Digital Transformation: the key pillars, positive outcomes and pitfalls
Digital plays a key role in the day-to-day communication and operational aspects of nearly all businesses. If you are planning on implementing a Digital Transformation strategy; the way you implement it will be key to your company's success in both these areas and, as we will see, permeates the entire company. The points below are what I feel it is important to understand. You will probably hear a lot of hype. You may even have a set opinion already, but you'll want to avoid the pitfalls and understand the real benefits a company can expect from such a strategy.
Following in the footsteps of Omnichannel & Digital First, “Digital Transformation” (DX) is the latest buzzword consultancy firms have been promoting as the key to a successful business strategy. Corporations and companies alike need a digital transformation strategy. A mature Digital Transformation strategy can have a highly positive transformational impact on most parts of a company.
The benefits of digital are undeniable, providing businesses with key internal and client facing solutions; this can cause a complex environment for companies to manage. Unfortunately, many companies, either through lack of knowledge or inappropriate advice, simply buy or build IT/Digital systems. The far-reaching ‘transformational’ outcome expected to infuse innovation, speed to market, improved customer experience, etc. remains an unachieved line from the sales pitch.
As the name infers, we expect Digital Transformation to transform the company, but people often forget the actual target is to transform and provide a better experience for your customers. As with all strategies, companies (should) define the expected outcomes and KPIs; ensure they have the means (resources, systems) to track and monitor their expected impact across key systems. DX also requires full backing of the management team & board. A coherent company-wide communication explaining the programme in simple terms; the expected outcomes, how each employee can contribute to its success will be highly beneficial.
Key Pillars of a Successful Digital transformation
Dedicated budget, C-Level support & Team
The project needs a clear approved budget with a clear sponsor, owner and Single Point of Contact for the project/programme. The budget needs to be approved by the CEO and CFO. At C-Level you will expect the project to be instigated by the CEO sending a powerful message, with support from the Chief Information Officer & Chief Technology Officer. Include the CEO and C-Level in scheduled gatherings/checkpoints to stress the importance and urgency of the program, not just managers and directors. Often a Chief Transformation Officer or Head of Transformation Office will head up the core team (whether you need both depends on the size of the company/programme). It is also common for a Chief Digital Officer to lead such a project.
A Digital Transformation programme needs a dedicated/core team, with people who cover the business needs (Product Owner type role), technologists (who understand technical needs / specificities), PMO (programme/project leads). You will need Business Analysts, as well as Research, User Experience, User Interface (Creative) and Quality Assurance experts/teams. Several experts per team may also be necessary for larger programs split across multiple teams.
Clear communication throughout the company
Ensuring that you have the backing for the transformation programme at all levels of the company will provide a smoother transition. It's crucial to explain the process and goals of the program to ensure every employee understands its importance and increase employees' motivation to back it. The expectation is that Digital Transformation will improve Customer Experience, and often requires a cultural change and the full support of the people. They are at the centre of the shift required for change.
MVPs
The CEO/Leadership Team should back and instigate successful Digital Transformation programmes. Consistently monitoring and tracking both progress and meaningful outcomes / KPIs along the way. As digital is a key part of the project, a common approach is to target an MVP (Minimum Viable Product). The size of a programme may lead to sets of MVPs or staged approach that provide usable and testable outcomes. You can define the MVP by assessing feasibility, the effort required to achieve functionality, with the importance of the outcome and the time required to deliver. The PMO can provide support, and implementing Agile with set sprints is one example of how to work towards a meaningful MVP. This an approach can help provide both MVPs and incremental improvements that are both more meaningful and demonstrable.
Systems & Standard Operating Procedures
In order to operate efficiently, the DX team will need specific systems in place to operate, track & report progress. The team will also require specific systems in place (notably digital ones) as the backbone of the DX programme outcome(s). It is interesting to look at ways systems can help both improve Customer Experience and support employees being more efficient. Automation is less error prone once properly tested and can free up time for both your customers and your employees.
The company’s Standard Operating Procedure (SOP) will need to be updated to include the new tools, systems, and expected changes within customer interactions. The new processes and tools will be beneficial for client-facing employees, and they will receive training to assist them; so that they can improve Customer Experience.
