In today's largely digital business landscape, the majority of companies have realized the potential impact of digital transformation on their organization and its place in the market.
This has led to the widespread adoption of digital technology not just by new tech start-ups but also by well-established companies in traditional industries.
What is Digital Transformation Strategy?
A digital transformation strategy is a process of assessing the digital maturity of a company, paving a clear path to large-scale change, and executing it to achieve true digital transformation. The scope of digital transformation strategy goes beyond just adding new pieces of technology. It involves a cultural change, hiring the right people, adding technology that accentuates expertise, and discovering a better, more elegant way to work.
According to the 2021 Digital Business study, up to 91% of organizations have adopted or have plans to adopt a digital-first business strategy. But knowing the importance of digital transformation and implementing a digital transformation strategy framework are two different things.
Reports indicate that up to 70% of companies that implement digital transformation end up failing at it. The fact that digital technology adoption is disrupting markets and unsettling industries is a well-established fact. The million-dollar question of course is how to get there.
Here's how you can build your Digital Transformation Strategy:
1) Starts with the "Why?"
2) Set up clear goals
3) Evaluate your Digital Maturity
4) Tools that can accelerate Digital Transformation
5) Prepare your organization for a major shift
6) Kick Start your Digital Transformation Journey
Start with the "Why?"
When most business owners think about digital transformation, the first thing that usually comes to mind is acquiring a new digital tool or implementing a digital system. However, this approach isn’t really a good one because it fails to ask the right question.
The more important question to ask when you start thinking about implementing digital transformation is why. In fact, this applies to all types of initiatives or new projects an organization wants to implement including a digital transformation program.
Many organizations fail to ask this question before starting their digital transformation journey and this is often why they struggle with it. Basically, you’ll need to define what digital transformation means for your organization. Every organization is unique and the reason for starting on a Digital Transformation journey is often unique to you as well.
Understanding why is digital transformation important will help you link your current business strategy to the future digital transformation strategy you will be implementing for your organization.
Set up clear goals
As we have established from the first step above, the reasons for implementing digital transformation differ significantly from one organization to the other. By implication, the goals and direction you’ll be taking your digital transformation journey are unique to you as well.
Generally, the end goal of digital transformation is usually one of the following:
- Optimizing processes and operations
- Gaining competitive advantage
- Increasing top-line growth
- Improving customer experience
At this stage of the process, you’ll have to establish what your vision and objective for your organization are and how Digital transformation fits in to help you achieve them. Establishing your goals this way will help determine the next step of your digital transformation journey.
Doing this will also be valuable for discerning the results or defining your KPIs to measure the effectiveness of the strategy once it has been implemented.
There’s really no magic formula for setting the goals for your digital transformation efforts especially since every business is different. You’ll have to do the groundwork needed for thoughtful goal setting.
This usually involves analyzing the long and short-term goals of your organization. Identify areas where digital transformation can help achieve these goals. This also helps in determining gaps that require digital acceleration based on your current digital capabilities.
For instance, implementing digital transformation might be one of your short-term objectives towards reducing turnaround for your service delivery to gain a competitive advantage.
In this case, building a digital transformation strategy framework will be different from that of a company whose objective is to transform the Quality Assurance process to deliver high-quality products that meet standards of engineering excellence.
The main point here is to ensure that the goals set are practical, attainable, and of long-term benefits. This is what makes the difference between unrealized ambitions and lasting change for your organization.
Evaluate your Digital Maturity
Digital transformation is a journey, and it does not take place overnight. It is a gradual process that involves transforming your technology, people, and processes. One crucial aspect of executing any strategy is analyzing where you are on that journey.
To get started, you’ll need to assess your current digital maturity. This includes the people, platform, or technology you use as well as your processes. As the saying goes, you have to understand where you are before you can know where you want to go and how to get there.
Evaluating your current digital maturity might involve:
- Carrying out a survey of your organization
- Create an assets register for your digital assets to determine what you have now and what you can do with them
- Taking feedback from staff about technology and processes
- Gathering requirements and capturing high-level processes
When assessing the current state of digital transformation for your business, you have to examine the focus of your digital transformation initiatives. Next, you’ll need to determine the capabilities needed before these goals can be achieved as well as your current limitations.
Once this has been done, you can now figure out how to align your needs with your current business model to determine the areas that’ll receive greater prioritization towards achieving your transformation ambitions.
Tools that can accelerate Digital Transformation
The next step in mapping your digital transformation strategy is establishing how you want to go digital. Since you have established your end goal and assessed your capabilities, you’re in a good position to determine the digital transformation solutions that you’ll need to use
The type of tools to choose depends on the objectives you have in mind. It could include front-end transformation solutions such as tools that improve product or customer experience or backend transformation tools such as cloud and IT infrastructure. Some solutions also serve the purpose of transforming both at the same time. Productivity tools and automation tools support the digital transformation initiatives in improving operational efficiencies.
