Key Strategies for Successful Digital Transformation
Successful digital transformation is about a lot of things. It’s about leading with a strategy that puts your business in the best possible position to innovate and grow. Successful digital transformation requires a company to have a clear understanding of the reason they are trying to transform. In today’s day and age, it’s essential to have a strategy in line with the world’s digital landscape.
What is digital transformation?
Digital transformation is a process that’s designed to help companies transform their business, IT infrastructure, processes, and systems to leverage digital technologies. To make a successful digital transformation, it is important to define your business and make a list of the key activities that need to be completed to successfully implement a digital transformation.
This includes business, IT, mobility, and software development. You should also define a strategy for the digital transformation, including the challenges and risks that will be faced. These challenges and risks could include the need for new skills, the need for new technologies, and the need for effective governance.
Why is it important to transform your business?
For many organizations, digital transformation is a top priority. Maybe you have a business that relies on a certain technology and it is an integral part of your core process. Or perhaps you have a business that is severely in need of a digital transformation. Regardless of the reason, digital transformation is a process that all businesses should pursue.
It is important to understand why a digital transformation is necessary so that your transformation can be successful. There are many reasons a digital transformation is necessary. One reason is that the digital world is constantly changing, and if your business does not keep up with it, you will not be able to keep up with your competitors. Another reason is that the internet is constantly changing, so if your business does not understand how this is impacting your market, you won’t be able to grow your business. Finally, your business needs to create a digital strategy. This strategy will help you understand what your company needs to do to be successful in the digital world.
How do you know if you’re ready for digital transformation?
Digital transformation can be a pretty intimidating thing to do. It is hard to know if you are ready for it or not. You need to be sure about what you are doing and how you are going to implement it. It is important to do some research first and get some educated opinions before you start. You need to be sure that you are ready for the amount of work that is involved. There are some steps that you can take to ensure that your business is ready for digital transformation. This includes getting your financial and operational systems in order, preparing your workforce and your customer base, and having a solid plan of action.
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Why is Success so rare in Digital Transformation?
Research by BCG shows that 80% of companies plan to accelerate their company’s digital transformations — and with good reason.
It may seem like a lot of companies are trying their hand at digital transformation, but only 30% of them succeed? If a company implements a digital transformation strategy, why is it that they are often not successful?
There are a few reasons that make digital transformation difficult. One of the main reasons is that it is not widely understood. If you want to try digital transformation, you’ll need to be aware of what your business needs and how it can become more efficient. Another reason is that digital transformation is a big change, and companies are often fearful that they will lose money by undertaking this transformation.
Some operational challenges come with a digital transformation. This includes the amount of time it takes for a transformation to take place and the skills needed to successfully implement a transformation. Digital transformations can define careers as well as companies. The fundamental question on the minds of all business leaders must be: “How can I ensure that my organization is among the 30% of successful transformers?”
Only 30% of transformations met or exceeded their target value and resulted in sustainable change; companies in this group are in the win zone. Some 44% created some value but did not meet their targets which resulted in only limited long-term change; these companies are in the worry zone. And in the woe zone, 26% created limited value (less than 50% of the target), producing no sustainable change. (See Exhibit 1.)
Some common questions at the start of a transformation
Why are we doing this? Do we need to become more responsive to rapidly shifting customer needs? Does our productivity need a step-change improvement? Is our ability to innovate lagging?
What should we do? The scope of digital transformations varies widely, from focusing on people (for example, agile at scale) to overhauling technology and infrastructure, replacing legacy IT platforms, and moving to the cloud. Many companies focus on specific business outcomes, such as personalization and digital marketing, end-to-end customer journeys, digital supply chains, and digital shared services.
How do we implement the transformation? There are many questions around leadership, governance, resourcing, focus, approach ( such as using pilots, incubators, or lighthouses), and sequencing. How do we make sure that product, channel, and support functions work in unison with the technology function, and how do we get the middle management on board?
Essential Factors for the Success of Digital Transformation:
- An Integrated Strategy with Clear Transformation Goals.
Having an integrated strategy with clear goals would go a long way in Digital Transformation. However, only 40% of companies have successfully created an integrated strategy.
An integrated strategy is one that has clear goals and is focused on the transformation of the business. Creating a clear vision for the business and aligning it with the market is key to creating an integrated strategy. The integration of the strategy and vision is also important. When a company has a clear vision and is focused on the transformation of the business, the integration of the strategy and vision becomes much easier.
Readiness Checklist –
- Do you have a clear aspiration that links to competitive advantage and value creation?
