data to offer a better customer experience and achieve consistency in messaging across all channels.
6. Think about the customer journey
Consumer habits have evolved rapidly, enabled by new technology such as mobile messaging, emails, video chats and social media. Customers look for convenience, simplicity and instant responses. As a result, all points of interaction with them need to evolve. Management of data is one of the key aspects of elevating the customer experience. An ODS provides consistent and integrated data about customers so employees are able to access a full customer profile instead of having to find information in various different systems.
7. Prioritize adaptability
As the landscape in which organizations operate keeps evolving, they need to design a digital framework that takes this into account. Prioritizing agility means that companies are able to accommodate evolving technologies and an ever-changing market. An agile approach means that they can keep taking steps towards their goals while at the same managing unpredictability and complexity. Adaptability means being able to identify future disruptions and easily pivot to leverage them and gain a competitive advantage.
8. Communicate frequently
Employees may feel threatened by digital transformation and they need to understand why it is happening and remain engaged throughout the process. Leaders need to communicate to help them understand what, how and why implementation is necessary. They need to be clear about who is responsible for which part of the transformation so that there’s accountability at every level. Responsibility often shifts between different groups as transformation proceeds and hand-offs have to be properly defined. Communicating clearly and frequently can prevent dropped balls and duplication.
9. Find the right partners
Due to the scale and complexity of digital transformation, organizations will often engage with partners. Partners can help to supply knowledge that may be missing. However, they need to seek out partners with a clear understanding of their strengths and pain points for such collaboration to be successful. There are certain agencies that specialize in digital transformation and an external digital transformation partner may help to guide an organization throughout the process.
10. Manage the budget
Organizations do not have an endless pool of resources. Funding for digital transformation initiatives and the key elements of successful digital transformation needs to be based on performance. They should be able to meet their targets to continue receiving funding. When they do not meet targets, organizations need to stop funding them and quickly move on. The budget is a reality check and it may be necessary to develop a transformation plan that involves phases over several years so as not to put the organization at risk.
A final word
Organizations often find themselves wondering where or how to get started when it comes to digital transformation. Many of them waste time and money because they do not take the above mentioned key elements of successful digital transformation into account. A successful transformation demands more than just supporting processes with technology. It demands a shift in the mindset of leaders and in the most successful efforts, leadership and accountability are crystal clear throughout the process.