7 Steps to Digital Transformation
History is littered with companies that failed to see the writing on the wall and did not survive. If I go back too far, I’ll show my age, so I’ll stick to Blockbuster Video, AOL, and CompUSA. When businesses are unable or unwilling to recognize the need for change, either in their business model or in the technology they use to support their business or better serve their customers, they suffer the consequences.
The writing on the wall right now is digital transformation. Yes, the term has been around for a year or so, but most of us were waiting to see if it stuck—and it has. There is no way around it: any organization that wants to survive in a digital word needs a well-thought-out digital transformation strategy.
Digital Transformation, Defined
In its simplest form, digital transformation is the process of using technology that taps into new ideas and innovations to solve problems. But Microsoft—clearly on the digital transformation bandwagon from the start—defines it as “reimagining how you bring together people, data and processes to create value for your customers and maintain a competitive advantage in a digital-first world.”
What makes the Microsoft definition much more exciting is the fact that people, data, and processes—rather than technology—are the key to transformation. Technology plays a major supporting role, of course, but it’s a tool to achieve a greater goal. Digital transformation is all-encompassing, from IT to operations to customer engagement.
7 Steps to Digital Transformation
Because every organization differs, the path to digital transformation also varies. In fact, if you do a search on how to digitally transform, there is no shortage of blogs, articles, whitepapers, and books that tell you how—and they all say something slightly different. After reading much of this material, we’ve created our own to-do list, based partly on what we’ve read but mostly on what we’ve experienced. The list is purposely designed to be short and actionable—a framework you can use to create a digital transformation plan that best suits your organization.
1. Create an Innovation-friendly Culture
Digital transformation is an iterative process. There will be stops and starts, things you try that don’t work or partially work, and that’s ok, because this is all about innovation. Before you get started, create a culture in your organization that gives you some latitude. This means shifting from traditional hierarchies, involving all employees and creating a dynamic, collaborative environment that allows everyone to provide their opinions, ideas, and FEEDBACK openly—knowing that they will be listened to and taken seriously—and assuring them they will not be “punished” if something goes wrong.
2. Assess Your Current State
Before you create or execute a plan of any type, you need to have a firm understanding of your current situation, including what’s happening internally and what your market is experiencing and demanding. Some questions to ask include what current demands have not yet been met, and how can digital transformation help meet your goals?
3. Identify the Business Processes to Transform and Create Your Strategy and Budget
You’ve heard about eating the elephant one spoonful at a time. This is especially true for digital transformation. Once you’ve looked at the big picture, you need to identify existing business processes that need to be redefined. This step also includes setting a budget. Don’t forget that your budget needs to include not only technology, but resources, training, support, and the cost of lost productivity following implementation of the plan (no matter how carefully you plan, there will be some loss there).
4. Identify the Technologies You’ll Use
Unfortunately, digital transformation is too closely connected with the technology that enables it, and there are many technologies being touted as critical for digital transformation. Just remember that technology is a tool that supports a goal, not the other way around. Don’t let the tail wag the dog; evaluate technologies based on the processes you want to optimize.
5. Put the Right People in Place
While technology should not dominate your transformation plan, it still plays an important role. Make sure you have the people (either internally or outsourced, depending on your preference and budget) with the skills and the attitude to help take all those great ideas and bring them to life through an actionable plan. This also includes outside partners, like your technology provider(s).
6. Create a Digital Transformation Roadmap
With the processes identified and the technology and people in place, the next step is to create a roadmap to execute your digital transformation plan. Going back to our elephant, we recommend breaking the roadmap down into phases. Also, consider testing each idea on a smaller scale before doing a full-scale rollout. And don’t forget training in your plan! New technology always requires training, and in the case of digital transformation, you might also need to train your employees on new processes.
7. Determine Your Goals with KPIs
Be sure each phase, as well as the overall plan, has clear goals/KPIs to achieve. Regardless of the plan or initiative, metrics must be in place to demonstrate the effectiveness and guide future decision making. Also, put mechanisms for mitigating risk in place throughout the process. Your management team will sleep better.
Digital Transformation is an Ongoing Process
Digital transformation doesn’t stop after you’ve successfully implemented your plan. It is, by definition, an ongoing process—and that’s a good thing. First, technology updates will occur frequently (and automatically since they’re in the cloud), and you need to be prepared to take advantage of new features and opportunities offered by those updates. Second, the market is ever-changing, as are customer demands and needs. A successful transformation is one that can support a dynamic world while maintaining usability and productivity. Keep an open mind, stay informed about technology and market shifts, and stay tuned into what’s happening internally, and your transformation will continue to evolve along with your organization.
Are you ready to transform but don’t know where to start? Contact ArcherPoint to discuss how to begin evaluating your current state and the steps bey