How to Spark a Digital Transformation

Outdated internal processes can slow business down and make projected completion dates harder to predict. If you find your standard operating procedures are not as streamlined as they used to be, your bottom line could be suffering, especially if you’re still using analog processes and outdated software. That’s when you know your business needs a digital transformation.

For new businesses, building a foundation upon the latest technology will ensure you have an advantage and don’t have to play keep-up later.

What Is a Digital Transformation?

A digital transformation is the process of using digital technologies to create new digital processes and modifying existing ones to boost efficiency. It’s a transformation that encompasses marketing, sales, customer service and everything in between. 

A digital transformation has two fundamental characteristics:

  1. Streamlining internal processes
  2. Improving customer/client interactions and employee collaborationWhile computers ushered in an era of converting hard copy files to digital versions, far too many businesses have yet to complete the necessary next steps to distill the digital documents and data into actionable insights. So while digitization made storing data more efficient, the “business systems and processes were still largely designed around analog-era ideas about how to find, share, and use information.” 

Think of it as the transformation of both outward-facing and internal processes that allow a business to improve its operations and proactively prevent work disruptions. This can include incorporating cloud architecture or standardizing databases on SQL.

Before starting a digital transformation in your office, it's important that everyone in the organization — from entry-level specialists to the CEO — not only knows what to expect when implementing new systems, but also understands that change is an evolution that ultimately makes work easier. Inspiring employees and department heads to buy into a vision can be a hurdle, so take Henry Ford’s words of wisdom when shaping your pitch: 

“If I had asked customers what they wanted; they would have said faster horses.” —Henry Ford

Download the ExitCertified whitepaper, “How to Ensure Maximum ROI on IT Initiatives with the Right Learning Partner" to discover how a learning partner can support you in all stages of planning, implementing, and enabling high-quality training that aligns business and IT initiatives. 

Tips for Creating a Digital Transformation Strategy

1. Start by Focusing on Customer Needs

To be successful, you must first assess customer-centric procedures because, at the end of the day, the customer should always be your number-one priority. Therefore, it’s key to understand exactly who your customer is, how their needs evolve and how flexible your company’s internal processes are in addressing those needs. 

As an example, let's take a look at the digital transformation of Fidelity, a U.S.-based multinational financial services corporation. Founded in 1946, their investment and asset management services were primarily sold through personal advisors. However, in the digital economy, consumers and investors can easily bypass a financial advisor and buy directly. That’s why Fidelity also introduced a mobile app that mimics the desktop trading experience. This embrace of the digital era has allowed Fidelity to compete against the rise of financial technology startups.

With the advent of the digital economy, consumers are bypassing intermediaries and dealing directly with a company after doing their research. That’s why you should consider how your organization can better engage consumers, quickly assess and customize to their personal preferences and streamline them down your funnel. 

Once you’ve assessed your customers’ needs, the next step to planning a digital transformation strategy is to gain an understanding of how the value chain in your industry is changing, and then brainstorm modern digital solutions from there.

2. Set Key Performance Indicators (KPIs) to Measure Success

This step requires some serious number crunching. The biggest challenge with digital is its all-pervasive nature, which makes digital a huge opportunity, but also requires a considerable amount of time for planning a worthwhile upgrade. In the end, the hallmark of success still comes down to the impact on your bottom line. This means you need to root a digital transformation in realistic, attainable goals and measurable KPIs. 

Is your initiative focused on increased customer engagement, growing revenue, retaining customers or upselling products? Putting together tangible KPI targets to anchor your digital transformation will help guide you in prioritizing tasks.

3. Streamline Data Collection with Big Data Analytics

Data is the key to unlocking the full potential of a digitally connected world. For every customer, you should create a product or service that provides a transparent and personalized experience. This starts by standardizing internal data processing. 

Data allows you to quickly identify each customer’s nuanced pain points as well as the solutions to address them. Data has become so vital that the field of data science is exploding across multiple industries to meet the demand.

4. Align the Organizational Structure Around a Common Goal

Digitization is highly cross-functional — it's not only about marketing or IT, but it's also about all the functions working in sync. For example, organizing your department and management structure around dedicated software for each department’s optimized standard operating procedures will shake things up, but it is necessary to instantly gather cross-departmental insights. Additionally, introducing digital semi-automated processes reduces the risk of human error when dealing with databases. 

5. Use a Two-Speed Strategy for Prioritization

Undertaking a digital transformation means you run the risk of disrupting business norms, which can delay the rollout and hurt your bottom line. 

To avoid a slowdown, implement new digital initiatives using a “two-speed” strategy. First, focus on small, specific tasks to implement within your company. This creates small wins alongside daily routine tasks that will eventually progress over time toward a total digital transformation.

Avoid attempting an organization-wide implementation all at once. It can’t be done in a single day or week, so instead, formulate a plan that takes the two-speed approach and makes sense based on your organization’s immediate needs and available resources. 