People & HR requirements
You will need digital savvy people across the spectrum of your company’s departments, business and operational units. It may not get as bad as the blind leading the blind, but you need various check points throughout the project to avoid misdirected efforts throwing you off-course. Be careful if you plan to hire ad hoc consultants; the DX core team culture, as well as the company culture, is an important catalyst of the project success. You need an efficient, collaborative and positive atmosphere that spreads out to influence the rest of the company. Selecting rising stars, creative, clever and skilled people from within who lead the different parts of the programme can motivate teams to excel. Favor Innovation, new ideas, testing, success stories. It is important to communicate positively across the company to all employees about the programme, with easily accessible information to ensure the same confident and optimistic message is being shared with everyone. It is important to show employees are being trained and upskilled across the company. This will allow you to avoid people thinking DX will take their jobs. You will probably discover missing skills through Gap Analysis activities.
Gap Analysis Across key roles, areas and systems
One of the best ways to ensure that you are in good shape across the key roles required is to engage in a thorough gap analysis. Do you have the right C-Level support with digital savvy people, with the right skills? The same applies across all key departments, BUs and operational units. Do you have the right systems in place for the programme/project and the core DX team for them to get their job done? This needs to be a reality check for the company. Underestimating what is in place and what you require can be perilous and put the programme in jeopardy.
Customer Experience
Throughout the Digital Transformation programme, a key outcome needs to be the improvement of Customer Experience (CX). It should be frictionless throughout the customer journey. Setting CX improvement as a mantra across all the teams, departments, and leaders involved is essential. Through surveys, research, and user testing, specific milestones need to set. They will ensure the designs, work, MVPs etc. are achieving excellent results with actual customers. You do not need to wait for the final version of a product to test the Customer Experience, nor should you be testing everything. The aim is to find the right balance to ensure you are achieving the KPIs that were set for the programme. It’s important to look at the way you improve CX across multiple customer touch points, not just focusing on one.
Digital Transformation, its positive outcomes & its pitfalls
Spreading the DX spirit throughout the company
Digital Transformation aims to improve the quality, quantity, and speed of products and services delivered to the market, as well as the customer experience. This means upskilling and training personnel to use more efficient delivery processes. Providing employees with the knowledge and skills to ideate, define, test, build, monitor, automate (incl. QA) and deploy products/services faster and more efficiently than before.
During these steps, Customer Experience needs to be checked at key milestones. Throughout the project, it is good to ensure they transferred the key skills across the company. This will help speed up the Digital Transformation programme itself. It also serves as a catalyst for its positive impact on the company in the future.
Bringing key departments together to define the DX strategy helps surface gaps that may exist between expectations regarding digital and system maturity. It can also help define the budgetary implications of the Digital Transformation programme’s framework. I have worked on projects where mega databases / data lakes were not compatible with the systems we needed to build. Catching this type of issue early on allows you to mitigate such factors, plan around it and either create a temporary solution or potentially a micro-service that transforms the data appropriately. It is important to focus on a more modular system that can grow with changing client needs. Building more monolithic systems will not support you in constantly searching to improve customer experience.
Digital Transformation projects that succeed result in positive cultural shifts within the company, not simply thanks to improved Customer Experience. It is fulfilling for the DX team and company alike to
Pitfalls
Both digital leaders and company experts should be present during key milestones of the project. For instance, creatives and sometimes technologists with a creative streak can overlook security. In the search of a great idea, you need to make sure that checks and balances are in place.
It is important to have key people review any blockers. Promote innovative and alternative solutions or approaches rather than just shutting down a good idea, point-blank if one aspect of a suggested approach of a product or service is contentious.
One of the biggest mistakes I have seen is where clients bring in expensive consultancy companies that deliver none of the above and simply provide you with a hefty report with some valuable insights, but that will just sit in a drawer or on a shelf. You’ll realise later on that you need another company to help you run and deliver the Digital Transformation programme. That same consultancy company will say they can monitor the company you select to do the Digital Transformation work and mainly interfere or create unnecessary friction between the teams because they have little to no knowledge of the actual implementation and deployment of successful Digital Transformation projects and need to justify their exorbitant cost.
The other situation I've experienced within companies I have worked for, is team friction caused by consultants simulating DX experience. The team will gradually realise the person has never done this before.