There’s a reason digital transformation remains one of the most hotly debated topics in the business world today — it’s not easy, and most companies fail. Any company that thinks it’s uncovered the secret formula is likely to find itself among the disappointed, but it doesn’t have to be that way.
For all the business talk around digital transformation, you’d be forgiven for believing it’s a simple process. Unfortunately, the reality is precisely the opposite. Nearly 70% of companies that attempt digital transformation don’t achieve their desired ROI. In a world where it’s so urgently needed, there’s no simple solution for making the transition easier. However, a few essential practices are fundamental to an organization’s ability to realize success.
It’s essential to align business goals and stakeholders to give digital transformation any chance of success. I’ve found it’s helpful to think of a successful digital transformation as a three-legged stool. It stands on its own but will fall if you remove even one of its legs.
Aligning With Stakeholders
If only a successful digital transformation were as simple as the IT department updating a few legacy apps and calling it a day. However, to make a digital transformation work, you need to get the entire team on board. In other words, you need to align the desired outcome with stakeholder expectations.
This isn’t an easy step, but it is crucial. People’s natural tendency is to stay in their silos, attending only to the details relevant to their workgroup. Reversing this trend is tricky, but the digital transformation leader’s role is to be the tip of the spear, bringing the critical stakeholders together — early and often — to work toward innovative solutions.
It’s also crucial to keep stakeholders tied in because, in a business, the checkbook drives most operations. Digital transformations can be costly, and all stakeholders need to be on the same page to reach a consensus regarding capital expenditures. These goals can only be achieved through transparent, open communication.
Coordinating Technology Teams
Since the ramifications of redesigning a company’s digital operations can be so consequential, the technology team should take ownership of their vital role in the process from the outset. Understanding the scope of their work and what impacts it will have on business outcomes is crucial. Stakeholder alignment can help achieve this, but it’s incumbent on the tech team to both drive alignment and be the glue that holds everything together.
A few of the critical roles tech teams play include project management, risk management, and clearly communicating interdependencies. For example, project management serves a critical function when an enterprise decides to integrate digital technologies into all of its operations.
Digitalization is itself a project management undertaking. However, it’s important to remember that it will affect other projects throughout the organization by introducing new collaboration tools, increasing automated tasks for greater efficiency, and providing more meaningful metrics for decision-making. Understanding, navigating, and communicating these effects are key components of ensuring everyone remains on the same page.
There is also an impact on managing risks. Digitalization, as mentioned above, will yield more and better data for the company. However, the tech team needs to understand how their changes may also bring increased risk to the organization — particularly from a cybersecurity perspective — and it needs to have a plan in place from the beginning to mitigate those risks. Instead of patching vulnerabilities as an afterthought, the entire process needs to be designed in conjunction with cybersecurity concerns. But, again, that job falls to the technology team.
Finally, the tech team needs to be the bridge that communicates interdependencies between stakeholders. We can encourage direct collaboration, but people often drift back to their silos. If one aspect of the plan for digitizing HR platforms will negatively impact the way accounting does its job, those relationships need to be captured and mitigated. The complex inter dynamics between teams must be caught early and built into the planning and execution.
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Calibrating with Clients
At all digital transformation steps, feedback from clients should be solicited and considered. If it’s not already present, the tech team should take the lead in developing processes for clients to communicate their needs and provide feedback.
One best practice is for organizations to consider a Customer Advisory Board (CAB) that could help them better elicit feedback and improve client experience, although care needs to be taken to make it worth everyone’s time and energy. Short of a CAB, establishing processes for gleaning insights from current clients is essential for digital transformation initiatives to succeed. After all, if the new way of doing business doesn’t work for the client, what’s the point?
The benefits of direct feedback aren’t limited to existing clients. In fact, the insights one can gain by listening to the needs of new and potential clients can often lead directly to providing innovative solutions for existing clients before they even ask. Soliciting feedback whenever and wherever possible is a crucial component of anticipating your clients’ future needs and having solutions ready to deliver.
It’s Complicated, But It’s Possible
Digital transformation doesn’t have a simple solution. In most cases, it’s an almost complete overhaul of the way a company does business and could involve going against years of legacy practices that may not go down without a fight. However, these are struggles worth having in order to increase the chances of a successful digital transformation.
Ensuring alignment with stakeholders is the first step. Without the proper allocation of capital expenditures, any transformation is doomed to fail. Technology teams should also take ownership of their role and help facilitate communication between the stakeholders to adequately convey both the necessity for change and the business benefits digital transformation will provide. Finally, incorporating client feedback into every aspect of the project to anticipate and address their needs will help ensure a smooth transformative process from start to finish.
Digital transformation is a complex undertaking with a variety of pain points, but successful companies can achieve the best outcomes by following these essential practices to keep their teams moving toward the same goal.
