Digital Transformation Strategy

As businesses face an uncertain future, having a successful digital transformation strategy has become more important than ever. Although digital transformation has been a buzzword for several years, the global COVID-19 pandemic has accelerated the pace of change exponentially. In fact,eight out of 10 organizations fast-tracked digital transformation programs in 2020. But what is digital transformation and how will it affect your business?

What is digital transformation?

In an overt sense, digital transformation is likely to affect every aspect of a business. From processes and customer experience to products and your internal culture, its effects are far-reaching. Digital transformation is not simply about introducing new technologies or more efficient business processes. For a digital transformation strategy to be successful it needs to infiltrate each layer of your organization.

Naturally, some sectors have been quicker to embrace digital transformation. The retail sector, for example, has rapidly adopted digital technologies as it tries to overcome the challenges of the changing consumer mindset and the increasing pressure from online mega-retailers. We've seen brick-and-mortar retailers introduce digital screens where customers can interact with products in much the same way they do online, while others are streamlining the checkout process with payment kiosks dotted throughout the store. For the retail sector, digital transformation is about survival.

And for the most part, digital transformation is borne out of the need to become more efficient, be more competitive, expand into new markets or new audiences, improve the customer experience, and latterly, to respond to the challenges of a global pandemic. Whether it's about survival, innovating or fulfilling potential there are several digital transformation steps.

Why do digital transformation projects fail?

Unfortunately, for many businesses embarking on widespread digital transformation the process will ultimately fail. According to a McKinsey report,70% of digital transformation programs fail to achieve their objectives.

So why do so many digital transformation projects fail?Here are 10 reasons:

1. The culture change is simply too much
2. Leadership does not get behind the project
3. Too many organizational silos and competing priorities
4. Failure to fully understand the required technology and skills
5. Indecision and failure to act quickly
6. Too much focus on technology
7. Expectations are unrealistic and too wide
8. Lack of momentum and speed
9. A gap in necessary skills
10. Senior management turnover can disrupt projects

The sobering figure from McKinsey should not deter organizations from embarking on digital transformation projects. Yes, large-scale digitization projects can be challenging but the effects on a business are, well, transformational.

What are the advantages of a successful digital transformation?

For those businesses who come out on the other side of a successful digital transformation strategy, the benefits are significant and long-lasting. From reducing costs to enhancing the customer experience, the application of digital technologies and the transformation of business processes can truly make a mark.

• Cost savings
• Increased operational efficiencies
• Actionable customer insights through advanced analytics
• Improved customer experience
• Increased ability to acquire and retain customers
• Enhanced competitive advantage
• Increased flexibility and future-proofing
• Better operational transparency, less silos

Where to start: Key digital transformation steps

The goal of a successful digital transformation project is to find the balance between acting quickly while at the same time not rushing into making decisions that could set your project back before it's even begun. Taking the digital transformation processes step by step is vital if you're to meet your goals. Here arefive key steps to kick start your digital transformation strategy.

1. Understand the why: Your digital transformation project will need a purpose. Adopting digital technologies or processes for the sake of it is a fast-track to failure. So, begin your digital transformation strategy with a vision. What are you hoping to achieve? By mapping out a digital transformation roadmap you are cementing your plans and making sure everyone in your organization understands the plan and how you are going to achieve it.

1. Identify the processes you want to make more efficient: Digital transformation needs to filter all the way through your organization, right down to the daily workflows of your employees. Digitization of all processes may not be necessary to focus on the inefficient processes and investigate how they can be made more user-friendly, efficient, or enhance the customer experience.

1. Lead digital transformation from the top down: Wide-scale digital transformation needs to be an all-in process. Every leader and senior manager from the C-suite down to middle managers needs to be on board. They need to actively enact and encourage digital transformation across their departments and teams.

1. Choose the right technology solutions: Once you understand your goals it's vital that you invest in the right solutions to help you achieve them. This is where it's important to conduct research and due diligence. Take the time to investigate the options available to you. You may find that you have a solid foundation in place that you can layer technology or it may become apparent that you need to invest in a completely new platform.

1. Communicate digital transformation plans with employees: The success of your digital transformation strategy does not rest on the technology or systems you implement. Your employees, those who will be using these new systems and processes, can make or break your digital transformation plans. That's whyit's so important to be transparent and informative from the beginning: explain why you are introducing new systems and what are the benefits. Consider involving your employees at an early stage to get their feedback on how certain processes could be improved. And make sure all employees are fully informed and trained upon each new system.

If successful, digital transformation can have a wide-ranging and positive effect on a business. It can dramatically enhance efficiencies, drive revenue, establish a competitive advantage, and improve employee retention and engagement. But digital transformation is not for the faint-hearted and will require an organization-wide approach, including leadership buy-in and active support to ensure its success.