How to succeed in Digital Transformation and magnify its impact

January 12, 2020 | Retail

The technology aspect is true of utmost importance in digital transformation, but the deciding factor is the people behind it and how it is being used for the company’s purpose. To transform successfully, companies must master digital technologies, adopt a digital mindset, and implement different digital ways of working to instill a rhythm of continuous improvement.

What drives successful Digital Transformation initiatives and their implementation across the organization? Here are 9 key elements that can make it a success.

Digital goals integrated into business strategy

Companies should design a clear vision with defined strategic objectives and priorities, and link digital goals to the overall business strategy. This will create synergy across the different stakeholders and align the organization into a common purpose. The strategy should be translated into clear action plans and a defined roadmap that addresses organization-wide factors such as technology, people, capabilities, and processes.

Digitizing the end-to-end customer experience

Companies need to digitize their end-to-end customer experience, not just only focusing on the automation of processes, by diving deep into their core capabilities, including all steps of the value chain, from the customer interface through to the supply chain and shared functions. Digital transformation is not about an IT strategy, but rather about leveraging evolving technologies to change the entire business.

Leadership buy-in and commitment

Companies should get the buy-in from both, executive leadership, and middle-management, and push them to align, engage, and commit to the planning and execution of the transformation programs. Without this, companies might face different sources of resistance and the execution process will become dysfunctional and siloed, having a reverse effect from being a positive transformation into a burden.

Right mix of digitally savvy talents

Companies should appoint the most capable people with high potential to lead the transformation efforts. The right mix of talents should be defined after a careful assessment of the roles, responsibilities, and skills required to conclude a successful transformation in line with the goals and keep it going for the future. In most cases, companies do not have the correct mix and underestimate how challenging the execution will be.

Empowering people to embrace working in new ways

Setting the strategy, sourcing the right talents, upgrading the technology platform, and getting the leadership buy-in will not make digital transformation a success unless otherwise integrated into an organization-wide cultural and behavioral change where employees embrace these changes by reinforcing new behaviors and ways of working. Companies should encourage employees to challenge old ways of working, experiment with new ideas, and collaborate with others when working on transformation.

Agility in adoption across the organization

Transformation should be governed with an agile mindset and a flexible framework to actively steer decisions, priorities, and actions. Leadership should be resilient and ready to adjust objectives and the action plan if needed be to navigate internal and external factors such as competitive pressures, budget runway, plan setbacks, and behavioral changes.

Monitoring towards realization

Companies must establish clear metrics and relevant targets to ensure that the transformation efforts are in line with the set objectives and roadmap; and traction is aligned across the different functions of the organization. Monitoring and measurement of success include setting, tracking, and reporting on different categories of metrics such as operational, financial, and commercial, linked to the strategy at different levels of the transformation program and initiatives.

Holistic technology design

Technology infrastructure and data platforms must be designed in a modular, flexible, and scalable way around the business according to its needs, to enable scalable performance, rapid change deployment, and seamless ecosystem integration. Many companies struggle to keep up or fail because their technology lacks flexibility and does neither take into consideration future expansion in business nor support the development and scaling of digital use cases.

Aligning budgets to the transformation plan

Companies must accurately assess the budgets required to implement a successful digital transformation ongoing exercise. Many companies fail just because they run out of budget to carry out the transformation plan, or they underestimate the requirements initially, or they build a non-optimal implementation plan, where budgets are spent on less important areas before important ones, reducing the impact of the efforts and leading to a misallocation of resources.

How can Digital Transformation make companies more relevant to the new business environment beyond just improving processes and operations? Here are 5 key areas that could magnify the impact of your Digital transformation initiatives if successfully approached.

Expanding reach through an ACPAR approach

Developing a digital ecosystem with access to data from a wide range of sources including customers, suppliers, sensors, IoT, among others, can expand a company’s reach beyond the traditional boundaries. Technology should not only be thought of as a tool to process data more rapidly, but as a holistic approach to access, capture, process, analyze, and make meaningful recommendations (ACPAR).

Improving visibility & personalization

With the advancement of technology companies are now able to learn and take actions instantly. For example, using machine learning in a recommender system captures changing consumer behavior, analyzes it, and produces automated, personalized recommendations that dynamically change over time for each user; a good example of this is Netflix. To achieve this, data systems must be connected to AI algorithms, which in turn feed decision engines that can act without human intervention.

Augmenting & refocusing the human capabilities

Humans are limited in their capacity to capture, process & analyze data, not to mention, executing repetitive tasks at a scale that is highly prone to error and opportunity cost. By combining the power of artificial intelligence, machine learning, and data science across different applications, algorithms can be designed to find patterns and make inferences in data much faster and accurately than humans can. By delegating these tasks to machines, humans can refocus their energy into leveraging their own unique cognitive abilities, such as imagining new possibilities, defining the purpose, and planning for the future, which will optimize the use of human resources for a company.

Promoting synergy of thought

Leveraging the use of technology across the organization, new ideas can spread faster from one person to others, helping them evolve to materialize and be acted upon, allowing the promotion of synergy to close the gaps between a company vision, leadership, culture and teams, and bridging an unleveraged cultural diversity into a cultural “Dignity”.

Facilitating collaborations

Technology when harnessed properly can help scale and accelerate collective action through changing the beliefs and behaviors of many individuals, and clearly defining how everyone fits within these collective efforts. Good examples of organizations that succeeded in this manner include Wikipedia, Facebook, and LinkedIn, where millions of users can willingly contribute and organize their information and knowledge into readily available, massively comprehensive digital platforms.

Digital transformation is not a one-time exercise, but an ongoing innovation process that evolves in parallel to the rapid release of new waves of disruptive technologies. Unlocking success in digital transformations and capturing its benefits can play a big factor in maximizing value for companies and making them thrive in a competitive business environment where digital technologies are dramatically reshaping industries and companies are pursuing large-scale change efforts to capture evolving trends and consumer demands.

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