Digital transformation is rethinking how an organization uses technology and understanding the shift in customer behaviours. It’s also a foundational change that requires cross-departmental collaboration in connecting transformation to meaningful business objectives.

When organizations are considering how a digital transformation strategy could develop new capabilities and business models, there’s a tendency to rush into it without first understanding what digital means to them. What can you do to build bridges between the old operating models and new business models? Here are key steps to consider as you embark on a digital transformation journey.

1. Create a Vision

Before you embark on your transformation project, you should set quantifiable objectives and clarify your organization’s vision. The main digital transformation goals are optimizing processes, creating connected teams, solving complex problems, and executing new ideas that create business value. What a digital transformation vision should look like will differ by company, but businesses need to identify it as the ultimate objective of any operational improvement.

2. Ask Your Customers

Unfortunately, many digital practitioners and technology professionals don’t realize that substantial digital improvements don’t necessarily start with an IT department team. Putting customer experience improvement at the centre of the digital transformation strategy is key to success. Customer experience starts with employee satisfaction. If a company has happy employees, this will lead to value for customers and therefore, nurture customer satisfaction. And providing a great customer experience leads to customer loyalty, maximized efficiency and positive word of mouth. After all, employees and customers are looking for the same things: speed, convenience, consistency and fully personalized experiences.

3. Document the Risks

Digital transformation is an ambitious journey that often produces all sorts of new side effects, including new risks. Failing to identify and mitigate the risks of a digitized approach may lead to disaster. That is no reason to abandon digital transformation, but it means you should conduct business-level cyber risk quantification. The objectives of cyber risk documentation and quantification are to:

  • Tackle risk management planning
  • Assess technology risks and gaps in compliance
  • Put IT events in a business context
  • Identify virtual elements of risk
  • Provide a template for future assessments
  • Develop mitigation plans and procedures
  • Create a well-equipped executive and cross-functional team
  • Adopt the right degree of capital investment
  • Reduce long-term costs

4. Run Pilot Tests

Pilot programs are an effective way to obtain quick results and choose the right combination of approaches. The pilot needs to be designed so partners, stakeholders, and end goals drive the agenda. Historically, organizations implementing a technology solution would lay out strategic plans and then invest a lot of money in projects that did not result in the expected business value. A pilot enables organizations to cost effectively obtain a clearer understanding of the successes and shortcomings of the digital transformation strategy, and make adjustments, before implementing any new tools.

5. Map Out Technology Implementation

The ultimate impact of implementing increasingly complex and interdependent IT systems depends on the effectiveness of your digital roadmap. Without a digital transformation roadmap, you’ll end up with initiatives that can’t stack up against the current business. You need to define the actions and resources required to achieve a digital future. The easiest place to start might be to answer two questions: ‘Where are you now?’ and ‘Where do you need to be?’. The answers to these questions will enable you to create a focused digital transformation roadmap that helps everyone around you see far ahead into the future.

6. Prepare for Culture Change

The most successful digital transformation strategy is grounded in organizational adaptability. Culture must be the core of any organization. And, without a collaborative effort to develop employee values and behaviours, no organization will survive. Organizations have to build a digital culture that is empathetic, experimental, customer-obsessed, collaborative, and agile.

This can mean redesigning office space or promoting attitudes that are integral to executing digital transformations. Organizations need to prepare, condition, and support their employees for continuous change and learning. Therefore, digital transformation requires a new momentum and rhythm in the organization. For IT leaders, it’s about listening to ideas from across the organization and focusing on communicating new initiatives.

7. KPIs and Measurement

As organizations begin to implement digital transformation solutions, business leaders have to rely on key performance indicators (KPIs) for effective IT measurement. Executives should pay special attention to:

  • The number of processes performed with new software
  • Customer acquisition costs
  • Customer lifetime value (CLV)
  • Customer experience / satisfaction
  • Employee experience / satisfaction
  • Adoption of innovation accelerators
  • Revenue from new digital services
  • New business models adopted for different markets

While traditional KPIs such as ROI, cost amortization, and sales revenue booked should all be measured, organizations should aim for leading indicators, not lagging ones.

8. Governance

Digital governance can be best viewed as the creation of clear accountability for digital transformation strategy, policy, standards, and decision making. An organization’s governance set-up depends on the needs and requirements of its stakeholders, the processes they engage in, and their regulatory context. Therefore, senior management must create a governance framework that uses the organization’s digital assets to identify and meet the stakeholders’ needs while ensuring compliance with regulators. Irrespective of whether the governance framework is for a unit or an entire business, the alignment between business processes and assignment ownership needs to be defined

Getting Started

Digital transformation has become a worldwide movement, and many organizations are moving towards continuous optimization across processes. Executives in all industries are using digital advances to create new customer experiences, business processes, and organizational culture. In the end, the decisions businesses make on how to evolve will focus on the need to bridge the gap between offline and online worlds. The one thing we can be sure of is that transformation will create new opportunities for businesses.

Embracing digital transformation is key to remain relevant and is a continual effort that can be daunting. If you are planning to implement a digital transformation project in your organization, Softlanding’s experts can help. Contact us to learn more.

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