6 ingredients for a successful digital transformation program

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To succeed at digital transformation is no small feat in 'normal' times. To succeed during COVID-19 is certainly impressive. So, what are the lessons we can learn to increase our odds of a successful transformation program? Here are 6 ingredients.

Written by: James Milsom, Senior Marketing Manager

 

No matter your role, the topic of digital transformation is one that has become table stakes for organizations seeking to outperform their competition.

This fate has been so since the early 1990s when computing technology became more widespread, as we began the process of digitizing endless amounts of paper-based information into a digital format.

The benefits were clear – easier access to information, instant communication through email and messaging platforms – all of which was spearheaded by the dot com boom. Businesses knew that the future was digital, and set course appropriately.

Today, however, digitalization of our entire businesses is almost expected. But what are the ingredients to achieving a successful digital transformation program?

Here are 6 ingredients that we recommend for embracing the change, tied into the importance of strategic agility, execution rigor and, crucially, culture. Unsurprisingly, it all comes down to combining these different ingredients – no one factor is more important than taking a wholesome approach.


Recap: What does digital transformation mean?

Much has been written about digital transformation in business media, however, framing this conversation around success must begin with clarity of definition.

At its core, CIO explains:

“Digital transformation is a foundational change in how an organization delivers value to its customers.

Digital transformation marks a radical rethinking of how an organization uses technology, people and processes to fundamentally change business performance.

Such sweeping changes are typically undertaken in pursuit of new business models and new revenue streams, driven by changes in customer expectations around products and services.”

CIO, What is digital transformation? A necessary disruption, 2020

 

Reflecting upon the definition provided, we can identify several themes:

  • Delivering value to customers
  • Change
  • Voice of the Customer
  • Revenue generation
  • Technology

  

What is recurring is the role of disruption.

Disruption from the customer in driving the importance of digital transformation, to the market hearing these calls and the value it brings (better customer expectations and revenue generation for the business).

A program of activity centered around digital transformation is a tremendous undertaking for a business of any size.

And, for this reason, the nature of a digital transformation is wide-ranging.

The focus of your transformation program could be around hybrid working, cloud, and on-premise data management, or more futuristic ambitions of digital assistants, driverless cars and insurance.

No industry is exempt from transformation.

Whether it is the classic example of Netflix and Blockbuster, or more recently in the UK, for example, with disruptive, digital-only brand Boohoo buying high-street giant Debenhams, transformation is everywhere we see.

And, going further, we can see that confusion exists deeper. Digitalization and digitization, for example, are two elements of the transformation package, but conflation is frequent.

Digitization is turning data and processes from analog to digital. Digitalization embraces using those data and processes to make better business decisions.

 

How has COVID altered the transformation trajectory?

Over history, we have witnessed watershed moments where transformation has shone through.

Whether it was Watt’s steam engine in 1769 expediting the transportation of goods, Arkwright ushering in the modern factory in 1771, Bell’s telephone in the late 1800s, post-world war two manufacturing marvels, or the dot com boom – change is a staple in our world.

However, there is no denying the impact that COVID-19 has had upon the trajectory of digital transformation. The last 18 months have seen many changes that have taken the progression into overdrive, including:

  • Home schooling via Zoom and Teams
  • Hybrid working arrangements for employees across office, home and public spaces, spurring the need for better broadband and, in some instances, property developers creating coworking spaces
  • Digital platforms – e.g. Netlfix’s soaring 16 million subscriptions
  • Content overload – we have more time to make informed decisions on what we buy based on more content available in a digital form

And the consequence is that our expectations, as consumers, have drastically changed – and changed for the better.

 

The imperative to transform

PMOs are being faced with the need to deliver digital transformation alongside a lineup of other transformation programs, including ESG and sustainability goals, cost reduction efforts, and driving revenue.

We are now in a state of digital-first expectations, meaning that businesses must migrate to where their customers are both literally, online, and figuratively (using technology to better serve them).

In 2020, BCG surveyed business leaders around the topic of transformation, reporting:

  • 90% of companies list customer-facing initiatives as their top goals
  • 80% of leaders feel that digital transformation has come more urgent
  • 80% of transformation efforts are self-funded by the business’ revenue or cost-saving exercises
  • 71% of programs are monitored by the c-suite on a quarterly basis

 

It shows that leaders are acutely aware of the growing importance of digital transformation, spurred on by COVID-19.

