Don’t Rush into Digital Transformation Without Efficient Processes
There are a lot of articles being published on the topic of Digital Transformation, but the majority of the business community isn’t actually there yet.
Digital Transformation isn’t just a buzz word. It’s part of a specifically defined digital change cycle (more below). The important steps before Digital Transformation are often overlooked, which is why so many companies are failing to reach their Digital Transformation goals.
Focus on optimizing your team, aligning your strategies, and creating a transparent culture to build a framework in the Digitalization process before jumping into your Digital Transformation journey.
Where We’re Stuck: Digitalization vs. Digital Transformation
“The Great Digital Migration” is broken into three stages, occurring over several decades:
- Digitization – moving our data from analog to digital
- Digitalization – replacing manual processes with digital processes to automate, increase efficiency, and optimize current business strategies
- Digital Transformation – driving organizational change and customer-centric business strategy, once the new digital processes are fully ingrained into base operations
Digitization – check. To quote the 90s in which most of this occurred, “been there, done that, got the t-shirt.” We’ve reached a place as a business community where all of our work lives on computers. If you’re still keeping handwritten ledgers instead of using Quickbooks, it’s likely you’re reading business magazines instead of blogs and haven’t made it to this post to state your case.
After all our data was successfully transferred to a digital format, since the early 00s we’ve been in the midst of the Digitalization process. We’re focused on replacing manual processes done with common desktop productivity tools (think Microsoft Office) with highly specialized software (think CRMs like Salesforce). Most people think we’ve already checked this box too.
However, the jump from Digitalization to Digital Transformation is the difference between getting your technology stack in place to optimize what you’re already doing, versus actually reshaping your culture to forge a new core strategy, building on the new processes as they become the norm. (e.g. Think of how Netflix used their optimized mail-order technology to follow the customer and create a streaming subscription service instead.)
Although some companies have started their Digital Transformation journeys, we’re mostly stuck in the Digitalization Era and struggling to cross the threshold into true transformation. There are still huge gaps in optimizing manual processes, with plan execution especially.
With $1.3 trillion being funneled this year into problem-solving for leaders’ #1 risk concern, somehow 70% of Digital Transformation initiatives (a $900 billion investment) are still not achieved.
Don’t jump into Digital Transformation before you’re all the way through your company’s Digitalization process. First, focus on the following change management principles while optimizing and automating your manual processes to smooth your transition into true transformation.
4 Ways to Prep for Digital Transformation
Leaders who dive in too early to Digital Transformation fail at one or more of the following principles of change. While you’re future-proofing your processes with automation, start to make these cultural changes so when you’re fully optimized, you can make the jump to transform your business strategy seamlessly.
Focus on Teamwork
Transformation is based on people. Invest in training and staffing to ensure you have the right team in place. Make your team successful by cultivating open and transparent communication and facilitating a way to make collaboration easy.
Align Your Digital Strategy to Your Business Strategy
Your Digitalization plan cannot exist independently of your overall corporate plans. Initiatives for each are intricately connected and need to be viewed in the same space. As you’re Digitalizing and building your new technology stack, alignment will help you quickly respond; the implementation of each additional process-improving software will require auditing, replacing, and optimizing as you go. Alignment will also be key to ensure the whole organization understands exactly why the digitalization efforts are needed and the outcomes they will drive.
Implement an Automation System to Record Your Work
Too many organizations are tracking their plans in multiple spreadsheets, updated and compiled with several hours of manual labor. Perhaps your tallest order in Digitalizing your processes – invest in a system that automates data collection and provides a dashboard to measure strategic work. You need a way to compare your progress over time so you can prove ROI on investments and tie actions directly to results.
Create a Culture of Accountability and Transparency
No silos. No siloed mind-sets, no siloed reporting, no siloed cultures. Don’t allow an environment where people can hide their work (or lack of it) behind spreadsheets. Push for visibility into initiatives – all the updates, all the details, all the context – so you’re not surprised something is off track when you’re going through reports for the first time while presenting to your board. Create a single source of truth to align your organization. When it’s time to transcend to the real work of Digital Transformation, your team will have a single understanding of the current business strategy, and a clear, shared view of your customer so you can push to a new business design that’s customer-centric.
What to Expect from Digital Transformation
It’s difficult to identify when your Digitalization process is complete and you can move into your Digital Transformation journey. Your key indicator will be when you’re operating with a highly efficient process that’s a version of what you’ve been doing all along, just better. Your tools can get you there, but then it’s time to buckle down and apply your strategic thinking to how you can disrupt the status quo with better customer experience, design, and functionality.
Digital Transformation is business transformation. Your Digitalization groundwork makes way for new innovations and creativity, once you’ve successfully enhanced your traditional methods. However, without taking the time to create a solid, optimized process for change, you run the risk of getting trapped in organizational inertia.
As McKinsey states in a recent study, “Bold, tightly integrated digital strategies will be the biggest differentiator between companies that win and companies that don’t, and the biggest payouts will go to those that initiate digital disruptions. Fast-followers with operational excellence and superior organizational health won’t be far behind.”
Remember, the ultimate goal of advancing your technologies should be focused on building new business strategies and products, and not just using desktop productivity tools to simply protect your current offerings. With change management, you’re asking a lot of people to embrace change, so making sure you have a solid structure in place to ask for that level of commitment to the unknown is key.
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