Creating Your Digital Transformation Game Plan
Feb 18, 2021
The benefits of a successful digital transformation cannot be understated. Here are some recent statistics as narrated by Deloitte’s 2020 digital transformation survey:
- When Guardian life migrated its applications to the cloud in 2018, the costs associated with running its application suite decreased by up to 30 percent.
- When Chipotle streamlined its online order process via its mobile app, the company experienced a 100 percent increase in digital sales, which accounted for over 18 percent of total sales.
- A major apparel company was able to integrate its mobile app with its in-store shopping experience, allowing it to achieve its highest customer satisfaction rating in 25 years.
Digital transformation is very attractive for companies across every industry, but it’s also multidimensional. There’s often no clear guidepost telling you where to begin your digital transformation in order to achieve best results.
Outline a Digital Transformation Plan
If you want to complete a successful digital transformation, you need to define your goals at the beginning of the process—and you need to recognize that these things take time. The research from McKinsey above says that smaller companies (with less than 100 employees) are much more likely to succeed at digital transformation than larger ones. This suggests that if you are a larger organization, your best chance of success is to transform on a department-by-department basis as opposed to attempting to transition your whole organization at once.
Our research suggests that digital transformation, to have the best chance of succeeding, should proceed along the following timeline:
1. Identify objectives
2. Create a strategy
3. Choose technology enablers
4. Train staff
5. Identify and measure key metrics
6. Budget for transformation
7. Take a phased approach
8. Integrate feedback
Let’s break this process down step-by-step and understand why it works.
Identify Digital Transformation Objectives and Choose a Strategy
Starting at the beginning, it is important to tie your digital transformation to a measurable business outcome. In short, the right way to go about digital transformation is to pick a goal such as increasing revenue, improving customer satisfaction, or reducing costs. The wrong way to go about a digital transformation is to choose to go through the process for its own sake. Picking a concrete objective means that you are 1.7 times more likely to meet or exceed your goals.
In addition to choosing your objective, you also need to figure out a way to get there. Digital transformation can get extremely granular. Say that you intend to effect a digital transformation by moving your applications to the cloud. Will you do this via lift-and-shift, or will you refactor your applications first? Will you designate in-house personnel to undertake the migration, or will you hire a vendor? Which cloud hosting company will you choose?
Choosing a strategy to achieve your objective is vital, because it allows you to turn what was once wishful thinking into a measurable process. What comes next?
Enable, Staff, and Measure the Digital Transformation
Technological adoption is the core behind the idea of digital transformation—but any new technology needs people to use and administrate it.
What kind of technology will fit your organization? That’s one question you need to answer. Digital transformation is usually enabled by a suite of technologies that include AI, analytics, Internet of Things, customer intelligence, and more. You need to choose a technology that’s a fit for your objective—but you also need to find personnel that are a fit for your chosen technology.
Companies have the best chance at digital transformation when it’s driven from the top down. In short, if you’re choosing to enable your transformation with AI, then you need to find leadership that are skilled with that technology. Only then can you start training your workforce at large. Your most important task is to begin creating a digital culture that’s not only fluent in your enabling technology but can also adapt to future technological disruptions down the line.
Lastly, you began to identify key metrics in terms of achieving your digital transformation back in step two. Now is the time to begin measuring them.
There are a few things to measure in terms of digital transformation. First, you began identifying project phases—so your next step is to understand whether you’re completing them on time and on budget. You also want to measure the affect of your digital transformation. If you set a goal of increasing your revenue, for instance, you will want to understand how your revenue is changing and how that can be attributed (or not) to your digital transformation efforts.
Digital Transformation Doesn’t Happen All at Once
Finally, digital transformation is a phased process that requires time and money—it does not happen overnight. With support from your executives, you need to say that “for the next X quarters, our priority will be digitally transforming department Y.”
In short, you need to pick one area of your company to transform, fund that transformation with budget dollars, and commit to that transformation for a set period of time, during which other initiatives are put on the back burner. Once completed, you can more onto the next business unit, incorporating the lessons that you learned from the previous transformation.
At Verndale, we specialize in helping customers along their journey towards digital transformation, specifically within the realm of customer experience. By transforming the enterprise in ways that create the best digital experience for consumers, brands can radically increase their revenue, improve customer satisfaction, and reduce churn. For more information, contact Verndale today.
Executive's Guide to Managing Change with Digital Transformation
Apr 03, 2017
Why Digital Transformation Fails
Sep 01, 2016 | Chris Pisapia, Chief Executive Officer