This era has thrust the customer truly into the epicenter of business models, and such a change means that businesses must have the leadership engagement and end-to-end support of the organization to help the PMO achieve their transformation programs.

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6 ingredients for achieving digital transformation

Digital transformation has shown itself to be a necessity in our organizations, so the question turns to what it takes to be successful. Here are 6 ingredients to being successful in your transformation efforts.


1. A clear strategy and mandate for change

We begin with two crucial ingredients for transformation.

Firstly, your strategy is what will help your transformation more than any amount of budget or goodwill.

But your digital transformation strategy does not sit in a silo, left to run without complimenting your full portfolio of strategic initiatives:
 

“Owing to [a] wide scope and [its] far-reaching consequences, digital transformation strategies seek to coordinate and prioritize the many independent threads of digital transformation. To account for their company-spanning characteristics, digital transformation strategies cut across other business strategies and should be aligned with them.”

Matt, Hess and Benlian, Digital Transformation Strategies, 2015 


This means working collaboratively with senior management in commercial teams, finance, human resources, etc. The strategy you set out will look to compliment the product road map, for example, because a digital transformation program will significantly impact the processes, technologies, and outcomes of these teams.

And to align your digital transformation strategy to the other arms of the business will require their mandate. Indeed, c-suite buy-in is important, but the transformation efforts will directly impact these areas. Therefore, look to explain:

  • The technologies involved
  • How value will be created, tracked, and realized
  • Structural changes to teams and processes
  • The costs involved (an initial outlay, revenue, the total cost of ownership etc.)

 
The means by which you go about the above are an internal decision. However, making use of stakeholder mapping, kaizen events, and participatory techniques such as catchball are all effective tools to consider.

 

2. The cultural fit

Culture is the second ingredient that is paramount to digital transformation.

There is a tremendous amount of risk and trial and error associated with any strategy, and perhaps none is more so visible than digital transformation.

While a merger and acquisition strategy can take considerable time to surface, the same cannot be said of digital change.

The effort involved in the transformation is great, involving many stakeholders across the entire business, and as such, there must be a shared appreciation of the challenges:

“With digital transformation, it’s vital to create a culture where everyone is tech savvy and where risk is everyone’s business. Senior leaders can communicate that message on a consistent basis. A strong culture aligned to business strategy drives an organization’s ability to accelerate performance and outpace competitors, especially in this digital era.”

Deloitte, The Role of Culture in Digital Transformation, 2019

 

When it comes to creating that transformation-positive culture, there is no one-size-fits-all approach, but you can use as a checklist such as the below to identify and rate the strength and impact of these factors:

  • Openness towards change
  • Tolerance to failure
  • Willingness to learn
  • Encouragement of participation
  • Shared rewards for success
  • Entrepreneurship
  • Transparency
  • Communication
  • Cooperation
  • Trust
  • Customer centricity
  • Agility

 
Where your culture supports change, controlled risk-taking, and cooperation, the transformation will find a place where it can grow and succeed.

 

3. Rigorous execution

As we move into the execution of your transformation strategy, it pays to remember the common failings of strategic initiatives revolve around the themes of communication, participation, and consistency.

The latter is the most concerning and the first two will be addressed with your strategy setting and cultural assessment.

However, consistency speaks to the rigor and regularity of executing, tracking, and reviewing your performance. It means embracing all that digital transformation is about – using data and technology to make better decisions.

But better decisions are not self-created. They come from introducing processes, systems and involving people who care and are engaged with the strategy.

Whether it is daily inputs of metrics, weekly reviews of leading indicators and monthly for lagging, there is a lot to be said about defining your plan and sticking to it when it comes to execution.

 

4. Proving successes and learning from failures

Taking your digital transformation further down the conveyor belt of Strategy Execution Management, your next step is to look at how you prove success and learn from failures.

Your endeavors will be littered with wins, but equally, you will encounter stumbling blocks that set you back. Fear not, this is perfectly natural. After all, to never fail is to never try.

