For a business operating in today's fiercely competitive digital world, implementing digital transformation is one of the best decisions you can make for your organization. A digitally transformed business uses digital technology to optimize its processes to stay ahead of the competition and better serve customers.
A Gartner analysis carried out in 2019 predicted a 50 percent increment in the adoption of digital transformation by businesses across various sectors over the next four years. Digital transformation is an exciting venture. But it's not a walk in the park. It often involves a complete revamp of an organization's work culture. It rides on the back of a competent team of IT personnel and well-equipped business users. These teams help align technology tools with business goals and unique customer viewpoints.
In the journey to unravel the complexities of a digital transformation initiative, there's also the question of who leads it. While some organizations create new roles entirely, such as Chief Digital Officer (CDO), others simply task the Chief Information Officer (CIO) or the Chief Technology Officer (CTO) with the responsibility of seeing to the success of their digital transformation drive.
But away from the organization intricacies of establishing a digital transformation initiative, the big question is how exactly it should be implemented. How does it work, and what are the steps to implement it?
Some businesses have struggled to implement their transformation plan simply because they do not know the answer to these questions. This post is a brief overview of the basic steps to follow in implementing a digital transformation strategy.
7 Key Steps to implementing digital transformation
According to reports by McKinsey, KPMG, and BCG, the chances of an organization's digital transformation efforts failing stand somewhere between 70 to 95 percent. The numbers don't look good, but they're even worse when you're unaware of the steps to follow. Digital transformation can be daunting, but it isn't impossible.
Here are the key steps on the journey toward transforming your organization digitally:
1. Assess the current digital state of your organization
It's a no-brainer that every major initiative requires proper planning. But how do you even begin to plan when you do not know where you are? Digital transformation is a journey, and even without being aware of it, every organization is at a specific point on that journey.
Without knowing where your organization stands, you won't be able to create an effective plan that captures what you really need. For instance, there are digital tools you already use for your business, even without a comprehensive digital transformation plan.
This means you must evaluate your current digital business processes and adjudge your use of cutting edge technologies. In addition to taking stock of your current digital capabilities, you must examine your current performance level, human resources, financial capabilities, etc. You can also ask internal users and end consumers for reviews and get inspiration from top digitally-focused organizations within your industry.
A comprehensive digital transformation assessment like this will help you determine the right approach to journey and put other steps in the process in the proper context.
2. Identify and analyze the gap
You need to implement a digital transformation strategy for your business because you need it to move you from point A to point B. Point A is your organization's current digital situation, and point B is where you should be or want to be. In between, this gap can only be filled with the right use of digital technology.
You must identify and analyze these gaps within your business operations, technology stack, customer experience, strategy, and leadership to be effective. This step also helps you to establish the "why" of your digital transformation plan.
This will also help you prioritize the different areas of your digital transformation plan and determine which areas will drive the most impact for your organization.
3. Define the main objectives for digital transformation
Your digital transformation strategy must include a clear set of objectives and the steps to achieve them. Digital needs vary across different organizations, so the goals will differ.
- Improved customer experience:
- Better Internal Collaboration:
- Increased efficiency
- Reduce operational cost
- Security of files and documents:
Your digital transformation goals may be one or a combination of objectives. Have a clear vision of what's needed and what needs to be done to get there.
4. Create your digital transformation strategy
Based on the different factors covered so far, such as the current digital state of your business, the gaps to be filled, and your goals, you can now proceed to establish a digital transformation strategy. Many organizations fail at digital transformation because they fall for the "new shiny toy" syndrome. They keep buying new tools and adding to their technology stack without a clearly defined strategy. You can create a comprehensive digital transformation strategy by following these steps.
- Goal alignment: You must ensure your business goals and needs lead the discussion when discussing strategies. Start by aligning your goals to the current state of your business. This means identifying your short, medium, and long-term goals and creating a realistic plan that takes you toward them.
- Set a budget: Setting a budget is one of the best checks to keep your digital transformation plan on track. It'll help keep your expenses in check so that you work towards digitally transforming your business while maximizing spending.
- Organizational change: After setting up a budget, ensure you prepare your employees for the change that'll come from it. Digital transformation requires a culture change. It is imminent, and you need your employees to embrace this change if your plan will ever work.
- Identify and implement your choice of technology: There are lots of software that promise benefits for your business process. But not all of them will align with your strategy. Determine the tools you'll need and choose between the available options for each use case.
5. Build a team to achieve digital transformation
It would be best if you built a team to help your business achieve its digital transformation goals. The success of your transformation rests heavily on your team. While technology is the bedrock of your digital transformation plan, that's not all there is to achieve this goal. Putting people with the right attitude and skills together is essential.
This does not necessarily mean hiring new people or investing heavily in training. The first step is getting buy-in from your top-level executive and inspiring employees to see the need for change.
Up to 40-50 percent of salespeople don't use their CRMs, and even when they do, they're probably not leveraging their full potential. This is one of the reasons why you need the right people driving digital transformation for your organization.
Your digital transformation plan needs visionaries and evangelists. You also need project managers to implement the strategies you have in place. Your employee mix should also include the following:
- IT specialists
- Data professionals and business analysts
- Marketers and salespeople with a clear understanding of customer needs
- Financial analysts
- Security advisors and so on
Fortunately, you don't have to hire each person on this list. You may have to outsource some of these talents depending on the current state of the talent pool within your organization or invest in retraining staff.
6. Take initiatives and track them
Digital transformation is about taking the initiative to move your business forward. Breaking down your entire strategy into smaller initiatives with clear, trackable goals makes achieving them easier.
Say you want to transform and streamline internal processes within your organization for optimal efficiency. Instead of taking the whole thing at once, you may start with a strategy that first digitalizes your request and approval process.
Next, you can migrate your operations to the cloud or adopt a digital collaboration platform for handling daily tasks and projects. Gradually implementing these initiatives across different organization components will move progressively toward your goal.
7. Measure the progress
Digital transformation often involves solving legacy problems with a new technological approach. The only way to see how far you have gone is by measuring the progress of each initiative with clearly defined KPIs and metrics.
Ways to measure the progress of digital transformation initiatives:
- Getting feedback from your employees,
- Measuring changes in customer feedback, and
- Examining hard data across the different initiatives you're implementing
Key metrics to track include:
- The level of digital adoption
- ROI on digital investments
- Customer satisfaction ratings
- Digital employee experience, etc.
Taking feedback and measuring progress this way can help you reevaluate your plans and improve your strategies to drive better results. Define the metric that matters to measure the progress of your digital transformation journey.
One key factor that ties all the steps of your digital transformation plan together is your choice of technology or tools you choose to drive digital transformation for your organization.
Reimagining how work is done across your organization starts with choosing a robust but intuitive platform that simplifies the different aspects of digital transformation. That's where Kissflow comes in.
With Kissflow, executing your digital transformation plan is as simple as ever. Kissflow takes a No-code approach to powering a digital transformation switch for your organization. It's the perfect way to bring business users on board with your digital transformation plan without tension between them and IT.
Digital Transformation platform also makes it easier to execute multiple digital changes across your organization and track the progress of your digital initiatives with insightful metrics.