The proliferation of different digital technologies has sparked the digitalization of various business models in nearly all industries. Further, the health crisis that began in early 2020 pushed several large corporations to reexamine their digital strategies and increase their budget for the digital transformation process.
Digital transformation is not a familiar concept and a lot of people don’t know so much about it. It’s a journey filled with many blind spots and in fact, executives of most companies are still struggling to grasp what it means, the scope, intensity of change and repercussions.
So then, how can organizations approach a digital transformation roadmap? Here is how they can get started.
What is a Digital Transformation?
This is the process of applying digital technologies to existing business models with a view of disrupting the industry. It’s also a reality that organizations must face, embrace new culture, processes and structures that are all aligned with IT architecture thus contributing to comprehensive digital solutions.
The digital transformation process lasts longer and consumes massive resources purely because it’s a fundamental change in any organization.
The downside of digital transformation is that it can introduce very expensive mistakes that can endanger the company. Further, the process introduces complex and overwhelming changes to the entire organization.
For those reasons, it’s important to analyze holistically the impacts of the entire digitalization strategy. This will enable the management to internalize the nature of change that the entire company will undergo and its impact on various aspects and parts of the company.
A huge number of executives are facing up to digital reality and are aware that digital technology can greatly improve their current business performance. They also know that digitalization will give birth to completely new business models that can send shock waves in the industry.
Still, these business leaders understand that first-movers will always have an advantage while those companies that fail to adapt will be left struggling to survive.
Digital transformation is a journey and each stage presents unique challenges. These occur at the outset even as the management tries to position the organization on the right course for success.
The next set will occur during the launch and acceleration phase because this is when initial changes begin to take root while others present them in subsequent years when the digital initiatives are being scaled across the entire enterprise. This is when the digital capabilities and new ways are the lifeblood of the organization.
Many executives are concerned about how organizations can approach a digital transformation roadmap? They are wondering how they can get started. The good news is that there are industry digital pioneers that have succeeded in achieving full digitalization. As a result, they are using their early efforts and successes to create a digital transformation roadmap or guiding principles that other executives can use.
So then, let’s get started.
How Businesses can Approach a Digital Transformation Roadmap
Secure Stakeholders Commitment
The CEOs and their leadership team should be the first people to commit to digital transformation for the whole process to succeed.
The executive should communicate the vision, what is to be achieved, and the reason. They should demonstrate to the entire organization that digitalization is an unquestionable priority, secure other leaders commitment and make it extremely difficult to backtrack.
Further, stakeholders should be single-minded and aggressive about this process which is ambitious, disruptive, provocative and in most instances uncomfortable.
Set Clear, Ambitious Targets
It’s completely impossible to invest in something that is not clear. So then, executives should set the sight of the organization at the right level in order for it to link its investments to clear, ambitious targets.
Setting targets helps others to understand the magnitude of full digitalization in the organization. Those employees that choose to stick to older methods that are massively inefficient are motivated to support cycle time improvement even if it’s by 10% when there are clear targets.
Over time they will find themselves supporting 100% when they discover through external benchmarking that others have done it. So in the end the entire organization will realize that if it can’t match that benchmark then someone else will do it.
Further, a company with clear targets from the outset has minimal chances of backsliding when it faces challenges during the transformation process. Also, the company is able to impose discipline on the whole decision-making process about which initiatives should be prioritized for maximum impact.
Additionally, targets are necessary for every single source of value creation – revenues, cost savings, customer and employees satisfaction as well as improved agents’ performance – the required new capabilities and new ways of working.
Allocate a Budget
The process of achieving full digitalization is costly, so it requires significant investment. Companies with outdated systems must revamp their IT which is likely to lower their profits for some years. However, this is necessary for the company to remain competitive.
Still, a lot of investment is needed to improve the present business and create new ones because the business world is evolving. So then, there is a need for companies to invest in partnerships to acquire expertise in emerging fields and innovate.
Launch Lighthouse Projects First
Companies should carefully pick the first projects to start with and give them adequate support in order to build momentum and for the early efforts to thrive.
Further, starting with projects that have a higher potential for huge rewards and manageable risks can help the companies to win early support. These include projects linked to customer services activities or redesign of a given process.
Build a High-Caliber Launch Team
It’s important to appoint a high-caliber launch team to coordinate the digital transformation process. This is important because this is a capital-intensive project and the organization should avoid any duplication of activities.
The team should redesign the customer journey and replicate it across the organization as it extends the digitization efforts.
The team leader should put in place appropriate skills and technology, select the sequence of the transformation, evaluate the process against the targets and prioritize the day-to-day activities.
Finding the right digital talent can be a challenge. However, starting with a single renowned expert who serves as an anchor hire can help attract others. Still, the company can outsource from an agency that specializes in helping companies achieve full digitalization.
Establish an Independent Digital Unit
A successful launch of a digitalization strategy depends on how the company organizes itself. First, it’s important to establish an independent digital unit that will promote new ways of working that are vital for digital success.
The digital unit is responsible for attracting and retaining specialists who support digitalization enthusiasts. Combining the digital unit with the rest of the organization can cause them to be frustrated and bored by the pace at which the digitalization transformation process is moving at.
Instead, such a team should be empowered by giving them the authority to make their own decisions in order to make a swift impact on the organization.
Promote a Digital Culture
All the recruits should have digital skills. The way the organization focuses on the needs of the customers should also change.
In any organization, cultural change is one of the hardest parts of the digitalization transformation strategy. Basically, digital strategies help employees to renew their culture with innovative ways of working and thinking. It’s a recall of what they knew and made them successful.
They might have thrived by analyzing their competitors’ marketing strategies and business cases. But now they have switched to considering how their decision creates value for the customer.
This is likely to be the most effective and less risky area such as marketing where the company tests the channels and messages to find out which of them is more effective than others.
Prioritize Initiatives that Promise Quick Returns
The company is making good progress at this point because it has a couple of initiatives that are running and capturing value.
Arranging initiatives with a view to quick returns will help this project to be self-funding and secure greater support from all stakeholders. Letting a thousand flowers bloom will spread scarce resources thinly. Instead, the organization should pursue a few digital initiatives that are manageable in order to tend the core business performance and capture value for it.
In view of that, it should prioritize strategically important initiatives that can reduce complexity and quickly pay back.
Involves scaling up digital initiatives by modernizing core operating platforms. It also includes boosting skills and systems. Hiring new talents is vital however most organizations find it challenging to attract them. If that is the case the companies should establish partnerships with agencies such as software providers.
Still, the company can start an IT literacy program for its internal training in order to update its business line managers to capture IT’s strategic value. Indeed, the end of digital transformation is the creation of an agile operating model across the company.
Adopt the New Operating Model
This is the time that the initial company structure changes. For instance, the product managers will start to make decisions that affect other functions. There are no permanent teams in a fully digitalized organization; instead, they dissolve once they capture the value at stake and then regroup around another cost reduction strategy or a new revenue growth source.
In other words, the entire organization joins the IT tea in adopting an agile approach of operation and working.
Companies that pursue digital transformation are most likely to meet challenges such as cultural issues and lack of the desired type of talent.
The article has delved deep into how organizations can approach a digital transformation roadmap. However, there is no rule book to solve this apart from a company starting the process and learning from it.
So then, digital transformation involves a rethink of the corporate model using digital technology. It’s at this time that IT strategies will start to take shape, customer satisfaction will jump higher cycles time will shorten while the cost will start dropping.
All companies should consider pursuing it to avoid lagging yet going digital is the trend.
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