How to Think About Digital Transformation
2020 has been a landmark year in terms of digital transformation, as many businesses were forced to go partially or fully online in a matter of weeks starting mid March. For those of you who are in the process of working on making your business more digital, we at Destination Digital wanted to give you a view on how we approach the building of a digital transformation strategy.
Why do I need to digitally transform?
Digital transformation is now a strategic question for every business, but that doesn't preclude from starting by answering the question: Why? Why are we going more digital? Is it to increase sales? To foster better customer engagement? To reassure our investors? To reposition our brand? To attract younger talent? Answering this question helps define the qualitative and quantitative goals by which you will measure the progress of your digital transformation, as well as what you will communicate to your teams who will be undergoing a major change in their day-to-day at work as the process unfolds...
Who are my customers and where do they live and breathe in the digital world?
The first task to work on when starting on this process is to make sure you have deep knowledge of your customers, especially around their wants and needs in the digital space. Are your customers young, and mobile first? Are they businesses who are constrained by the IT rules of their organisations? Are they visual people who want to see your products on a bigger screen? Deep user research will help you clarify who you are serving and how best to address their needs from a digital perspective.
What is the market doing?
At the start of every strategy process, it is important to have a clear view of what the key trends are in your market, and key innovations likely to impact your sector over the coming years. All the more so with digital strategy, where the changes in technology are increasingly fast-paced and can disrupt organizations in months (as we have seen this year, with the preponderance of Zoom over our office communications for example). Who are the key players? What are the key technologies? Which area of your business are they likely to impact the most? Mapping these players and trends will provide a clear view of the positioning strategies that can be optimal for your digital plan.
What is my roadmap?
Once the user research and market analysis have been completed, you have the building blocks in place to come up with a plan. And that is what a roadmap is, essentially: a plan to build products and processes that will create an overall digital experience for the company. Your roadmap can be drilled down in different levels: what are the key areas of transformation (customer experience / sourcing and supply chain / employee experience / distribution / data / etc.), and for each area, which are the key projects you want to move forward and products you want to build? Your roadmap is a tool to organize your next steps and communicate your plan to the wider organization.
What type of tech team and infrastructure do I need?
Once you have built your roadmap, this will generate decisions about the technical infrastructure you will need to build (or expand from your existing one), and what kind of technical team you will need to support your plan. Is your infrastructure already fully in the cloud? Does it need to be resized to support a greater load of digital queries? Do you need to build a new data architecture to support your data analytics goals? Do you already have an in-house team of engineers and technical operations specialists, or do you need to hire one? Can you outsource part or the whole of this team? What technical software tools will you need to invest in? All these questions will determine the type of investment that will need to be budgeted for your digital transformation plan.
How does my organisation need to evolve?
Digital transformation also implies having a plan for change management: a number of different skillsets will be required, new processes will have to be put in place, old products and processes sunsetted... Do you have the right human resources to cover this change? What type of training plan needs to be constructed to bring existing resources up to speed? How do you organize the transition between the old and the new? This is often the part of a digital transformation process that is vastly underestimated, and that represents the greatest threat to success. Making sure that this component is taken into account in your plan will help smooth the transition and engage your employees to support this major change to the company as a whole.
What are my KPIs?
Going back to the goals we mentioned in our first step, we want to be able to measure the success of our digital transformation through well defined and communicated KPIs (Key Performance Indicators). Whether it is measuring the rate of progress against the general plan, how the changes are impacting sales and the company's bottom line, the evolution of customer and employee satisfaction, the impact of the plan on shareholder value, defining your KPIs early in the process will drive your results and make the whole organization accountable.
A digital transformation plan is a major endeavor for any company, and requires careful planning and organization to be successful. Going through the steps detailed above allows for a thoughtful process to be put in place and is the best guarantee of success!