How To Formulate Your Digital Transformation Strategy

The digital environment is changing rapidly, and successful leaders must be willing to experiment with new technologies and become more flexible in their approach. Companies must stay on top of market disruptions and evolving technologies while providing customers with the best experience. In fact, 76% of managers believe that businesses should radically reengineer customer experiences bringing technology and people together in a more human-centric way.

Business agility, resilience, and performance are the most important factors that determine the success of any organization, no matter how small. A well-defined digital transformation strategy is essential to capitalize on advances in technology. Businesses who are losing market share, experiencing a high rate of customer dissatisfaction, having high turnover, or noticing disruptive technologies used in the industry should consider implementing a digital transformation. The best way to ensure a revolutionary change in the business and minimize risks is to develop a digital transformation strategy.

What Is Digital Transformation?

Digital transformation is an operation to change traditional business processes with digital technologies to streamline systems and increase profits. The goal of digital transformations is to meet customer needs, maximize productivity with the people within the organization and improve scalability so the business can serve more people. When performed properly, a digital transformation can dramatically improve customer experience, leading to significant company growth.

Digital transformation isn't simply about making minor adjustments. Instead, it's about radically improving the organization's end-to-end operations using innovative technologies and strategies. So what are examples of digital transformation?

For example, an energy company may create online portals empowering customers to take control of their energy usage at home. Or perhaps, a bank invests in mobile banking technology to help customers better navigate their finances.

What Is a Digital Transformation Strategy?

Simply put, a digital transformation strategy is a detailed roadmap of the methods you plan to use to digitally transform your business to solve any challenges you encounter along the way. It involves redesigning your business model with a focus on customer experience and formulating result-oriented technology initiatives. It is critical to have a framework through which everyone can agree on how to prioritize funding and resources and identify any processes that need to be changed along the way. Digital strategies have legal, financial implications, and if business models change, there are implications for sales and quota structures. The plan also focuses on using technology to improve business performance, whether creating new products or reimagining existing processes.

Digital initiatives impact every aspect of your business, such as employee satisfaction, skills development, employee productivity, and collaboration. Forming an effective digital transformation strategy requires high-level expertise and a shift away from traditional business management practices. Whether you are dealing with modernizing legacy systems or implementing entirely new digital systems, you must find the most fitting technology.

Elements of a Digital Transformation Strategy

Several components need to be considered when formulating a strategy. Let's take a look at each of them.

Visionary leadership

When formulating your digital transformation strategy, it's vital to define the vision and mission of the company. Overseeing the creation and execution of the strategy should be disruptive executive and courageous leaders willing to think outside the box and do what's best for the future of their organization. Here are some qualities of transformation leaders:

Being agile: Leaders should be willing to experiment with new technologies and be flexible in their approach.

‍

Have a purpose behind their transformation: Leaders should know why they need to rethink their business approach. For example, a leader must think about using technology as a tool to give a competitive advantage and push towards innovation.

‍

Strive for partnerships: Every leader should embrace partnership. Learning how to leverage people's strengths to their advantage and seeking collaboration can help add another layer to the business.

Company culture and communication

Get ready for a huge cultural shift. Usually, customers and employees of the company do not want to make big changes, which makes it difficult to carry out any transformations. Culture is the cornerstone of any successful digital transformation program. Therefore, it will be helpful if you prepare your employees in advance. Effective communication can help you with this. Talk to your employees about your digital transformation strategy and how it will benefit each stakeholder. Conduct training sessions with your team to prepare them in advance. By showing how important it is to align culture with new initiatives, you can prepare your employees ahead of time. Create clear training programs, update them regularly, and be consistent in your efforts to put them at ease. Communicate as much as possible, even at the risk of over-communication!

Imagine, for example, separate digital marketing teams for retail brand stores and their e-commerce business. They each have their own subgroups of digital and social media marketing, email marketing, and direct marketing. These are six teams in two separate business lines, each with different skills, managing different business processes, measured differently, and motivated differently. How can you do this successfully if your organization and processes are still running on these independently managed repositories? That's why it's important to align the people and processes together to deliver a singular customer journey to deliver a seamless experience.

Technology

Selecting the right technology for your company is one of the most important steps in developing a digital transformation strategy. Common technologies that may be used for digital transformation includes:

mobile apps
artificial intelligence or machine learning
IoT
additive manufacturing
augmented reality
automation softwares
robotics

The pursuit of adopting these technologies may require outside vendors and partnerships. Therefore, understanding your business needs and gathering expertise essential features or characteristics of the technology. Since the technology often requires a hefty investment, it's important to set budgetary limits. Whether you're upgrading an old system, upgrading an application, or deploying a brand new digital system, you need to find the right technology.

Importance of a Digital Transformation Strategy

A digital transformation strategy can help unlock a company's productivity and help customers better interact with your brand.

Here are a few benefits of having a digital transformation strategy:

Identify profitable market opportunities that may not have been discovered.
Customers benefit from having a better user experience and more convenient online interactions.
Eliminates wasted resources by the company that doesn't move the needle.
Automates time-intensive mundane tasks that are repetitive so that the company can focus on higher priorities like mission-critical tasks.

In today's world, any business that hopes to remain competitive should have a seamless digital experience. That's because customers have high expectations. Generally, they expect to have quick delivery or turnaround time, low prices, and a wide selection of options to choose from. Providing a high-quality experience for customers can differentiate your business from competitors, which drives recurring revenue.

