How to approach digital transformation (the right way)

May 16, 2021

Digital transformation is often approached backwards. Many organisations look to implement the latest technology, but neglect to consider whether the technology that they are implementing does in fact actually meet their business needs. This usually ends up in a messy situation involving a redundant tech system that no one wants or uses, a ton of wasted cash and a bunch of aggregated employees who are now completely resentful towards additional attempts to introduce absolutely anything new.

With 70% of digital transformation projects failing, it is vital that leaders take a strategic approach to digital transformation if they are to reap the long-term operational efficiencies, revenue generation and improved customer experience benefits that can be generated through successful digital transformation initiatives. Thorough research, strategy development, and investment plan should be developed from the outset and should consider not only the obvious associated costs and benefits for immediate technology use cases, but should also take into account the longer term implications and benefits of digital transformation across the organisation.

To enhance the chances of long-term business success, here are four initial steps leaders must take to successfully approach digital transformation in their own business.
 
  • Define the problem

It is essential to first identify the problems that should be solved through the use of digital technology, and work backwards from there. It sounds obvious, but it’s unbelievable how often it’s not the case.
 
Organisations that dedicate time upfront doing the necessary groundwork to truly define and understand the business problems clearly, see much greater success in their transformation efforts. Those that don’t, often realise over time that they have wasted valuable time, effort and financial resources as the solutions they implement don’t actually solve the business problems that they thought they would.
Once clearly understood, digital leaders should focus on prioritising the business problems in terms of strategic importance by asking the following questions, to determine in what order to tackle the issues. 
  • What is the impact operationally, financially and on the customer experience that solving this problem will have on my business?

  • How difficult is the problem to solve? (note, often a little extra help here. Often problems are perceived to be much more or less difficult to solve than in reality, and so it's useful to ask someone who has done this before

  • What is the priority level of solving this problem within the business, what will be the impact if this problem is not solved in the short, medium and long-term?

 
  • Think long term

One of the main reasons digital transformation initiatives run into issues is that organisations focus on simply solving the problem at hand, but don’t think about the wider impacts of their actions. Digital leaders should, from the outset begin to consider the longer term requirements operationally and also what technology stack will be required to support future digital initiatives.
 
 As an example; currently, the main priority may be to continue to increase employee connectivity as we continue to navigate the pandemic, but in the future (if not already), an increasing number of organisations will be required to adopt more innovative digital solutions to take advantage of the enhanced levels of intelligence that can be delivered through advanced analytics and internet of things (IoT) solutions. It is important to understand what is required technically to support such things so that the organisation is ready to scale digital transformation efforts quickly and efficiently.
 
  • Set a vision and measure success

Organisations that are successful in their digital transformation efforts have a clear digital vision for the future tied to clearly understood success metrics. To be effective, digital initiatives must be a strategic priority, aligned to the corporate mission, vision and that is continually communicated via a well designed change management plan that encourages employee buy-in from the outset. Digital leaders should a
lso set clear goals for how they intend to measure ongoing success for transformation and they should define the KPIs and metrics that will be used to do this.
 
  • Address skills gaps

Understand where there are digital skills gaps within the organisation and begin to plan accordingly to address these either by upskilling or making operating model changes to support transformation goals. Identify the people already in the organisation that can help conduct problem definition research and that have a keen interest in digitising the business.
Select a diverse range of employees from various business groups and demographics to be part of the team. The primary reason for this is that when an organisation begins to implement digital technologies, they will undoubtedly face some friction amongst employees. This is perfectly normal. As human beings, we don’t particularly like change and the introduction of new innovative technology solutions can feel uncomfortable. However, clearly communicating the reasons behind digital transformation initiatives and promoting ambassadors for change throughout various levels and departments of the organisation will make digital adoption much less painful in the future.

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