Most businesses understand that digital transformation is no longer a buzzword but a business imperative. For some, the digital transformation journey has already begun but, for most, the path to a successful transformation remains murky at best.
For business leaders who either aren’t already on a digital transformation journey or haven’t begun to plan for a journey the message is clear: you’d better get a move on or risk being outpaced by competitors. This should be a clear directive with support from the board. In fact, boards should be demanding to know the strategic approach and status of the company’s digital transformation plans.
While the need to transform is clear, for leadership and staff, transformation requires hard work, significant investment over many years, and a strategic approach to risk mitigation. Four key ingredients are needed for a successful digital transformation:
1. Start with a clear understanding
It’s essential to understand exactly what the business needs to achieve and why. Different businesses will have unique goals, whether it’s about better engagement with customers or a more streamlined fulfilment process. Whatever the goals are, they must be driven by strategy. This could be driving incremental growth, defending against potential disruptors, or driving entirely new revenue streams through innovative products and services.
The best way to approach this is to create a set of key performance indicators (KPIs) to be achieved over a defined timeframe. The more specific and achievable the goals are, the more motivated teams will be to achieve them.
2. Get through the roadblocks
Various roadblocks will inevitably appear in a digital transformation journey. For example, some boards are concerned about cybersecurity, and with good reason. However, concerns around data security can’t stand in the way of a digital journey. Businesses simply need to understand the risks and take appropriate measures to mitigate them.
When it comes to collecting data, while some customers remain shy, others willingly share personal information in exchange for an individualised experience. Businesses need to work within legal frameworks and platforms to collaborate and share data in a new ‘data sharing economy’ that brings opportunities to both customers and businesses. Communicating the value of those opportunities is the key to overcoming any related roadblocks.
3. Be bold, fail fast, learn, and iterate
Businesses should create a plan that breaks down the journey into winnable, achievable chunks that can demonstrate the value of the program and build confidence. This will help gain organisational and board confidence and buy-in, building momentum and sustaining funding over the life of the project.
When choosing technology to power the transformation, businesses should incrementally deploy, trial, test, and fine-tune products in an agile approach to avoid wasting time on initiatives that won’t work.
4. Create partnerships and collaborate strategically
Digital transformation requires a diverse set of skills and the ability to leverage new and emerging approaches and technologies. Access to the right talent, without taking on the risk of hiring a whole new team internally, requires businesses to collaborate with the right partners.
This can include risk-sharing through revenue-sharing or cost out gains share, as well as simply gaining access to a broader set of skills outside the company. Partnering effectively can also provide access to third-party data that can enrich the company’s internal data. This should drive new and interesting insights that can transform sales or servicing processes.
These four ingredients may seem obvious but getting them right is the linchpin to successful transformation. The time spent considering these ingredients upfront will pay off when the transformation project runs smoothly and delivers the desired and anticipated objectives.
Peter Spicer, CTO, RoZetta Technology