Elements of a Successful Digital Transformation
Successful digital transformations can deliver profound, organisation wide improvements to efficiency, staff and customer experience and overarching business performance and success. That said, they aren’t a quick fix band-aid style solution, instead they rely on going deep into the core of an organisation to change it from the inside-out – which means it is not a path for the feint hearted.
When making such foundational changes, organisations need to stay on track. An experienced digital transformation agency will set out the scope of work that should be undertaken and guide the organisation along that path throughout the project lifecycle. The moving parts of a digital transformation, which are complex at times, require an experienced hand to guide them to ensure best practices are followed and successful outcomes are delivered.
What is Digital Transformation?
Digital transformation describes the process of reviewing every aspect of a business’s operations, deciding where technology can make improvements and what technology to use (including how it will all work together) and then finally implementing those changes. It results in an organisation-wide shift in the way that the business operates.
Digital Transformation focuses on innovation and future-proofing, not just ‘bringing things up to date’.
Where to Start
Start with a strong understanding of your customer. Great digital transformation projects look at all aspects of a business – the systems, its platforms and its customer journey. Start with a strong understanding of your customer. Your customer is going to be the lifeblood of your business, as customer experience becomes a main driver of competitive advantage in a competitive global environment. Invest in background Customer Experience (CX) research to ensure you aren’t operating on assumptions - conduct surveys, set up personas and identify the real-world pain points your customers experience. Putting them at the centre of your goals will give you the best chance at a successful transformation.
Staff can also be a valuable source of information - their insights about internal pain points and how systems can be improved will enable you to make decisions and changes that allow them to do their jobs better.
Don’t be afraid to “look at everything” that might need changing in your organisation. Understanding everything you can about your business ensures you have a complete picture of your organisational needs, and determines which areas of your business your digital transformation project needs to focus on. It is critical when doing this to get a ‘third-party’ view rather than relying on what you think you already know, often an outside perspective can reveal far more than an internal one.
Getting to a successful future-stage might seem like a path that is too long or has too many moving parts. Looking at “everything” can make the project seem like an impossible task, but even if certain pieces cannot be implemented in the first phase, having a complete picture of your ideal endpoint enables a business to prioritise works and ensure that changes made now will also support future potential enhancements.
Most organisations looking to undergo a transformation have accumulated technical debt with numerous systems that perform different tasks and cannot communicate with each other. They realise that other organisations are gaining a competitive advantage with more efficient data collection, enabling more informed business decision making or more powerful marketing via a single customer view.
The key to digital transformation success is in its ability to future proof an organisation, not just bring the organisation “up to date”.
When future proofing, organisations should:
Invest for the next 5 years - Understand that transformation success may take time to be fully realised as culture shift, technologies and ways of working are adopted.
Build from the ground up - Start with customer experience investment to understand your customers and define a strategic roadmap to address their pain points.
Know when data will be needed - Build new systems so that data is available where and when it is required.
Reduce siloing - Allow business units to have access to the information they need to break down communication walls by gaining greater control over who can use data regardless of its collection point.
Understanding the future utopia-state that an organisation is looking to achieve keeps the digital transformation strategy on track, even over longer time horizons.
Stakeholder Roles in Transformation
Agencies that understand all the elements that make a digital transformation successful know that it is, in part, their responsibility to use their experience and understanding of digital transformation to enable the project to run successfully.
At times this means challenging the customer to really think deeply about their organisation and be honest about what it’s going to take to achieve the goals they set out at the start of the project. Utopian future-states are going to take work to achieve, so digital agencies need to be honest about the input required to reach them.
It is also important to resist the temptation to over-engineer a problem when a simple solution will do. While successful digital transformations can be complex due to all of their moving parts and the organisation-wide impact, there may be some more practical ways to solve problems that don’t have all the ‘bells and whistles’, but will still be fit for purpose and contribute to driving a strong return on investment.
Clients must ensure stakeholders are engaged. Having the “whole organisation behind the changes” is somewhat of a cliché, but in this case it is particularly true.
Embracing change needs to be driven from the top. The C-suite and board need to work hard to ensure the whole organisation are invested in the change and that they are properly resourced to make the change happen. Organisational-level change can generate fear or resistance, so clear and transparent communication from top management tiers can help to proactively manage concerns.
Project management needs to be sharp, with exceptional communication and project management between the agency and the organisation at the forefront of executing the project. Project managers (PMs) or Business Analysts on the organisation’s side need to have capacity resourced into their days to interact with the agency consulting on the transformation - otherwise it can take a long time to get these projects moving and delays become inevitable.
Agencies will often go so far as to recommend a temporary PM to handle internal tasks, a kind of “project leave” where key PMs take time away from their normal work to ensure the smooth progress of the digital transformation project. This ensures the agency can run with someone who knows the ins and outs of the business and can act as a conduit between the agency and the client.
Measuring Digital Transformation Success
Modernising systems can represent a significant investment for some organisations. The ROI of the transformation is not likely to be realised immediately, instead improvements will progressively show up in:
Improved efficiencies – in data collection, in time to perform operations, in marketing and business decision making impacting bottom line.
Improved cost savings – staff can perform tasks faster or be reallocated to other tasks entirely as new systems take over some of the day to day work, improving ROI across the workforce.
Improved customer retention – attracting new customers can be 5x more costly than retaining existing ones. Best practice customer experience is a key driver of competitive advantage in attracting and retaining clients. .
Staff surveys – gain valuable feedback on the improvements the changes have made to staff’s work life and those of the customers they interact with.
Resolve accumulated technical debt – generate savings from no longer having to keep old systems up to date, repairing comparatively expensive legacy systems and software.
Pitfalls to Avoid
A successful digital transformation relies on trust and key stakeholder buy-in. Internal stakeholders at all levels need to know why this is being done and need to be supremely aware of the rationale behind the strategy so they can lead the change from the top. Resistance to change is natural, but can impact the project negatively, so organisations need to be ‘all on board’ if the project is going to succeed.
Trust in the delivery team is also a key pitfall to avoid. With such complex changes, that may touch many elements of a business, having consultants who fully understand the process and whose advice and methodologies are trusted ensures a positive outcome.
It’s clear that both agency and client have roles to play in undertaking a digital transformation project successfully. At all stages of a project, communication lines need to be open and honest between both parties to ensure the requisite changes are made ahead of time. By looking to the future, not just to the present, businesses can design a transformation project that will future proof their organisations and drive long term improvements in their bottom line.