- Is the success of the digital transformation critical to achieving your overall business goals?
- Is the leadership aligned on what it will take to effect the change required in behavior and skills across the organization?
- Does the business roadmap create transparency around prioritized activities, deliverables, timelines, financial, and people resources, and a dynamic process to govern?
- Are you focused on a small number of discrete and prioritized use cases with clear outcomes and committed, accountable business owners?
- Have the tech and data platform requirements been determined based on the specifics of the strategy and business needs?
- The Commitment of all stakeholders from the CEO through Middle Management.
To run a successful digital transformation, it is necessary to involve all stakeholders in the process. Most people understand the importance of commitment by the CEO and other top executives to large-scale change. Companies must also involve the relevant middle managers in the planning and execution of the transformation program to make sure they buy into the goals and strategy. The challenge for companies is to ensure that the entire company is aware of the transformation and feels invested in the change.
Companies also need to recognize the threats to people’s careers that transformations can represent. Automation, bionic processes, and new ways of working mean job losses, especially if retraining and upskilling programs can’t compensate. Middle managers feel particularly vulnerable.
Readiness Checklist –
- Do the CEO and key executives have a high-profile role in communicating the importance of the transformation?
- Are executives consistently supporting the transformation leadership to address and resolve issues?
- Is the senior leadership participating infrequent, forensic reviews of progress?
- Have key middle managers been involved in developing the objectives, business cases, and transformation approach?
- Are middle managers conveying the most important communication messages to their teams?
- Are mentoring and feedback provided to middle managers to empower them to lead change?
- Is there an action plan to reward champions and sideline blockers?
- Are middle managers’ performance objectives linked to the transformation’s success?
- Deploying Talent with High-Caliber
Often, monitoring progress is regarded as a simple matter of good corporate hygiene. Progress is critical to any transformation project. It’s the key factor that determines whether or not the project is successful, but most organizations have many challenges when it comes to managing and monitoring progress. Measuring success adequately includes:
- Creating a clear mandate and accountability to monitor progress and tackle roadblocks and challenges.
- Defining detailed operational or financial metrics linked to strategic intent.
- Tracking outcomes regularly at both program and initiative levels.
- Maintaining a single source of truth on data.
Readiness Checklist –
- Have you defined a simple, clear set of critical metrics, tied to strategic intent and business outcomes, with an understanding of underlying operational drivers?
- Is your transformation management office trusted, with an activist mandate to challenge leaders, track progress, and hold people accountable for delivery performance?
- Do you have clear accountabilities for the targets?
- Do you have a trusted source of operational and financial data, enabling resolutions of issues such as baselines, net versus gross benefits, and double counting?
- Business-Led Modular Technology and Data Platform.
Business-led modular technology and data platforms are essential to the digital transformation journey. When a company builds technology and data platforms around the business, it enables them to evolve and scale quickly with minimal disruption. They are also able to easily customize, iterate, and adjust to meet the ever-changing needs of their customers. The goal of a business-led modular technology platform is to take advantage of technological advancements and avoid the inevitable growing pains that come with the adoption of new technologies.
Many CIOs reinforce that the technology and data platforms must be designed around business priorities and must be flexible, easy to maintain, and scalable. Furthermore, they continuously learn and deliver.
Readiness Checklist –
- Are the proposed technology changes tightly aligned with the overall business objectives?
- Have you integrated product and process simplification, and organizational changes, into the designs of the new technology platforms?
- Is the architecture flexible, scalable, and ready to support the use cases in the transformation roadmap?
- Does the architecture build in flexibility for future use cases?
- Do you have an approach to modernizing or replacing legacy platforms?
- Are you investing in tools and people for agile delivery through a DevOps environment?
- Does your business-IT operating model support agile delivery?
- Are you migrating toward a modular, microservices architecture?
- Does the architecture support easy integration with third-party ecosystems?
- Do you have well-managed data that meet future business requirements?
- Are you investing in modern tools and platforms (e.g., cloud, data lake, visualization, data governance)?
- Have conscious choices been made between commercial off-the-shelf software vs. customization?
Across industries, organizations are accelerating digital transformation processes for long-term growth and profitability. Successful digital transformation can be hard. It takes a lot of work, planning, and dedication. But there are a few key elements you can always rely on to keep you on the right path.
At Massivue, We believe that it’s about leading with a digital strategy that puts your business in the best possible position to innovate and grow. Our proven digital innovation solutions and product delivery frameworks have helped clients from different industries to fast track their digital transformation. We invite you to speak to our digital transformation experts for a no-obligation discussion as to how you can accelerate your digital journey.