Switching to digital technologies or upgrading technologies can drastically improve productivity. For example, AI tools such as chatbots can significantly limit the number of customer support tickets received from your team. Email marketing automation tools allow email sequences to guide prospects from a cold lead to a paying customer. Project management softwares can help your organization stay organized on tasks and create seamless communication between cross-functional teams. Aligning your sales and marketing team can improve the overall customer experience, thus increasing conversion rates.

Building a Robust Digital Transformation Step-by-Step

Before drafting a digital transformation strategy, it's vital to get buy-in from stakeholders and the people within your organization. It's best to connect the transformation by aligning it with a meaningful vision for business and career growth. When everyone sees the new objective as a win-win, they'll be more willing to place their best effort during the execution phase. Here are the five steps to building a robust digital transformation strategy.

1. Discover your "why."

About 37% of CEOs or board of directors hold back organizations' digital transformation initiatives. Why are you looking to have a digital transformation in the first place? How will it benefit your stakeholders, and how will it help your organization move closer to its long-term vision?

Sell everyone on the dream of the transformation. For example, when moving to the cloud, many employees might not care about how it works. Paint the picture using a day in the life of an employee and how the new digital environment would improve their workflow. Once they are connected to the strategy, they have something to aspire or look forward to. If organizations can't come to an agreement, third-party strategists can be hired to provide operations consulting to help provide unbiased views of the situation. These consultants are typically experts in the industry and well-versed in the latest technologies and trends that are disrupting the markets.

2. Align the digital transformation strategy with business objectives.

Connect the strategy with the key business goals for the year. For example, how will implementing a new technology achieve more sales or better customer experience? When the transformation is used to help you achieve business objectives, stakeholders or business partners are more likely to help and provide their input. Ideally, every department should be involved with the digital transformation to ensure connectedness in the organization. An IT department that develops the technology may not fully understand the customer's needs. Therefore, it's vital that the marketing, sales, and customer service department share their input and impart their knowledge in the process.

3. Build a digital transformation roadmap.

Once you've determined your why and how the transformation directly impacts the business objectives, you're ready to create a detailed strategy to put the plan in motion. Here are some things to consider when creating your strategy:

Outline key goals, priorities, and milestones your business hopes to achieve.

‍

What are problems that need to be addressed, and how can technology and digital transformation provide the solution to the problems.

‍

What are traditional strategies, processes, or outdated tools that are no longer serving you? It's important to audit every aspect of your business to see which systems are effective and which aren't. For example, if your team doesn't have a way to track, record sales calls, and measure customer interactions, you may want to implement CRM software.

Identify gaps in the market that you could leverage to your advantage. Perhaps, you could make the product considerably cheaper than your competitors by solely focusing on the core of the product. Or maybe, you have connections to a better supplier. Possibly, you've found a better lead or digital customer acquisition strategy that lowers your marketing costs.

‍

Upgrade your technology stack to increase efficiency and streamline processes.

‍

Identify people or departments within the organization responsible for each stage or component of the strategy.

4. Perform tests with the new processes and technology.

Going from traditional processes to new digital ones can be difficult. That's because everyone is used to doing things one way. Change must be implemented and enforced from the top down. Before any technology launches, companies must run many tests to identify and evaluate risks. It's one thing to map out a concept or theory, but implementation requires many iterations. Developers get a chance to fix malfunctions or glitches before employees or customers use the technology. Customers using a faulty product or service can lead to poor experience and damage to your brand image. For example, before launching the new mobile app to customers, make sure that multiple unbiased test groups provide feedback. Getting early feedback can help with the initial uncertainty when launching. From a customer's perspective, the app operates smoothly and adds convenience.

5. Gather feedback.

Many businesses will waste time and resources on digital products that don't deliver significant value to their business. The best way to improve is to gather feedback using the "build-measure-learn" method. This approach requires testing your hypothesis regularly and gaining actionable insights. Then, you must adapt or eliminate certain features or processes along the way. In essence, you are doubling down on what works and getting rid of the things that don't. By the end of the method, you'll be left with a core product with only essential features.

Common Pitfalls and How to Avoid Them

Even plans that are meticulously thought out can face challenges. Look for these common pitfalls when creating and implementing your digital transformation strategy.

1. Resistance to change

Change is hard, so it can be difficult for you to win hearts and minds for your bold new plans. Resistance to change from management, staff, or customers can quickly derail your digital transformation. Work with stakeholders early to build consensus and collaborate on facilitating transitions (and eventual transformation).

2. Lacking expertise

Digital transformation is a massive undertaking, and few people have all the skills or experience to implement these changes seamlessly. To prevent growth problems and rookie mistakes, look for partners with the knowledge and skills to implement your plans. Also, keep in mind that digital transformation is not the work of one person. This should be a cross-functional effort involving multiple departments, so you need to ensure these teams are properly staffed and involved in the project.

3. Failure to track or apply data

Data is useless if you don't use it. As your organization takes advantage of new digital assets (such as improved data collection and analysis), be sure to put in place processes to take full advantage of that asset. Companies that use their data and act on it quickly outperform the competition. Developing a digital strategy is not easy, but it is important to lay a solid foundation to start your digital transformation. And companies that plan ahead today are preparing for a brighter future.

Building a strategy sounds simple in theory but requires complete objectivity and expert analysis. A Digital Transformation Strategist plays an advisory role in your company on organization shifting decisions such as market shifts, organizational restructure, cost-saving plans, and more.

At Universal Creative Solutions, we work closely with an organization to evaluate its current business model, systems, and customer experience. Then, we help bridge the gap between their current situation and goals by devising a clear digital change strategy. Our in-depth industry knowledge and strategy consulting can help your business implement disruptive technologies to give your business a competitive edge.