Digital Transformation: Doing it Right.
The idea of digital transformation is getting a bit common.
We hear it said, time and time again, especially by software and hardware companies, that digital transformation will change the world! It's a big statement that has a lot of organisations wondering what digital transformation looks like for them and how it will change their world.
I think (hope?) most appreciate the importance and value of digital transformation. That put mildly, without it, organisations will fail to remain competitive and relevant. Though, with costs being at the forefront, it's interesting to note that organisations that do transformation well don't spend much more than those that don't do it well.
So, why do some organisations do digital transformation better than others? What qualities do they have that help them realise their digital investments? Perhaps it's because they realise:
Digital Transformation is not an app. It's not something you buy, and suddenly you’re digitally transformed. Instead, it's a business strategy that’s all-encompassing. Organisations that have been successful with transformation, those who've seen significant improvements in their bottom line, against those who haven't, know it's not down to spend. It's down to culture, mindsets and team buy-in across the organisation.
We lead from the top. Organisations that do digital transformation well usually have the CEO as the digital driver or championing someone who will be responsible for the journey and the success of the digital projects. Because of that, many digital initiatives are moving away from the IT department.
Traditionally, when it has come to optimisation, we've zoned in on being better, faster, and smarter. But, efforts should focus on employee empowerment, providing tools for your team to be more engaged and productive. And in parallel, you need to spend on your customer - how do you better engage with them? Don't forget that there should be a significant budget for the CMO.
Pre-COVID, the International Data Corporation (IDC) wrote,
"Global spending on DX (digital transformation) technologies and services are forecast to grow 10.4% in 2020 to $1.3 trillion." Several years ago, "...IDC predicted that over 70% of siloed digital transformation initiatives will ultimately fail because of insufficient collaboration, integration, sourcing, or project management."
A 70% failure rate is significant but clearly shows how influential your culture is when determining the success of your transformation journey. But this also extends to your business’s vendor and sourcing management practices - vendor selection, contracting, pricing, governance, and performance management. When running transformative initiatives with your external suppliers and partners, they must align with your organisation's culture. If there's no alignment or compatibility, you will undoubtedly fail.
Are you a risk-taker? As part of a strong culture, to be good at digital transformation, you must accept varying degrees of risk - though not necessarily across your entire business. You should create an environment within your organisation that not only allows for experimentation and failure but also supports and encourages it.
Data. Ugh... This can't be stressed enough. For a lot of us, the thought of data is scary. It's always been there, but the idea of organising data is a daunting thing. Where do you even start? How do you know where your data is (spreadsheets, printed documents, which platforms or machines it sits on); is it correct; is it data you want, or is it useless? Organisations that are successful with digital transformation know their data. They have it catalogued, it's correct, and it's the data they want to collect. They've moved away from gut decision-making and now use their data to make informed, data-driven decisions. This is a critical component of the transformation journey - enhance the relationship between data and your customers.
We've talked about data and risk - apply those to understand the existing systems in your business and how you might attribute different levels of risk to those systems. Here's an example: your accounting platform. Unless you're an Accountancy, I doubt you have a competitive advantage because of your accounting platform or system. Leave it. You don't need to mess with it. But what about an inbound marketing system? This could be something of differentiation and gives your business a competitive advantage. So, this is where you might take some risks to deliver faster, smarter, and better customer experiences. Get creative. Look at your services or products. Associate your risk appetite with innovation and how you better your customer experience and engagement.
Let's bring it all together. Here are some questions you might ask yourself to help with starting, continuing, or adjusting your digital transformation journey:
- Where am I in my transformation journey - how ready is my business to embrace the needed changes?
- Do my goals and objectives align with a digital strategy?
- What are my competitors doing that I could be doing or doing differently? Can I identify competitive products or services that have a component of ‘digital’?
- Have I done my foundational work? In other words, do you have systems in place that can get you started, i.e. CRM?
- With these applications, can I manage them all? Do they help create a strong foundation or a weak one?
- Am I collecting data that I can actually use?
- Does my digital strategy align with the business strategy and the goals, mission, and vision of the business?
- Will I have buy-in across the organisation?
