Digital transformation has become the talk of the town. Over the last decade, organisations across the world have pushed towards digitisation – at first to share information, before moving on to relationship-building via social media and direct commerce.
Buyers have become more informed and savvy, and often have unfettered access to alternative sales channels, creating an increased need for companies to up their game – particularly those who didn’t start life in the digital space.
Indeed, a successful digital transformation has become essential for traditional incumbents to compete with young, digital disruptors, who are often cheaper and more nimble. So businesses scramble to deploy new technologies in the hope they’ll gain back their competitive advantage.
However, industry figures suggest that 9 out of 10 digital transformation projects fail – half, spectacularly so. Clearly, something is going wrong.
Using Ecosystm insights based on interactions with technology buyers from multiple industries, along with secondary research, I’ve come to the conclusion that any attempt at digital transformation should adhere to the following 10-step plan.
1. Know Your Purpose
Before embarking on any digital transformation project, ask yourself ‘why’?
Most cases are triggered in response to market changes, whether that’s changing customer demands or an evolving competitor landscape – and that’s not a bad place to start. However, it’s rarely enough to sustain a project, because that in itself is not a purpose so much as a knee-jerk reaction.
Purpose should be something that provides a tangible benefit to the organisation – for example, productivity gains, efficiencies or access to new markets and market segments.
2. Begin With Customer Needs
The best place to start defining your purpose is almost always related to customers or end-users. Disruption is everywhere, but it only takes place when players tap into a need among customers previously unmet. Businesses must therefore identify these needs, even if these needs are those of internal “customers” i.e. employees. These needs may change as you progress and you should be open to re-evaluating projects to keep pace.
3. Build A Business Case
The business case is essential for securing buy-in from senior management To convince them, you’ll need to be clear, concise and in line with the priorities and strategy of the organisation. You should clearly state objectives and anticipated results, as well as potential consequences of not implementing the project. A good business case should instil a sense of urgency.
4. Define Success
If your reasoning for digital transformation is well-founded, key success criteria should be relatively easy to define and closely-linked to your purpose. It’s also important to consider successes that relate to the implementation process itself, which can often be difficult and time-consuming. These criteria could include business satisfaction, team involvement and employee engagement or training. Make sure that all criteria measurable. That way, you can measure and share successes throughout implementation to maintain leadership support and demonstrate accountability.
5. Secure Leadership Champions
Transformation projects often face stiff internal resistance – so it’s critical to get members of senior management on board with the plan to see it through to fruition. Chances are that you will need more than just their approval, and that they’ll need to actively support and drive the project with you.
6. Get Funded
Yes, like any other complex IT project, digital transformation requires proportionate investment – both monetary and resource-wise. Make sure the whole project is funded from the outset, and that the organisation understands the full implications of the project including, wherever possible, an overview of hidden costs such as temporary drops in productivity. This implies that all relevant business units should be involved from the early planning stage, and their input incorporated into the overall plan.
7. Manage Stakeholder Involvement
That said, be careful not to end up in a situation where you have “too many cooks”. Different business units will have their own agendas and may well not agree with the priorities or even the strategic focus of the project. Others will have urgent needs that make them push for short-term or stopgap solutions, so you’ll need to be able to manage their expectations. Also, make sure you communicate your purpose when dealing with external partners, and be ready to manage them just as you manage internal stakeholders.
8. Watch Out For ‘Legacy Roadblocks’
Your interactions with stakeholders will give you an opportunity to identify the potential ‘legacy roadblocks’ in the organisation – not just in terms of technology, but also individuals who may become obstacles due to ‘legacy mindsets’, accustomed to and comfortable with the old way of doing things. Learning how to navigate them may prove essential to the project’s success.
9. Develop A Project Narrative
Digital transformation projects can cause considerable anxiety among employees. If the project involves restructuring, consider developing a narrative to help communicate and clarify the effects of transformation. This narrative should tell a compelling story of how market dynamics are changing, why transformation is therefore necessary, and what impact this will have on the organisation. It won’t necessarily soften the blow of redundancy, but it will help explain why the situation is unavoidable and minimise opposition.
10. Never Settle
Digital transformation never ends. The whole point is to be able to respond to the ever-changing dynamics of the market, and that means you can’t rest on your laurels. Keep your ear to the ground and continue to collect feedback from customers and stakeholders so that you can make continual adjustments.