Seven Steps To Build and Implement a Digital Transformation Strategy

Key Points in This Article:

  • Digital transformation (DX) is more important than ever to business growth.
  • Effective DX strategies involve fully assessing the business’s existing operation and identifying potential growth areas.
  • Building a successful digital transformation strategy requires strategic planning, time, resources, and stakeholder buy-in.

Digital transformation. It’s no longer a buzzword that can be dismissed or ignored. The pandemic illustrated how important digital technologies are to the future of work, forcing many companies to embrace them or face extinction.

Sometimes, businesses could get away with stopgap measures rather than true digital transformation. For example, some offered customers online delivery, which provided enough revenue to keep them in business. Others could offer remote work to some of their employees temporarily.

But these moves alone don’t constitute true digital transformation. Nor are they guaranteed to help your business stave off disaster in the event of another catastrophe. More importantly, they won’t help you grow your business into the success you’ve envisioned.

Digital transformation can truly accelerate business growth. But to execute a successful digital transformation strategy, it’s important to understand what the term truly means.

Digital Transformation

What Does Digital Transformation Mean?

At its most fundamental level, digital transformation (or DX) refers to converting analog data into digital form. Think about how many people spent time and money converting their videotapes and CDs to digital form in the early 2000s. Many businesses approach DX purely from a paper-to-digital conversion perspective and think the phrase is limited to scanning documents.

But this is a very narrow definition of DX, one that does not capture its full potential. Businesses that have embraced DX have examined how digital technologies can be used to improve every aspect of their business, from products to processes. Scanning every paper document you generate is beneficial from a business continuity perspective. But when your employees begin to collaborate via digital documents is when you start to see productivity and cost savings.

Cloud-based collaboration is one of the more common methods of digital collaboration. Others include automating common tasks like onboarding, moving to fully remote operations, creating fully online engagement, sales, and fulfillment strategies, and empowering departments to build workflows using low-code / no-code platforms.

As AR and VR expand, some companies have placed big bets on virtual products – and some consumers are buying. IoT is another area ripe with potential for new products. And on the service side, these and other emerging technologies can add new dimensions to the user, consumer, and employee experience.

How To Build a DX Strategy for Your Business

These are just a few ways businesses like yours can engage in DX. In fact, you’re probably already leveraging digital technologies in one of these ways right now. But if you feel like you could grow farther and faster, but are not sure where to start, here’s how you should approach designing a DX strategy for your business.

1.    Assess Your Current Organization

Start by taking stock of how your organization already uses digital technologies. Consider not only what platforms you use but how they are used from a process perspective. Also, evaluate what pain points you have from an operational perspective, keeping an eye on those that might be remedied by different platforms or different uses of existing platforms.

It’s also critical to consider the customer’s perspective. Evaluate your buyer’s journey and all available and relevant market research. What are their pain points, and how do they make their decisions? Consider how digital technologies may help them solve their problems more effectively, including revamping everything from marketing to sales to even the products themselves.

Don’t neglect your strategic planning documents. You’ll want to think through how your potential solutions are aligned with your business goals, mission, and vision, as you evaluate your existing organization and potential areas for DX.

2.    Conduct Preliminary DX Research

When you have a clear picture of your organization’s existing operations, start exploring the kinds of technologies, like AI and machine learning, cloud applications, data analytics, and IoT, that can fill existing gaps, improve processes, and enhance products. Don’t limit yourself to applications that fit neatly within your existing infrastructure. In some cases, to truly leverage DX, you may need to make fundamental changes to your operating environment. Use your research to outline possible solutions that range from relatively small process improvements to long-term organization-wide transformation. Make sure you connect these solutions to quantifiable outcomes aligned with your business’s strategic plan and goals.

3.    Discuss Your Assessment With the C-Suite

Next, you’ll brief senior executives on the results of your plan. Clearly outline the opportunities and risks, optimal solutions, necessary resources, and stakeholder impact. It’s also helpful to identify key personnel who help influence senior executives and brief them before a formal presentation to the C-suite. Without their buy-in, authorization, and resources, your efforts are dead in the water. So lay the groundwork by prepping key stakeholders, and even some senior managers, ahead of a formal presentation to a group of senior executives.

4.    Work With Key Stakeholders To Craft a DX Vision and Strategic Plan

At this stage, you’ll be working to transform your proposed strategy into a vision and a plan – something you cannot do effectively alone. Identify the employees crucial for organizational buy-in, planning, and implementation to start developing your DX project team. These will likely include an executive or department head or two, key employees, and IT department representatives, at minimum.

When you’ve gathered these essential individuals together, start your planning process with a vision statement that accurately describes your ambitions for the project. Next, you’ll need to develop a plan to implement the solution(s) you’ve begun to map out. Many DX plans have a three-to-five-year time horizon and must be carried out with minimal impact on existing operations.

Your plan and budget should reflect your existing operating and organizational environment. It also must be adaptable enough to survive ongoing adjustments your leadership will make to day-to-day operations to navigate the business environment.

5.    Identify the Appropriate Technologies

Work with your IT department to identify the right technologies. Rely on them to help you determine what applications, platforms, hardware, and software will work best within your existing operating environment, budget constraints, IT governance policies, and cybersecurity plans. Also, work with your CIO to ensure you have a sound plan for implementation. Your in-house IT staff may not have the experience or time to deploy the new solutions effectively. You may need a managed service provider, systems integrator, or another third-party vendor to help you with your DX plan.

6.    Train Users and Test Technologies

A DX plan’s success or failure can easily hinge on whether or not appropriate testing or training has occurred. You need to ensure all employees know what the new system(s) can (and cannot) do and then train them extensively to do it. Employees who aren’t sufficiently trained will not only make mistakes that undercut your intended outcomes. But they may also erroneously communicate to their colleagues that the system does not work (rather than that they don’t know how to use it), eroding your stakeholder buy-in and potentially jeopardizing your project’s success.

You must also ensure that all possible system errors and glitches are identified and remediated before rolling out the new system(s) organization-wide. Doing so means utilizing multiple employees to test them in depth. A simple glitch on launch day could also result in major system errors or the perception that the system does not work, either of which could impede your efforts.

7.    Implement, Evaluate, and Adjust

Once you’ve trained employees and tested your system(s), you’ll want to roll it out organization-wide. Doing so will necessitate consistent and comprehensive communication with all stakeholders before and after the launch. Consider feedback, and adjust your system(s) as necessary. Also, make sure you’ve scheduled time to evaluate what users are saying about the DX project and how they use the new system(s) in practice. Evaluate your envisioned outcomes against your success metrics and ensure you’re on target.

Market dynamics, leadership changes, and other unexpected events can necessitate rapid changes you’ll need to adapt to. But by keeping an eye out for these changes, scheduling evaluation periods, and assessing your DX project thoroughly and regularly, you can ensure that it is successful in the long run.

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