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Digital Transformation Strategy: The Definitive Guide [2017]

Get a handle on transformation.

Author: Jake, Marketing  
  
Last updated: August 30, 2017

The degree to which businesses can approach and succeed with a digital strategy is an extremely hot topic.

Why?

Because the means to which they can implement an effective digital transformation strategy will heavily dictate their ability to outperform their competition.

Through our learnings, and reliable in-depth studies of the winners and losers of business transformation, we’ll provide you with 10 actionable tips that could lead you to the top.

The tips can be used as ammunition to put resources in the most beneficial areas.

Digital Transformation Strategy Infographic

In addition to the common pitfalls and industry specific suggestions that are placed below – this infographic summarises 10 essential tips to enable a results-led digital transformation strategy:

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We hope this graphic has given you some actionable tips to start creating your digital strategy.

But the good times don’t stop there…

Below you will find those 10 tips with more resources, some industry leader’s thoughts on the subject and much more.

What is a Digital Transformation Strategy?

In order to contextualise the different thoughts around this topic, and the reasons for successful digital transformation examples – let’s get onto defining this school of thought.

Transitioning From Old to New

More than ever, traditional businesses know that they need to become digital to keep pace with an increasingly fast-paced, mobile-first culture.

However, with people expecting fast, seamless and secure interactions, this often manifests itself in more trivial matters, such as the desire to launch a new application.

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But what would be the purpose?

Would it be used to make your workforce mobile or would it simplify your customer’s journey?

Herein lies the difference between a technologically savvy company and a truly digital business.

Varying Perceptions of a Digital Strategy

As is the case with many factors around digital disruption, the means in which individuals perceive a subject, impacts their involvement.

When it comes to their beliefs around the concept of digital transformation strategies, this Microsoft study is incredibly telling.

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The data splits the thoughts of the respondents into different categories, namely: industry and position. This is then all collated together to create on overall graph.

The various means in which they could articulate digital transformation are as follow:

  • Customer-facing technology initiatives
  • Technology enablers across the organisation
  • Technology innovation/experimentation
  • General overhaul of the business model
  • Data, analytics and IoT initiatives
  • Synonymous with IT / IT department
  • Employee empowerment/collaboration
  • None of these or Don’t know

Firstly, in looking at the image data from a industry perspective, it appears that those who are more directly tied to commerce, understand the concept from a ‘customer-facing’ approach.

Equally, they also therefore believe this was more over a ‘general overhaul of the business’ as compared with others.

Not surprising, when those in a business function were compared to those in technology, the latter viewed areas such as analytics, and other technologies far more relevant.

Digital Transformation Example: Amazon

When applying the beliefs above, it is incredibly beneficial to apply the theory to real cases.

Such as…

Well, there is no better example of digital transformation than one of the most well-known digital retail giants, Amazon.

Having successfully kept pace with an ever-changing digital culture, very few remember that they were initially just an online book-store; they even revolutionised the way people read books with their iconic product, the Kindle.

As such, throughout Amazon’s journey from an online book-store to the digital retail giant they ­are today is one overwhelming theme – understanding their customer’s journey.

They continually align their activities towards an inclusive digital transformation strategy that will be give them the greatest benefits.

Banking on a Great Digital Transformation Strategy

It is fast becoming apparent that every successful digital transformation has one central constant – customer journey. This is not a new concept, but what has changed?

It’s no longer enough to know about your customer’s journey, you need evidence that you understand it.

A compelling example of this approach was adopted by The Telenor Group who took the decision to open Serbia’s first purely mobile bank; Telenor Banka.

This disruptive newcomer, to what was considered a saturated sector with 29 banks covering corporate and retail segments for a population of just over 7 million, exceeded all expectations. With more than 100,000 people opening current accounts in their first year of operation, they became the fastest-growing CEE in Europe.

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In an industry, renowned for out-of-the-way branches, long queues, and mountains of paperwork, one of their marketing slogans was “Visit friends, not branches” with a tagline of “Simple. Safe. Anywhere”.

Quite simply, they knew their customer and understood that they needed to market lifestyle, not technology.

In the words of their CEO, Ingeborg Øfsthus, when asked what they were doing differently during an interview:

“What we want to do is make banking about simplicity and the customer journey…”

It wasn’t just technology that created the dramatic entrance of Telenor Banka into the Serbian market; they set out to deliver a service which was simpler and accessible to all, anywhere – technology was the enabler.

In addition, this example perfectly demonstrates the argument made above – that these types of strategies can push you past your competition, and enable you to have ‘sticky customers’.

The type that stay with you.

Do you have a Strategy that Fuels Digital Transformation?

