The Challenges and Strategies Behind Digital Business Transformation
Organizations everywhere are looking to technology leaders to deliver a digital strategy that drives business growth. See how transformative change can help your company succeed both now and in the future.
Organizations of all sizes throughout the world are united in a conversation around a single topic: digital business transformation. While it may mean different things to different people, leaders everywhere see the value that having a solid business technology structure in place will speed time to market, optimize efficiency and improve the overall customer experience — ultimately leading to improved sales, business growth and reduced costs. However, there are significant challenges that must be overcome throughout any business transformation project, and having a solid strategy is the first step towards a successful effort.
Whether it’s an initial push to go paperless in an office, or an upgrade of legacy ERP or other software, going digital is gaining steam for companies. A recent Gartner study noted that CIOs intended to spend nearly 30 percent of their budget on digital transformation in the next year, a staggering number that clearly indicates the upfront costs associated with moving through digital transformation. It’s expected that this number will sustain for several years, as organizations look to transform the way they do business and embrace the new technology that is allowing startups to thrive. Smart CIOs recognize that upgrading technology without business intervention is not going to take the business where it needs to go. Instead, the strategy should be the driving force behind the digital business transformation.
The Role of Strategy
A strategy is a key driver in the digital arena, with companies needing to take significant risks in order to obtain the huge payoffs that come with a digital shift. Leaders who are able to foster a culture of change throughout the organization are more likely to be able to gain buy-in on a strategy to re-imagine the business from a technical perspective. Adoption depends in large part on where the organization is in their digital maturity: more mature organizations tend to have a more robust strategy, while those just beginning the journey of digital transformation may start with a small sub-section of the organization and place their focus there. The learning from companies who are able to make the leap is that if your organization is able to support the rapid change necessary, broadening the scope of your transformation efforts — in concert with a clearly defined strategy with executive buy-in — will accelerate change and provide you the best opportunity for success. Perhaps the step that can be most challenging to organizations who are attempting to develop a comprehensive digital strategy is to prepare to sunset operations or business processes that no longer fit with the core competency and future vision of the company.
Where Strategy Resides
Employees are actively looking for organizations who are willing to support strategic risk-takers and are likely to flock from companies where the measured risk appetite is low or nonexistent. Hence, a detailed and comprehensive digital strategy is critical to ensure the success of any business transformation initiative. That begs the question: Where does this strategy begin? In the technology side of the business, or within marketing? There can be arguments made for the strategy to be driven on either side of the business, but what is evident is that CIOs are finding their jobs changing significantly and a tighter partnership with their CMOs. The continued integration of intelligent machines and advanced analytics require CIOs to look beyond simple delivery of business needs to the holistic customer experience across various channels.
Prevalence of Analytics
Another key factor for success is ensuring that you have a spotlight locked onto analytics and a firm understanding of how to make them measurable and actionable. Many strategic initiatives have been derailed due to too many data points that pointed leadership in the wrong direction or sent mid-level managers scurrying after unattainable goals that didn’t impact the core of the organization. When you create a stringent environment that ensures focus only on the metrics that support operational excellence in your core competencies, these numbers have the power to drive transformation to the deepest levels of the organization. For instance, look at Sprint, a large organization that has been losing ground for years to larger competitors. After years of focusing on cost reduction, Sprint’s leadership took a supremely different stance and decided to invest in technology platforms that would support an enhanced customer experience. The sheer quantity of data generated by an organization of that size can be staggering, but with terabytes of data to wade through the team was able to determine where operations could be tightened from a transactional perspective. This includes everything from improving the online buying proposition to reducing system glitches that were frustrating staff. Today, Sprint’s operations are still a work in progress, but the upfront wins encouraged leadership to stay behind the project and more teams to look for ways to consolidate data silos found throughout the organization.
Managing Technology Disruption
Any large business transformation project is going to cause disruption. However, that disruption can be carefully managed through solid support from leadership as well as mid-level managers and directors. People as a whole fear change, making clear communication of the utmost importance at each step of the process. Listening to the customer is more important than ever, as crucial knowledge can be gained simply by asking those who know and love your business what is needed to improve the experience of working with you. Part of building the strategy includes building alignment, from the needs of the customers, through the daily tasks of the individuals — all tied to the corporate goals and objectives that will bring true transformative change to the organization.
Building a successful digital business transformation strategy doesn’t happen overnight. It’s a process that involves individuals at all levels of the organization. Whether you need help starting or continuing a project of this scale or need technology in place to support your business needs, contact us today.