How to Implement a Digital Transformation

To stay on track during the transformation, you must appoint someone to oversee the implementation and report on progress. Should the CEO, CIO or CTO be responsible for this? Or should you create a new role within your organization and hire externally? 

The truth is that no individual can fully lead the transformation on his or her own. Digital transformation transcends technology, marketing, finance and all the operations in between. Instead of just one individual, it’s going to take a team effort.

Hiring an expert externally doesn’t fully address the challenges you will likely face. For example, the title “Chief Digital Officer” (CDO) is emerging, but the role isn't fully empowered. The CMO and CIO roles are still there, and the CDO depends on them to do his or her job correctly. Thus, the CDO role could end up being more cosmetic than functional. 

Case Studies in Digital Transformation

When starting down this path of your initiative, your leadership team may be able to find inspiration from some of today’s biggest tech companies, like Amazon and Netflix. 

Within tech giant Amazon, you’ll find dozens of product managers focused on different customer initiatives. Each product manager works agilely to solve a specific customer-facing problem, yet they also need to constantly collaborate as part of a top-level initiative of excellence in speed and accuracy.

Media services provider Netflix realized that its old model of mail-order DVDs could never compete with the convenience of multiple brick-and-mortar Blockbuster stores across the country. In 2000, Netflix sought out a deal for Blockbuster to buy Netflix outright for $50 million, but Blockbuster’s CEO did not take them seriously, which may have ultimately doomed Blockbuster’s fate.

Fast forward to today, Netflix is a $28-billion company, while Blockbuster filed for bankruptcy in 2010 and only has one physical store left in Bend, Oregon. 

If you were to sit down and interview senior executives of Netflix, none of them would say that their CMO or CIO were solely responsible during their digital transformation. Rather, they'd tell you that their entire company was reorganized around the concept of delivering a better product for their customers. It was about reimagining what the home movie experience could be, and then looking internally to identify technology and knowledge gaps that had to be filled to realize their vision. The “big picture” could only be seen by fitting a thousand pieces together.

Leading Your Own Digital Transformation

You and others leading the transformation must have a thorough understanding of the strengths and weaknesses of your business. You also need to keep tabs on the technologies available on the market, as well as which of them are best suited to improve your processes. This requires your team to be innovative thinkers who are free to give and receive feedback from peers at all levels of the company. At the same time, they should also have an ear to the latest technology trends to push the narrative that change can and will be done. 

For example, do your leaders understand the importance of upgrading Wi-Fi routers to Wi-Fi 6 to support faster connection speeds for a higher number of devices in use? (You’ll also need next-generation office equipment that is compatible with new routers.) Are your leaders passionate about integrating big data to take advantage of artificial intelligence, social listening and machine learning? Do they know how SQL databases are used for accurate, streamlined data management across a scalable amount of storage nodes?

Answering these questions may be more challenging than you expect. Typically, the business professionals don't understand IT, and the IT professionals don't understand the functions of the business. That’s why your designated transformation leader(s) must bridge the gap between culture and technology — a responsibility that's becoming more of a requisite in CTO, CIO and product manager roles.

Technology That Sparks Transformation

The following four technologies are transforming businesses in 2020:

  • Data science
  • Artificial intelligence and machine learning
  • Automation
  • Cloud computing

Consider these to be your four technology pillars, as each one has a role in shaping business for decades to come.

Data Science

Centered at the very heart of all things digital, data science enables you to optimize the specific journey of each customer, while also mapping your internal processes. 

Artificial Intelligence and Machine Learning

In 2020 and beyond, artificial intelligence and machine learning are necessary to enhance and personalize each customer's experience. Machine learning is quickly moving the role of data from top-level insights to actionable tasks to produce more memorable encounters with brands.

Automation

Digital transformation is about creating a new normal, and automation ensures consistent efficiency for internal processes. Automation technologies such as intelligent automation and robotic process automation optimize key internal processes, which makes a big impact on how work is passed along throughout the company. 

Cloud Computing

Remember that with digital, your demand could significantly and unexpectedly grow at a faster pace. Migrating to the cloud — the most noticeable change in digital transformations — gives you a highly efficient way to build out your digital infrastructure. 

Disrupt the Status Quo — Don’t Get Left Behind

In today's digital economy, consumers are exposed to a wider selection of value propositions than they were just 10 years ago. If your business doesn't make the shift to digital soon, it may become a question of sustainability. 

We've already seen this begin to play out right before our eyes in the retail industry. Big box retailers such as Kmart, and even Walmart, are being challenged at an unprecedented level by the speed and convenience provided by Amazon Prime.

At the heart of any digital transformation is IT infrastructure. From small software companies to Fortune 500 corporations, mainframes are filing onto servers that can be accessed on networks and hosted on the cloud. And making sure your teams have the skills necessary to start your digital transformation is crucial.

ExitCertified offers more than 9,500 IT training courses for the leading technologies that are shaping business. Review our selection of courses and certification programs from top vendors, including OracleAWSRed HatIBM and more.

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