Having established the various approaches and examples of digital transformation, let’s get into the matter of having a ‘clear or formal’ digital transformation strategy.

Like many issues of organisational behaviours, there are two essential parts:

  • The matter of doing the act
  • Correctly articulating it

However, you can see that less that 25% [mostly less than 15%] of individuals strongly agree to their organisation’s stance on this front.

While this may just seem like a lack information, in reality, if employees don’t clearly feel like a digital strategy is in place, they may feel that the organisation is not willing to invest in the future.

Therefore, matters such as accelerating business critical models may not be made more efficient, thus stagnating the organisation.

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10 Proven Digital Transformation Tips

Having now demonstrated the gaps in how organisations fail to represent a clear digital transformation strategy, this section will look at the different ways organisations are exploiting the benefits of digital transformation.

In addition, we’ll highlight the 10 actionable tips that can be used to help create a culture of success.

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Starting off with this graphic, you can see that customer experience is again a very high priority for businesses.

However, there is a need to change the approach and manner in which a company can be agile.

More than ever more, organisations need to be willing to change revenue models, products, distribution, and at a rapid rate.

To do so, you need an IT function, and a culture that understands the importance of being willing to innovate and attempt to succeed, while acknowledging that controlled failure is very much an option.

As part of any strategy, risks have to be calculated, but the ability for an organisation to just spin up a VM, and see how a current business applications could behave when scaled is really important.

These minimal cost activities can provide some real feedback, while starting to create businesses cases.

Without further or do, here are the 10 tips that we think will enable you to create a successful digital transformation strategy.

1. Understand What is Driving the Need for Change

Firstly, it is important to understand the key trends for your market, both from the perspective of products, and the technologies that are being used.

These tend to be intertwined, whereby solutions like HPC have enabled great advances in data, which have translated to great commercial possibilities.

As such, there will be certain key movements that need to be tracked over time. Whereby leadership needs to make bets, and be willing to change them upon new data.

We’ll talk more about this in contexts of different technologies later on.

An example that remains relevant was one provided by Mark McDonald in 2014; he states the following:

“A company that feels digital will take CRM tools and just make them available on mobile devices. That may untether account execs from the office, but that doesn’t change the underlying ways they work. They’re not providing a different or better customer experience. They’re just more mobile.”

He went on to provide a contrasting example: a company analysed the history and interaction between their account executives and customers across many different communication channels.

The result: now when a customer calls, the company’s call-routing software recognises the number as an active account, looks up the account exec, and routes the call to him or her directly.

The company leverages their digital platform to help the account executive be more human and accessible to the customer, thus doing a better job.

He finished his comparison with the following observation:

“Another company would have put that information online and made customers pick through an online profile, but that’s not being a digital business.”

This represents the difference between seeing digital as a technology, and see digital as a new wave of business.

2. Ensure your Leadership is Digitally Competent

Second – as was noted earlier, the starting point for digital transformation is from a board level. However, it seems to be that the role of ‘digital’ cannot merely be shared.

There must be an individual who leads this front.

Whether that be a CDO [chief digital officer], or a CEO that puts their weight behind this, there must be a single person with whom is known for this.

This is being so highly valued, that certain new CEOs are being required to approach their responsibilities from this perspective.

3. Empower your People

Empowering staff has to be done from a few perspectives:

  1. A consideration to improve their capabilities
  2. Creating an environment that enables them to build upon an existing digital transformation strategy

With the latter in mind, it is valuable to undertake persona qualitative studies at organisations, whereby one can look to understand the real desires of staff.

Thus, learning what they believe to be their biggest limitations.

Through doing so, you will be better placed at comparing your activities to desired objectives.

4. Become Data-Driven

Leading on from point number 3, there is no value in becoming digital for the sake of it.

All activities should better measured.

In-fact, Eric Schmidt, president of Alphabet insist that all meeting begin with metrics.

Granted, there may be the objective of ‘staff collaboration’, however one needs to ensure that these aspirations are tied to measurables. In this case, that may include hours spent in tools like Microsoft teams.

5. Be Flexible in both Strategy and Vision

The value of being data-driven means that you can continually assess the success of an IT project. With this at hand, your are able to leave digital strategies that are failing.

It is therefore critical that those in the upper echelons of organisations not only understand, but take on the responsibility. It is important to note that being flexible doesn’t necessarily mean that a failure has occurred.

There are always new opportunities around technologies and events that could completely overhaul your business if utilised correctly.

Without being so nimble, the odds of a successful digital transformation strategy are heavily weakened.

6. Embrace the Cloud

The cloud is the perfect weapon for impactful digital transformation.

With limited costs, organisations can empower teams to experiment, innovate and learn. Equally should success occur in one of the innovations, the ability to scale it can occur with absolute ease.

