Do digital transformations actually pay off? The data says yes. According to a 2021 report from Celerity focused on digital transformation, 64% of senior leaders and tech executives across the U.S. have seen a return on investment (ROI) from investments in digital technologies, and even more (69%) have saved money overall as a result of company investments in digital technology.
Still, a disheartening number of transformation initiatives fail (70% in 2019). Why? Bad planning and taking a wrong turn where you really needed the right one.
Integration of digital technology is as much an organizational change for a company as it is a technical one. It isn’t just the tech that’s changing, it’s the existing processes and customer journeys that are being revamped. Performing a successful digital business transformation means connecting the dots between technology and people.
What Does Digital Business Growth Mean?
Digital transformation leaders should think of business growth as their north star. Rather than just taking a physical product idea and turning it into a digital one, focus on the enterprise and the audience.
Whether it’s employee-centric or customer-facing, the technology investments a company makes must match its business objectives. In one recent instance, our team worked with an insurance-tech company to digitize a traditionally manual process. This increased efficiency and gave them better access to data, ultimately reducing healthcare costs and saving their customers money. By using business process automation to upgrade an age-old insurance system, we were able to create authentic, quantifiable business value—the platform we built even saved one of their clients 36% in annual healthcare costs.
Today, digital growth initiatives are a prerequisite for success. If you don’t find a way to leverage technology and create new business value, another company will. Strategic technology investments can provide the foundation needed to disrupt the market rather than fighting to keep up with tech-savvy competitors.
How to Create a Digital Transformation Strategy
When approaching a growth initiative, Arcweb Technologies CEO Chris Cera suggests that companies “go slow and go in stages”. Here are some steps we recommend for creating a successful digital transformation strategy.
1. Establish Your Mission
First and foremost, you need to identify the key factors driving your digital transformation. Are you looking to diversify your revenue streams? Do you need to align with your industry’s push for better interoperability? Maybe your data analytics reporting needs a refresh. Whatever the case, have a clear yet flexible vision of what this transformation will accomplish—and don’t be afraid to think big. Organizations that don’t hesitate to rethink how they engage with their customers and employees will have a competitive advantage.
Clearly defining your objectives will also help you develop a solid business case. A strong digital transformation process will have support from various stakeholders and can prove itself against oppositional forces and blockers. Without a sturdy business case for your transformation, you may find it difficult to get support.
Figure out exactly what you want your business outcome to be, communicate that decision clearly to your team, and let it be your guiding principle from now onwards.
2. Assess Your Current Situation
A shiny new integration or nicely designed tech stack might look impressive, but are the tools actually serving your people?
It’s important to center your business transformation efforts by taking a fresh look at your employees, your customers, your suppliers, even your partners. What do they need? The needs and expectations of your stakeholders should inform your processes. Keeping up with trends and new technology is important, but the only smart way to adopt technology is with your people at the top of mind.
It’s also important to get an overview of your existing digital processes and how they’re functioning. Which processes are most important to people? What major pain points are people experiencing? Are there tools that are being underutilized? If you can pinpoint the parts of your business that are working and the parts that aren’t, you’ll be better poised to make smart adoption decisions.
3. Determine the Resources You’ll Need
Do you have the team it will take to perform a digital transformation in-house or will you need to consider a third party? Depending on the type of initiative your company enters, you will need various types of expertise. Ideally, you’ll have a highly skilled, cross-functional team that has the credentials and industry knowledge to make your transformation work. If you don’t have all of those skills in-house, consider what outside resources you’ll require to meet your goals and weigh your options.
How much you spend on a transformation initiative will vary depending on the scope of work. You’ll want to design a budget that can allow you the flexibility to make real change and over time and produce a measurable ROI. (And if you’re working with outside partners, it’s very beneficial to include them in your timeline and budget discussions—the last thing you want is to commit to a transformation before you find out whether it’s feasible and realistic.)Remember to go slow—you’ll need to set a realistic timeline for your transformation so that you can take the time you need to do things right the first time. It takes time to plan and perform an accurate and sustainable digital transformation and you will likely have to adjust and make strategic changes along the way.
4. Build Your Digital Business Transformation Strategy
The final key to a successful digital transformation is well-defined, mutually agreed upon processes and goals.
It’s critical to define KPIs for each phase of your transformation and make those metrics clear to everyone involved. This will ensure your transformation team can measure technology changes in a way that directly addresses company objectives. Organizations might not see ROI right away, but if you hold your team accountable, you’ll be able to see a clear path to success.
Making data-driven decisions will help your team succeed. Use market research to determine which tech strategies will achieve the desired outcomes. Once you’ve identified the right channels, determine out how these strategies can be scaled across the enterprise.
If there is anything 2020 taught us, it’s that you must be prepared for external factors that are out of your control. When creating your strategy, make sure you allow for flexibility and agility. We’ve all seen the mass transition to remote work—let that be an example of an unforeseeable structural change to your industry.
There are other external factors that you might be able to see coming if you’re paying attention. Are there regulations you’ll eventually need to comply with? Perhaps there are cybersecurity considerations that will exist in 2 years that you should prepare for now. Throughout this entire process, focus on the future.
Will expanding your digital capabilities help your business grow?
Digital transformations have the potential to create sustainable business growth for virtually any industry. You might even find value in your strategy that you didn’t plan for: consider how many healthcare organizations saw massive benefits in the last two years from having already undergone a digital transformation that emphasized telehealth.
That doesn’t mean you shouldn’t have a clear vision for your transformation, however. Set your sights on specific objectives. Avoid throwing technology at an organizational problem rather than solving the issue itself. Remember that integration of technology shouldn’t be a spectacle for your audience: the changes should result in purposeful business value.
From a CIO to a single UX designer, there can be several champions of a digital business transformation. You can build or buy the best digital tools for your organization and bring in talent that can make them work for you. Whoever is leading your digital transformation should have a strong comprehension of the company culture and be prepared to manage several overlapping projects. As they conceptualize what the transformation initiative will look like, it will become more clear which areas of expertise are necessary to bring in.
Make Your Digital Transformation Happen
You’ve put in the work, you’ve established buy-in, and now it’s time to make your plan a reality. But before you start diving into strategy, it’s worth considering whether you might benefit from a consultation or assessment from a digital transformation expert.
Companies like Arcweb have experienced teams, proven methods, and long track records of success planning and executing business transformation projects. That can make the difference between a partial success and a true digital transformation that will drive new revenue and new growth for your company for years to come.
If you have more questions or comments, feel free to contact the digital transformation experts at Arcweb.