Investing in digital transformation is no doubt the right course of action for most organizations. Still, many have struggled to achieve the desired results despite pursuing large-scale digital transformation efforts, with a statistical survey estimating a failure rate of about 70 percent. To some extent, this rate is not entirely surprising.
Many companies think investing thousands of dollars in the latest technology tools is enough to achieve full-scale digital transformation and this is where most organizations go wrong. Every digital transformation strategy needs to begin with an important question, which is “why?”.
Analyzing what digital transformation can do for your company and establishing why it is needed is the first and most important step to take before proceeding on a digital transformation drive.
Analyzing why your organization needs digital transformation
Most leaders have an “implement first, ask questions later” mentality. Digital transformation should not lead with technology, however, and the “why” behind such an endeavor should be discussed first before anything else.
Implementing the best technology will be a mere waste of time if you fail to put the right process, culture and talent in place to take advantage of it. Take a close look at your company’s goals for the next five to 10 years and analyze how digital transformation can accelerate the journey toward achieving them.
For instance, if you run a manufacturing company, your goal might be to deliver high-quality products through high engineering excellence. With that vision in mind, you can proceed to establish the use cases that will require a digital intervention to achieve this faster.
Following this approach will help you develop a compelling digital transformation plan and determine if it has business value for your organization or not. Another benefit of this approach is that it helps you identify areas where a cultural shift might be necessary for successful digital transformation.
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Must-ask questions before considering digital transformation
For most organizations, adopting digital transformation is a matter of time but before making such a major decision there are some basic questions you need to have an answer for.
Why do we need transformation?
Identify the specific problems you want to solve with digital transformation and establish the goals of such a venture. This increases your chances of success and also helps determine how the outcome of such an initiative will be measured.
How will it impact my business?
Everyone likes to think that digital transformation will impact their business in a significant and positive way. How big of an impact will it really have?
It is not about buying new software or a digital technology suite. Digital transformation often results in top-to-bottom changes to your entire organization and everyone must be on board with such changes for it to work.
In which technologies should we invest?
The rush to transform their business digitally often leads companies to jump on technological bandwagons just to feel like they are doing things right. Every business has different needs, however, and not every technology product will work for you. You have to find one that will be the most beneficial for your business.
Can we do it alone or do we need partners?
Most times, digital transformation goes beyond buying a new software suite for your company. You may need to look at partnering in the long term with external parties that will guide you through the process. You need to determine the way these partners will be assessed and pick the right one for you.
Get started on digital transformation by identifying areas to digitize
To get started with your digital transformation initiative, you should take an inventory of your current resources, software systems and processes. Work with the various departments to assess the digital processes that you currently have in place and how they all fit in together.
In most cases, digital transformation simply involves figuring out a way to connect siloed data and integrate processes into a better-optimized framework. Some of the steps include the following.
1. Identify gaps and find ways to align goals
By the time your inventory is complete, you should have a comprehensive overview of what is working and what is not. This will help identify processes that need to be optimized and streamlined by becoming digital. A simple trick is to identify labor- or time-intensive processes.
Areas with high customer visibility and impact are also candidates for a digital upgrade. You can also take a look at competitors to see where they are implementing digital processes and their shift in return of investment (ROI) as a result.
2. Get ready for cultural change
Digital transformation must be accompanied by a cultural shift for it to be successful. It is easy to pay for technology but this is aspect of your digital transformation efforts cannot be bought.
The first step is to make sure everyone is involved, starting from top management staff to the employees that will be directly impacted.
3. Start small and keep it simple
While the ultimate goal of digital transformation might be an enterprise-wide adoption, it is okay to start small. Trying to create a major shift suddenly might lead to resistance from your staff and lead to errors.
It is best to start making changes incrementally as you assess progress.
4. Measure outcomes and recalibrate
This is one of the major reasons why starting with a “Why” is important. Based on the established goals, you can easily measure outcomes and review processes if necessary. Be sure to check in regularly to see if the goals are being met and address the challenges that are delaying progress.
Key elements to note while evaluating and selecting the right tools
When you have understood all the other aspects of your digital transformation effort, you can now start thinking about the technology you can deploy to achieve your goals. There are some elements to note when evaluating tools for digitizing processes that include the following.
Start with your goals and not the technology
There are several digital tools available on the market that offer many features and picking the right tool based on their functionalities can be very difficult.
An effective approach is to establish your own needs first to be able to pick a software product that has the features to best meet these needs.
Simple code-free software
Citizen developers are your most valuable asset in your digital transformation efforts. They are regular employees empowered to build and deploy the digital solutions they need to solve business problems.
Citizen developers use no-code or low-code platforms to build software solutions. This is a less expensive and more sustainable approach to digital transformation than trying to build custom-coded tools.
Integration is important
Tools that integrate seamlessly with the ones you already use are easier to deploy. This will save you from deploying dozens of solutions across your enterprise.
Easy integration also makes it easy to expand the functionality of the technology suit you are using.
Some technology products become too expensive as you require more functions, while others cannot keep up with increased workflow. Be sure to consider how your organization will evolve and grow in the coming years and choose a tool that can grow with your needs.
Organizations across all industries are trying to better understand digital transformation and how they can use it to modernize their operations. While this trend surely holds a lot of promise, IT decision-makers should avoid investing in digital technology just for the sake of it.
There should be a greater focus on the “why” and “how” of such a venture. This is necessary to ensure the sustainability and effectiveness of your digital transformation efforts.