87 percent of senior business leaders believe digitalization is a top priority. Yet, only 40 percent of organizations can bring their digital initiatives to scale.
Here’s a simple fact: Most digital transformations fail.
The difference between successful and unsuccessful digital transformation initiatives lies in the way you assess your organization’s current stage of digital maturity.
Make a wrong assessment, and you may join the vast majority of enterprises that have failed at digital transformation.
The key is not to skip ahead. It's rare to find examples of enterprises that have successfully leapfrogged through the early phases of transformation.
Take things one step at a time and invest both resources and time into each step to get itpo right. Growing a company’s digital maturity through a well-planned list of stages increases the chances of success.
Picture this: You’re the senior manager of a retail organization and considering implementing an e-commerce platform to increase your reach to customers. However, to ensure your digital capabilities, you decide to assess your company’s digital maturity before proceeding.
The result shows that your company is still in the early stages of digital transformation. You do have some digital processes in place, but most of your operations are powered by legacy systems. The recommendation at this stage is to focus on improving your digital foundation before you implement the e-commerce platform. It could mean investing more in data analytics, cloud computing, and cybersecurity. Digitizing your core processes this way will improve the efficiency of your e-commerce platform. If you are in manufacturing, investing in cloud MRP software is critical for your business growth.
Senior leaders and decision-makers need to be aware of the distinct stages of digital transformation and know how to make informed decisions at each stage to drive their organization toward digital maturity.
Stage 1: Initiation
In the initiation stage, the business still operates on basic manual processes with no standardized method for managing workflows. Communication is manual (primarily by email), and spreadsheets handle data. Most organizations at this stage either don’t collect data at all or have unusable data.
With minimal awareness about the potential benefits of transformation, there is resistance to change among employees and company leaders.
Identifying key processes and functions and digitizing them first lays a foundation for assessing the entire operational model and developing a more comprehensive plan for digital transformation.
Stage 2: Transition
Companies that make it through the initiation stage begin to experience little pockets of transformation. It might be as simple as implementing new self-service touch points for customer services, automating key HR processes to improve employee experience, or redesigning core processes to improve operations.
Since digitalization is fragmented at this stage, there’s still a mix of manual and automated practices across different departments. Some teams will embrace digital transformation faster than others. Data is collected but siloed, preventing the establishment of a single source of truth.
Due to insufficient knowledge of IT and a lack of an enterprise-wide initiative to tie all digitization efforts together, there is a high risk of shadow IT. Employees may begin to use unapproved apps and cloud services without consulting IT.
Fastracking enterprise-wide transformation by adopting a unified, easy-to-use platform can ease the transition from manual to fully automated practices across the organization. It can help eliminate shadow IT and bring fragmented digitization efforts under a unified umbrella where they can be managed effectively by the IT department.
Stage 3: Integration
With digital transformation in full swing, the integration stage is where organizations formalize their transformation efforts by connecting disparate business units through core systems. Unifying digital transformation creates a single source of truth for data, which is made available across all departments.
It boosts visibility and increases the data quality, making it easier to leverage the available data for more reliable decision-making. The few remaining manual processes from the transition stage are targeted directly for rapid transformation. Every new challenge is managed digitally, and new digital initiatives are introduced to further drive transformation.
Stage 4: Innovation
While there’s no end to digital transformation, organizations can reach a stage of optimization where processes begin to flow seamlessly, with quality data and intelligent systems guiding decision-making.
At this innovation stage, the organization’s goal is fully intertwined with the digital transformation efforts, and everything is unified under an established governance system. Digital transformation enters a hyper-automation phase, thanks to the adoption of Artificial Intelligence, Machine Learning, and other automation tools that set complex business processes on auto drive.
A top-to-bottom adoption of digital transformation also characterizes the innovation stage. The CIO and other business leaders take full ownership of digital transformation, making data-driven decisions that drive innovation. Employees now work with the IT department, which is crucial in setting guidelines for adopting new technologies and monitoring their implementation.
An organization in this phase of digital transformation has attained a high level of digital maturity and is deeply committed to ongoing innovation. Being digitally mature means you are no longer reactive to new tech but have a structured plan for exploring new possibilities and adopting them as long as they align with the ongoing digital transformation plan.
Conclusion
Every digital transformation phase has a unique set of challenges. To visualize how to move forward effectively, you must know where you currently stand and identify gaps in your digital transformation strategy.
Where are you on your digital transformation journey?
Take this free 5-minute digital transformation assessment to measure your organization's current state of digital transformation.
