Home Digital Transformation Seven key ingredients of a successful Digital Transformation recipe

Seven key ingredients of a successful Digital Transformation recipe

Digital Transformation is the common buzzword that you hear in almost all discussions, events, summits and online forums these days. In fact, a Google search on this keyword can inundate you with loads of information which reflects about the popularity of this topic. As per Wikipedia, “Digital Transformation (DT or DX) is the use of new, fast and frequently changing digital technology to solve problems often utilising cloud computing, reducing reliance on user owned hardware but increasing reliance on subscription based cloud services”.

But in layman’s terms, Digital Transformation is an adoption of digital processes, technologies and tools to achieve strategic business goals. It’s a heterogeneous process that entails a big behavioural and cultural change in almost every area of an organization.

Most people tend to think that there’s a magic wand to digitally transform all businesses, irrespective of the nature of business and size, but there’s no one size fits for all. Some people also have misconception that it can be achieved by putting in new technology or tools.

Even though the core fundamentals of Digital Transformation remain the same, the roadmap, strategy and adoption varies from organization-to-organization and business-to-business.

Digital Transformation for traditional organizations (brick n mortar businesses) would be different from the Digital-First ones (Netflix, Amazon). A lot of companies are very traditional, some are a hundred years old, and transforming digitally for them is a monumental task that is qualitatively different from how a Digital-First enterprise works. At the core, it requires major overhaul in terms of business processes, technology investments, behavioural change and the way the organizations conduct business.

Having successfully led a few Digital Transformation initiatives myself, I truly believe that there are three key pillars in any Digital Transformation initiative i.e. People, Process and Technology (PPT). And it’s imperative to create an effective Digital Transformation strategy around these pillars, aligned with your organization’s goals and nature of business. The following are some fundamental steps that need to be followed for successful Digital Transformation especially in a traditional organisation.

Step 1: Digital Strategy & Transformation Roadmap

First and foremost, senior leaders need to collaborate and share their vision and commitment with the key stakeholders and help put together a ‘Digital Strategy and Transformation’ roadmap. Remember, the success of all complex Digital Transformation initiatives will depend on the commitment of the senior leadership – it’s always driven from the top.

The roadmap should mainly focus on the overarching goal and enhancing the overall experience for customers as well as employees, instead of solving current problems. It should be progressive, agile and scalable to accommodate future changes emanating from organizational dynamics, business processes, other economic factors and learning from the pilot/beta launches.

Finally, the same needs to be communicated with all team members and stakeholders on a regular basis to drive the behavioural and cultural change across the organization.

Step 2: Design thinking and ‘Dipstick’ Test

The ‘design thinking’ approach needs to be adopted for future business models and new channels that emanate from the Digital Transformation roadmap e.g. online, mobile etc.

The key to success here is to focus on the enhanced and digital experience that you want to render to customers – especially the digitally savvy ones. Instead of getting bogged down with the existing constraints at both process and technology levels, focus on the experience that you want to deliver.

The main goal should be to build the enhanced experience that provides the convenience to your customers and employees – access anytime, anywhere. Just remember that the key focus area should not be the technology but on the experience that you can render.

But before committing huge investments, teams and resources, it’s always recommended to perform a ‘Dipstick Test’ through small proof-of-concept (PoCs) or pilot launches to apply the design thinking approach, instead of going the full hog and committing investments in both resources, partners and tools. Most of the time, learnings from these PoCs/Pilots help in fine tuning the overall approach and processes before the launching the final initiatives.

Step 3: Build Digital Culture

This step can be initiated immediately after the roadmap finalisation in parallel with other activities.

Identify gaps in the current organisational structure, build and recruit the resources with Digital, Analytics, Cloud and other advanced skills sets. Basically, the existing resources might not be able to deliver on the new digital technology stack. And while some of them can be reskilled, you will require resources with the desired skill set for successful transformation. If you can’t build an in-house team, explore the partner ecosystem to implement the digital strategy.

And finally, it’s crucial to build a new digital culture that would walk in line with the transformed business processes.

Step 4: Agile Delivery Model & Continuous improvement

Once you’re done with the roadmap finalisation, resource building and Dipstick Test, it’s time to focus on delivering the enhanced experience to your customers and employees.

The entire roadmap should follow an agile delivery model and be logically divided into short-, medium- and long-term deliverables to deliver continuous value to the business, justify the ROI and increase the confidence of all stakeholders.

In essence, there can’t be any start or end date to this project. The entire process and technology need to evolve on a continuous basis as per the outcomes.

Step 5: Data Lake for Single Customer View

Another crucial step is to set up a Data Lake to collect the data points from all discrete systems, channels and multiple data sources (both structured and unstructured) to help achieve the single customer view. Apart from generating the analytics basis on the data generated through customer and employee interactions, it should also be used to further fine tune the overall approach, offerings  and support continuous improvement.

Step 6: Internal Influencers

Every organisation has mainly three sets of people

  1. Ones who’re progressive, supportive, appreciate new changes and have the credibility to influence others
  2. Rigid, insecure folks with closed mindsets, who’re not open to any new change; they spread negativity
  3. Neutral employees: fence sitters who will change their opinions according to the time and situation.

While it’s important to keep all stakeholders aligned, one should put special focus on the first set of people i.e. influencers who can help spread the positive word across the organization and help remove other bottlenecks. They are very crucial for the success or failure of this initiative.

Step 7: Governance

Last but not the least, ensure proper governance and publish regular status reports to all stakeholders including the steering committee. It’s imperative to continuously raise alarms and seek the necessary support required to mitigate any risk pertaining to this initiative. The intent should be to keep everyone posted about the delay (if any) and avoid last minute surprises.