In addition, organisations can create ‘quick-win’ digital moves through taking legacy processes, and exploiting the infinite power of the cloud, and turn existing successes into a new world.

7. Experiment with New Business Models

Like all periods of business change, traditional models find themselves questioned.

This include revenue models, customer relations and all aspects to which companies consider ‘standard practice’.

While it is not exactly appropriate for a 100 year old bank to overnight become a digital-only organisation. Whereby existing clients associated them with the old practices, and you risk alienating people.

With that said, in order to compete with challenger banks, they need to offer more modern services. However, it isn’t enough to just create an application and consider yourself digital.

In the event that they are no longer getting value from going into branches, you must entirely rethink your engagement with them.

How can you provide a platform that enables them to do something they can’t currently do.

As frequently touted:

“What got us here, won’t get us there”.

8. Be a bit More Paranoid

When businesses start to become comfortable with their market position, their offering, their customer loyalty – they start to take their eye off the ball.

If they continue to question and probe their practices, they can begin to find unearthed gems. Because, you can be sure, there are plenty of organisations that are questioning the norms, creating strategies that are so obscure – but some will pay off.

Be more paranoid, and your digital strategy will start to come together.

9. Forming a Digital Roadmap

Perhaps the difference between being a company that uses technology, to being a digital business starts with a simple change of perspective.

Instead of viewing digital as a thing, we should see it as a way of doing things.

That change in mindset will allow you to consider what the next 5 years could look like. With this at hand, you can start to form a roadmap that prioritises data-proven areas, while giving great room to be flexible.

Now that starts to form the grit of a digital transformation strategy.

10. Ask Customers

Lastly, while the opinions of your senior executives should help create a process of change – don’t forget the most important opinions.

Famously Brian Chesky, AirBnb, choose to ask his customers what they would bring to the product, and with their detailed responses, he was able to build a clear roadmap, or features.

It is through the continuously iterative communication with your customers, that you can start to solve their problems, rather than spontaneously create a solution.

Technologies for a Digital Strategy

Now that we have looked at the process of digital transformation from the eye of an overall strategy. It is valuable to understand the types of technologies that can get you there.

While we strongly advise against technology for technology’s sake, it is helpful to understand trends – as per tip #1.

This research shows that the technologies that look to be more significant over the next 3 years are the ones with the most concrete evidence of value.

The benefits of cloud computing and data analytics can have proven to create enormous benefits to organisations.

However, despite the market buzz, ‘robots’ and ‘3D’ printing haven’t reached market use. This tends to come down to matters like cost and customer readiness.

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Moving onto this bit of research from Gartner, they choose to categories the various tends into 3 key areas: intelligence, digital and ‘mesh’.

What you can see from all the research of the various strategies surrounding digital transformation, is that there are so many forms of the ‘new’.

Here’s the deal:

As an organisation, you must initially focus on output, and business objectives, the various tactics can be considered thereafter.

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Common Pitfalls

The reason that these types of article exist, is that despite the wealth of information on the topic, companies are seriously failing with regards to digital transformation strategies.

Now, from our perspective, part of the process of transforming is to give the room to fail. To learn. To consider.

But there are certain circumstances that are stopping companies from even beginning the process, and that is very troubling.

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When you consider elements like ‘investment in legacy systems’ you see that the move to embracing cloud computing really is a necessary base to progressing with various technologies.

In addition, there is the all too common paradox, whereby slow decision making and unwillingness to rethinking business models is provided by the same leadership who began the process of digital transformation.

Conclusion: enabling a Digital Transformation Strategy that works

Technology alone will not drive a successful digital transformation of your business; there needs to be a clear intent.

Transforming organisation, processes, and technology will make you a technologically savvy company and perhaps even ready to become a digital business.

The simple truth is this;

Experience is key in a digital world where customers are well-informed, have more choices & trust their peers.

From their mobile or tablet, to their laptop, to a phone call to customer service – they need to experience the power of digital as an enhancement to their experience, not a replacement of existing methods.

With this in mind, you need to consider:

10 tips for a Successful Digital Transformation Strategy

  1. Understand what is driving the need for change
  2. Ensure your leadership is digitally competent
  3. Empower your people
  4. Become data-driven
  5. Be flexible in both strategy and vision
  6. Embrace the cloud
  7. Experiment with new business models
  8. Be a bit more paranoid
  9. Forming a digital roadmap
  10. Ask customers

When that happens, you will be an efficient digital business.

Lastly, if you have any questions or thoughts on these tips to a successful digital transformation strategy, please make sure to note them below.

Topics: Data Science, HPC, Big Data, Machine Learning

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