Taking a company through a digital transformation can seem like a daunting prospect for legacy companies that have operated under traditional business models. At the same time, no business leader who wants his or her firm to survive the effects of digital disruption can manage to flourish without change.
In the planning phases of digital transformation, business leaders should ask the following five questions to prepare themselves and their teams for the smoothest possible transition to digital.
1. Which approach to digital transformation is best for my company?
For the best results with the least growing pain, planning and organizing the transformation to digital should be thoroughly thought out. While all digital transformations are undertaken to meet the same operational end, each individual business must choose the approach that works most efficiently for their business model and financial capabilities.
Company leaders may prefer to take a convergence approach, in which one executive is responsible for the orchestration of all digital transformation initiatives. He or she also consolidates key company assets like data, employees, and management processes in order to streamline them. Other firms may be best suited to a coordination approach, in which digital transition efforts are led in smaller groups without initially changing the organizational structure. This helps to reduce the amount of operational disruption the company experiences.
Still other leaders may prefer to digitize from the outside in, creating a digitally transformative spinoff business to supplement the existing processes of the legacy business or to provide a digital service the legacy firm is not equipped to offer.
2. Have I analyzed my consumer decision journey?
Technological development has radically altered not only the way consumers research and purchase products and services, but also how they interact with brands. This shift in behavior and the digital transformation goal of enhancing the customer experience means that companies looking to make the shift to digital must consider the consumer decision journey.
To do this, company leaders must first analyze the current way that their client base reacts to a product or service through the lenses of expectation, experience, and reflection. Studying a customer purchase path prior to digital transformation can help executives identify and resolve customers’ points of difficulty and dissatisfaction. It can also draw attention to ineffective internal processes.
Performing this research allows leaders to gain the insight necessary to understand where digital transformation can make changes that will lead to better relationships with customers.
3. Do I know how to use Big Data to its full potential?
Statistics from just four years ago show that less than a quarter of businesses rated Big Data as “of critical importance to their firms.” Today, that number stands at 70 percent, with over 60 percent of firms indicating that they intend to dedicate more than $10 million to Big Data investments by next year.
Still, recognizing that Big Data is a crucial part of business in the digital age and knowing how to leverage Big Data to its fullest potential are not the same thing. Leaders looking to make a comprehensive digital transformation must identify how best to collect, analyze, and leverage information to improve operations.
Some firms make the mistake of simply adopting the strategies used by other companies, but this is a mistake. Your business needs to identify and develop ways to mine the data sets that prove most useful to your company’s unique short- and long-term goals.
4. Am I planning for a digital transition, or simply a digital upgrade?
One misconception among legacy companies that have operated under traditional business models is that technology upgrades are the key to a successful digital transformation. While upgrading your business’ IT systems and software is an important part of the process, this change is not the main purpose of taking a company digital.
When planning for digital transformation, business leaders must ask themselves if they are only planning for a technology upgrade, or if they are envisioning a complete overhaul of processes in order to create a more productive, streamlined operational system that enhances the customer experience.
Digital transformation is about making your business adaptable in the face of disruption, meeting customers’ needs with more speed, and eliminating inefficient internal processes to optimize workflows.
5. Is my IT team equipped to handle the coming changes?
Digital transformation requires your in-house IT team to take on a much broader role within your organization than ever before. Rather than focus on projects exclusive to their own department, your IT employees will need to collaborate on projects within other departments to make processes more agile. This can be a difficult switch to make with regard to time management, as digital transformation projects may be more focused and faster-paced than more traditional, broad-scale IT projects.
Company leaders should look at IT teams and identify the best ways to strengthen their skillsets. This may include advanced training or education, open communication about how IT will drive the success of a digital transformation, or the addition of new talent to boost the team’s capabilities.