Some examples of tools to consider include:
- Tools for adding digital components to existing products
- Adding a digital ecosystem to your business model
- Tools for transforming business operations
- Tools for improving customer experience
Depending on the current state of your digital transformation, your strategy might simply be a small change or a big one that involves both internal and external transformation.
Regardless of what you need, choosing a digital transformation solution such as Kissflow is a good idea for your digital transformation efforts. In many cases, digital transformation puts pressure on the IT team to create and deploy solutions that meet the high-level requirements needed to attain digital maturity.
With digital transformation solutions like Kissflow, you can democratize the building of the tech solutions they need to solve specific business problems and bridge the digital capability gaps you have discovered. They also help fast-track digital transformation while cutting down the cost and reducing pressure on IT teams.
Regardless, it is always important to remember that any digital solution is a means to an end. You should always keep your end goal in mind when setting your digital transformation strategy. This ensures you bring value to your customers and your business and not just add new technology for the sake of it
Prepare your organization for a major shift
According to a Jabil Survey, employee pushback and lack of expertise are the top two barriers to digital transformation initiatives. This shows that a key component of your digital transformation strategy is people.
People create strategies, use technologies, and implement digitized processes across your organization which is why it is imperative that you carry them along as you plan a major digital shift in your organization. Preparing your employees for digital transformation often involves the following:
1. Get the Right Buy-in
The daunting question right now is who should be involved in building an organization's digital transformation strategy. Well, You cannot implement a strategy without the key players in the company aligning with your plan. According to a Prophet report, CIOs sponsor or own 28% of digital transformation initiatives while about 23% of CEOs play a leadership role in implementing the strategies.
A key part of mapping out your digital strategies is getting high-level executives in your organization to commit to it. This is critical to getting your Digital Transformation project off the ground and running effectively.
Considering all the benefits of digital transformation for businesses, one would think that getting top-level executives to buy in would be relatively straightforward. However, management often considers initiatives that affect every aspect of business like this as a big endeavor which is why it often takes a long time to convince them to buy in.
2. Ensure you have the right skills in place
One of the top reasons for failure when implementing digital transformation projects is a lack of skills. Most digital transformation initiatives depend on cutting-edge technology that requires a level of skills and expertise that may not be readily available in-house.
According to an Indeed State of Digital Transformation report from 2017, 31% of respondents noted that a lack of digital talent and expertise was a real challenge to the success of their transformation initiatives.
Clearly, when working on a digital transformation strategy, businesses need to consider hiring skills that are needed to drive their transformation efforts forward.
Another effective solution to this problem is implementing digital products designed to leverage existing knowledge-base or skills within an organization. Platforms like Kissflow leverage citizen development as a pathway to achieve digital transformation goals.
3. Prepare for culture change
Finally, you have to figure out how to get everyone in your company on board with your ideas and goals for digital transformation. True digitalization doesn’t just change the way a company works, it also transforms a company’s culture from top to bottom.
Resistance to such culture change is a roadblock that may delay or lead to the failure of digital transformation. It is therefore imperative that you communicate digital transformation goals to employees and show everyone the potential impact of digitalization on company culture.
Successfully adjusting your company culture to embrace the changes that will come with Digital transformation is key to ensuring the success of such an initiative.
Kick start your Digital Transformation Journey
So how do you get started with your digital transformation journey? Typically it starts with digitizing. With your strategy in place and employees fully on board, you can now proceed to look more practically at your plans.
Usually, the big question is what needs to be changed first. Your roadmap would typically detail what needs to be done, how it will be done, and how your business will change progressively as you implement the strategies over a given period.
The truth is, that the path to achieving digital transformation will vary from one business to the other. Usually, companies go for the things that will have the biggest impact and drive the most value. But you can also start by digitizing simple processes such as payroll processing, leave approval automation, inventory management, invoicing, etc.
These are simple and cost-effective processes that you can automate right now with a simple solution like Kissflow. Processes that are best suited for digitization are repetitive and rule-driven.
Of course, identifying the most critical candidates for digitization is not always easy. The path to follow will depend on all the other aspects of your strategy that have been highlighted above and the direction you’re moving with your plans.
Track your Digital Transformation progress by defining the right KPIs. To keep up the budget, it is important to measure the ROI of your Digital initiatives. This can help you predict the state of success or failure of the journey.
When most people think of digital transformation, they think of digital tools and how they impact business. But even before considering technologies, you have to define what your digital transformation will entail and create a comprehensive business strategy that works toward your goals.
Once this has been put in place, you can now proceed with reviewing the mix of technology, people, and processes, you’ll need to implement or modify towards achieving set goals.
Technology is still at the center. And it helps to have a versatile work platform that helps drive digital transformation. Kissflow’s digital transformation platform not only boosts productivity and solves multiple operational problems but redefines the way you work without the stress of a large-scale shift.