Inherent in digital transformation is the digitization of your data, and naturally the digitalization of this information. Therefore, with rigor a core characteristic of your transformation initiative, it only makes sense to have data entry, reporting, and internal communications to keep the business updated.

Has your timeline slipped? Do you have a standout member of your team, or a team for that fact, which deserves recognition? Are you able to report to the c-suite about the benefits you have already realized along the transformation journey? How are markets reacting?

These are all questions you should look to answer, and, equally, should you have cases where you have missed your targets, you set about investigating root causes and correcting (not punishing) this.

 

5. People

Earlier we spoke of the importance of culture. Culture cannot exist without organizational norms which dictate the personal and professional qualities which are complimentary of the business.

People are at the core of transformation, for better or for worse. For better, because it opens opportunities to try new approaches and speaks to our instinctive desire to explore and innovate. For worse, because risk-averse people will shy away from something as radical as digital transformation.

Internally, your efforts can revolve around setting out ways to involve and reward your staff – be that career progression, monetary, or something completely personal, such as extra leave.

Externally, this is your chance to introduce people into your organization who have either completed a digital transformation journey before or those that are eager to help businesses change because of their own preference.

In either case, people are paramount to succeeding with digital transformation. Treat them as you do your customer, and the results will speak for themselves.

 

6. Technology

The last ingredient is technology.

Digital transformation will inevitably involve new technologies – whether it is updating your IT infrastructure to gigabit-capable broadband or introducing new software to compliment your efforts.

There is a world of technologies that are available to your organization. Some are more suitable for your industry or company size, others have become must-haves to how we go about work in the 2020s, such as Zoom, Slack, or Teams.

Here are some examples of technology to consider:

  Strategic Sales & Marketing Product Customer Success Finance and Accounting
Functional Workbench HubSpot Atlassian ZenDesk Xero
Productivity Pulse PipeDrive Trello TImely Todoist
Comms Slack Teams Zoom Slack Zoom 

 

In regards to your strategy, when seeking the rigor and regularity required for effective Strategy Execution Management, solutions such as i-nexus are best suited to offer a centralized, unified platform for your efforts.

i-nexus Workbench, for instance, will enable your project management teams and supporting staff to contribute to executing and tracking your efforts, and give you a simple view of resource requirements (human and capital), to identify and mitigate risk along the way.

 

What are analysts predicting?

As you can imagine, the world of digital transformation is ever-changing, especially with the advent of COVID-19.

However, Forrester, Google, PwC, and Gartner are indicating higher acceleration amidst a more demanding customer base:

  • Digital customer service interactions will increase by 40% - Forrester
  • 43% of B2C buyers are planning to spend less of their income - PwC
  • 66% of B2B buyers are now willing to spend more – Google
  • 91% of organizations are engaged in a digital initiative - Gartner

What is emerging is that COVID-19 has given the power back to consumers – and this power dictates that consumers want to have seamless buying experiences spurred on by technology.

Meeting that demand now and in the future is reliant upon a successful digital transformation program.

There are more options available in terms of products and information, and those organizations that are not meeting the new expectations will fall short.

 

Making a success of digital transformation

The 6 ingredients listed in this blog are by no means exhaustive.

However, they offer a path to success. Rightly so, it all begins with your strategy and a mandate for change. But what follows is a logical sequence – culture, people, technologies – all factors which will determine your fate.

Ultimately, there is no paint by numbers available here. Success is an iterative process, but one where commitment and learning will help your digital strategy meet its ultimate destination – realized transformation.

 

Learn more about Strategy Execution Management

Take the next steps in your transformation journey by exploring our Strategy Execution Management resource hub or any of the below:

 

About the author

James Milsom is Senior Marketing Manager at i-nexus. James has wide-ranging experience in markets such as telecommunications, energy, education, and software.

As Senior Marketing Manager, his drive is to raise awareness and understanding of the challenges facing enterprises in delivering strategic objectives and transformation amidst changing markets and the obstacles traditional tools and methods present leaders.

If you’d like to talk more about Strategy Execution, reach out to James on james.milsom@i-nexus.com or connect with him on LinkedIn for the latest insights.

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