How to achieve digital transformation in 12 steps

Digital transformation has been a key ask for a couple of years now. The COVID-19 pandemic, however, accelerated the pace of digital transformation. While many caught up, many missed the bus and are trying to catch up. There is no need to get daunted by the word transformation. If done right, digital transformation makes things easier. If done wrong, it can make things more difficult.

An Everest Group research found that 78% companies failed to see any addition to their business value from digital transformation efforts. This article shares 12 secrets to a perfect digital transformation journey.

1.Define your Ambition

Success starts when your organisation can answer questions like - What is the desired outcome of transformation? Are you looking for more sales, revenue or cost-saving? Where is the transformation headed?

In dealing with these questions, one needs to articulate the digital business strategy by ensuring broad organisational alignment. You must rethink your business for the digital age and then define governance and prioritization for how the enterprise will balance transformation objectives. The next step is to create a compelling communication strategy to sell the transformation story to the organisation. The organisation must then clearly define the speed of adoption and the levels of risks — financial, regulatory, and reputational.

2.Establish the office of Chief Digital and Innovation Office

The Chief Digital and Innovation Officer (CDIO) is the central leader and integrator in the digital transformation process. CDIO works as the cardinal point for decision-making for complicated situations that involve aligning cross-department efforts, resolving conflicts, and orchestrating the rollout of digital initiatives and capabilities.

The CDIO helps create a common language and decision-making framework. They also help establish an innovation office to identify POC and pilot. These include enterprise innovation by means of intelligent simulation, functional innovation by means of automated routine work, edge innovation by means of AI-augmented workflows. The organisation must then identify separate workstream and leads for – digitisation, employee productivity, customer experience, operations excellence.

3.Treat digital strategies as an integral part of your business strategies

Digital transformation is more about strategy and mindset than technology. It helps organisations evolve their operations and contribute towards the evolution of the business itself. Digital transformation is a long-drawn journey - the goals and target metrics will keep shifting and moving constantly.

4.Focus on the customer journey

When developing an organisation’s vision, one must think customer-first with a focus on how the customer journey would look like. This would give way to leveraging technology to create more relevant ways to engage with customers, and deliver exceptional customer experience along the journey. The organization must evaluate the impact of its digital business transformation strategy on customers and the industry. It should rethink the meaning of customer loyalty and learn to engage with customers as a digital-first business.

5.Shift to product mindset and everything-as-a-Service (XaaS) model

What enables a digital transformation? My first and foremost guess would be a mindset shift. As enterprises look for effective, manageable entry points into digital transformation, they need to unleash their inner futurist, think big, and shift to product mindset and Everything-as-a-Service (XaaS) model. Business leaders should consider “dream customer journey scenarios” when setting up their long-term strategies. They should evaluate disruptive market and technology innovations in your industry to ensure your knowledge remains current and establish a culture of experimentation.

6.Employ a proper framework to help your workforce through the change

Educate the workforce about the benefits of digital transformation. Change is usually met with resistance and it is important to warm your workforce to the upgrades that digital transformation will bring about. Create a psychologically safe environment for the workforce and be transparent about the associated changes. It is crucial that you coordinate work according to the hierarchical structure of the organization and DO NOT surprise workforce and executive committee members with unplanned changes.

7.Be agile. Fail Fast, Learn Fast, Deliver Fast!

The organization must establish the building block of DevOps/DevSecOps and consider Low Code/No-Code platforms as a viable alternative. Stack your short-term goals along with your big projects and be agile with their deployment. Focus on the pilots, learn from the results, and apply changes accordingly. When you focus on the tiniest details of your pilot, you observe the red flags at the elementary level and learn from your mistakes.

8.Security as enabler for digital transformation

The world has shifted to a virtual presence and companies are faced with compliance and regulatory challenges. Customers are much more tech-savvy today and prefer interacting with enterprises that are ethical, compliant, and prioritize security. For enterprises to be successful in the journey, security CANNOT be an afterthought. Security has to be an elementary element of the design process. If you take my word, this will help you reduce unnecessary costs and minimize the need to re-engineer solutions late in the game.

9.Data as an asset

“Data, is the new currency of digital businesses.” The leadership, in an organisation, needs to invest resources in generating data that can be shared across departments and managed to create value in the digital era. Mining and managing data aid operations as it helps with identifying hidden patterns and establishing a framework to capture the trend into many functions and contexts in the organization.

10.Own your digital transformation

It can be quite tempting to fall into the vendor trap. It can be tempting, especially with different moving parts, tools and techniques, technology platforms, and different stakeholders reeling you in different directions. To own your destiny manage vendor innovation, move beyond typical outsourcing to co-Innovate, co-invest models with system integration partners or vendors. Develop capabilities in CDO, business units, and IT organization. Measure all feedback – good and bad.

11.Establish technology roadmap and strategic technology partnerships

Beware of falling into the trap of enticing technology (even the buzzwords!). Align your digital transformation with a technology roadmap and identify the gaps. Deliver innovation in terms of IT tools and design solution experimentation. Support technology alignment for digital business transformation. Develop strategic technology partnerships instead of considering technology providers as vendors. Adopt a human-centric design. Don’t forget to Have Fun and celebrate success along the way.

12.Develop the partnership ecosystem for network effect 

Seek out strategic partnerships that align with your transformation vision, and increase the speed and quality of your initiatives.  Digital disruption is blurring the lines between traditional industries. Most markets are being dramatically reshaped as agile new entrants (e.g. Fintech, Startup, niche Cloud borne companies) are putting increasingly empowered customers in control and realizing the benefits of these new business models. Leverage the network effect of strategic partnerships, to build a powerful ecosystem to advance digital transformation, encourage collaboration, and deliver meaningful outcomes to customers.

By Gaurav Aggarwal, Global Lead - Everything on Azure Solution Strategy and GTM, Avanade