The case for digital transformation is clear. But too often, companies start with the nitty-gritty technological aspect of a digital transformation. They search for individual technological solutions to specific technical problems. But to execute a successful digital transformation, one that will adapt as circumstances change, companies must first start with a broader view.
Here are the steps companies should take to lay the groundwork for a successful digital transformation.
1. Craft Your Business Strategy
In order to build a digital transformation that will last for the long run, a company must have a clear understanding of its business strategy. A business strategy encompasses a variety of components, from overall company vision, to specific operational tactics. This framework allows teams to build a digital transformation around the company’s short-term and long-term objectives, rather than around technical issues that simply arise during the course of current operations.
Consider this example. If a law firm adopts a document digitization solution, the new technology eliminates inefficient, manual document analysis. However, this does not achieve the company’s overall strategic objective of creating a superior client experience. Clients want an efficient customer experience in the aggregate, not merely for document processing. Document digitization is helpful, but by failing to link it to a wider strategic goal, the optimization offers only an isolated improvement.
Developing a business strategy is a multi-pronged process, involving stakeholders across the organization. By answering key business strategy questions, teams can crystalize the objectives of a digital transformation:
- What are our company’s goals, quarterly, yearly, and beyond?
- What is our current business model? How do we intend for it to change?
- What is our product, and where is it headed in the future?
- How does our company plan to grow in the coming years?
- How do we want to interact with our customers? What channels will we use?
- What could disrupt our company, technologically or otherwise?
- What do we want our customer experience to be like?
- What are the company’s opportunities, now and in the future?
These are just some of the high-level business strategy questions companies should consider before crafting a digital transformation.
2. Define Operational Objectives
After crafting a business strategy, translate those prerogatives into operational objectives for your digital transformation. Again, this is not the same as choosing technologies. Rather, this is defining the impact digital transformation will have on your business. Consider some examples below:
- Improve the customer experience – Many companies make the customer experience a top priority in a digital transformation. This can represent a variety of initiatives, from building a mobile-first customer journey, to merging in-store and online shopping, to digitizing support channels, to reducing customer wait time, to creating intuitive interfaces, and much more. These improvements not only fulfill the expectations of today’s buyers, but also increase efficiency and profitability.
- Reimagine business models – Digital transformation enables companies to reimagine their business models. Take advantage of new delivery methods, more customer touch points, less purchase friction, more business unification, and more data-driven decision-making. Netflix is a well-known example of a business model reimagined by digital transformation.
- Cut costs – For most companies, digital transformation offers an opportunity to cut costs by eliminating inefficient processes and infrastructure. Automate rote tasks, from new registrations, to basic customer service, to cleansing raw data, and free up to 80% of your data team’s time. Build digital-first, cloud-based infrastructures to bypass expensive, maintenance-heavy on-premise hardware.
- Enhance worker productivity – Through digital transformation, companies can empower their workers to be more productive. With new apps, systems, and processes, workers can become more efficient, impactful, and informed. Digital transformation also opens the doors for more worker collaboration, through digital workspaces and environments.
These, of course, are just a few of the possible operational objectives for a digital transformation. Each company will have different priorities. By identifying the operational objectives upfront, a company can work toward the end goals of the digital transformation, rather than on isolated issues.
The Next Step: The Nuts-and-Bolts of the Digital Transformation
After defining a business strategy and operational objectives, a company must implement the nuts-and-bolts of a digital transformation. This includes building out the data operation, new technologies, and business processes that will power the digital transformation.
Find out how to do all of this in our latest eBook – Digital Transformation: 6 Steps for Success at Data-Driven Companies.
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