A digital transformation strategy goes beyond adopting new technology or upgrading IT systems. It outlines your organisation’s steps to leverage emerging technologies to achieve core business objectives. Think of it as a roadmap that explores where you are now, where you want to be and how you’ll get there. You can plan and implement in-house or use digital transformation consulting services to help.
A digital transformation strategy means reimagining how your organisation operates and how you reach your customers. It can impact all business areas and involve your people, processes and the technologies you use.
Some typical benefits of a digital transformation strategy are:
- Customer-led approach – focuses on the customer and how digital disruption could impact their behaviour.
- Improved customer journeys – implement an end-to-end approach to conceive and deliver each customer’s outcome.
- Data-driven insights – evidence-based insights to develop a sustainable business advantage.
- Drive growth – can drive growth by providing on-demand services, empowering employees, improving security and aiding faster decision-making.
- Increased agility – organisations may be able to react better to threats and exploit opportunities.
- Increased profitability – organisations leading with digital transformation may be able to drive increased revenue while reducing costs.
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How to build a digital transformation strategy
Many digital transformation projects don’t come to fruition without expert support, so it’s important to have experienced people on your team who understand the process.
According to a McKinsey report, almost 70% of digital transformation projects fail, while another report found that just 16% of business leaders say their digital transformations successfully improved performance.
However, following a few simple principles can reduce the risk of projects failing. The steps involved in building a successful digital transformation strategy include:
- Defining goals and vision
- Mapping out the technology you’ll need
- Defining the investment required
- Establishing ways of working
Need help? Our digital transformation consulting marketplace can help you find the right consultant to support your objectives.
1. Defining digital transformation goals
One of the biggest challenges of digital transformation is getting everyone inside an organisation to agree on the ‘why’ of doing it.
Start by setting a digital transformation strategy by identifying your business needs and goals.
The more specific and considered the goals and the benchmarks, the better your strategy’s chance of success. Consider your short and longer-term (5-10 year) business goals.
Commons goals for digital transformation include:
- Delivering better customer service
- Creating a competitive advantage
- Improving the experience of your employees
- Reducing costs
- Improving data security
Agree on frequent, consistent measurements to ensure that work is on track.
Set clear milestones and start with low-hanging fruit. Share the digital transformation roadmap with senior stakeholders and update them through detailed communications plans.
2. Put people at the heart of your digital transformation strategy
Digital transformation affects every part of a business, particularly employees.
People sit at the heart of any organisation and can resist change, so it’s worth investing time and energy to encourage them in the direction the organisation is heading.
Think about how you can positively drive cultural change.
Senior leaders’ support can help you sell the vision to the rest of the organisation. Consider building a team of organisational change champions. Pick employees with solid people skills who can encourage and tackle resistance. They can help you to create a culture that understands and is responsive to digital transformation throughout the organisation.
Every employee should understand why digital transformation is happening and what behaviour changes are needed to support the project’s success.
If budgets allow, consider hiring a Chief Digital Officer to coordinate the digital transformation. For smaller budgets, a digital transformation consultant can be a valuable addition to the programme – start your search with Portevo here.
You may also wish to review whether you need additional skills within your organisation. Are there gaps in digital skills and competencies? If so, how will you fill these? Are you hiring new people, or can you upskill existing staff as part of your transformation programme?
Read our guide on designing a customer experience (CX) strategy.
3. Lighthousing – smaller projects to prove digital transformation
Easy wins can set you on the path to digital transformation.
A helpful tactic is to deploy ‘lighthouse’ projects. A lighthouse project is a small-scale project that looks at the big-picture project and is the beacon for the future of digital transformation.
A lighthouse project is:
- Designed to be visible across an organisation
- Touches multiple areas and so can unlock resources for future projects
- Is a change agent that proves the concept of digitisation
- Has a hard deadline, so there is an incentive to break down barriers
Lighthouse projects have the potential to be popular with customers and, on average, can deliver cost savings of up to 40% and a five per cent increase in ROI.
Defining your lighthouse project early is helpful as it highlights new ways of working, including agile approaches.
An agile digital transformation roadmap aims to deliver progress over perfection. By using an agile methodology, organisations learn from each iteration and adapt to demands and needs, which reduces the risk of failure.
Using agile empowers organisations to start digital initiatives and learn from them.
4. Mapping out the technology you’ll need
Once you have outlined your business goals, you can create a strategic roadmap to help you achieve that vision.
You need a clear technology roadmap that outlines the technologies you currently have, as well as any digital transformation consulting support that might be required. This will ensure that your digital transformation initiative is successful.
It’s important to have a plan for how you’ll get from A to B. This may include new infrastructure, recruitment, tech stack updates or a switch to a more agile way of doing things. The roadmap should be adaptable and evolve with the changing priorities of the digital landscape.
Some of the established and emerging technologies you might want to consider are:
- artificial intelligence and machine learning
- cloud-based computing (including security requirements)
- data security tools, including 3D authentication
- mobile (including apps).
Read our guide to what to look for when choosing an e-commerce consultant.
5. Seek partnerships to deliver digital transformation
While driving digital transformation does require internal change, you may still need external partners to help guide and shape the transformation process to ensure its effectiveness.
Digital transformation consultants can help you accelerate digital transformation, but they don’t replace your Chief Digital Officer or your Chief Technology Officer. Instead, they serve as a trusted advisor with experience and expertise in strategy, technology, and change management.
A digital transformation consultant can help with:
- Pathfinding and identifying technology trends and developments
- Supporting platform development and deployment
- Identifying technologies to deploy and building a business case on implementation
- Developing a technology roadmap and critical adoption path
- Identifying and mitigating risks such as data processing and technology migration
There may be specialist roles where digital transformation consultancy can help, including project management, leadership, application support, knowledge transfer, data analytics and security.
Read our guide on hiring a management consultant.
How will you know if your digital transformation is successful?
Set out measures for success early on in your digital transformation journey, and know how you’ll measure yourself against those objectives.
You should look at internal and external measures of success.
For example, you may want to measure employee and customer satisfaction, cost savings and increased revenues. Other metrics will relate to the digital transformation process, such as establishing new ways of working and automating transactions and operations.
Need digital transformation consulting support? Learn more about Portevo’s innovative consulting marketplace that ensures you find the right consultant for your project.