It is a truth universally acknowledged that digital transformation and innovation is paramount in the pursuit of competitive advantage. Employees are demanding change; end user experience is crucial, and data and analytics reign supreme. So why is success so hard to achieve, and why is the prospect of it so daunting?
McKinsey reports that less than 30 per cent of digital transformations succeed and the hard truth is that digital transformation isn’t an easy or measurable process. Organisations put lofty objectives in place and use complex technology to achieve them, when realistically the technology should be the output of the transformation strategy, not the conduit.
When approaching or planning digital transformation, we need to be clear on the ‘why’ before the ‘what’. In other words, rather than being inwardly focused, we should instead be looking at the outcomes we wish to deliver and not the means by which we achieve them. In order to gain competitive advantage, we should be asking what customer outcome we are striving to achieve. Customer experience first, last and always.
There are some key considerations that should provide a framework before embarking on any digital transformation.
The first cab off the rank? Get the right people.
It is important that digital and tech savvy leaders are employed: those who will really drive and understand the vision of the transformation, how it will improve the customer experience, and what is required internally to achieve it. These may not be C-Level executives, but rather those who are intrinsically involved in the day to day processes that keep the wheels of the business turning. Then they need to be empowered to make the right decisions and dedicated as a resource to the change effort.
These leaders must thoroughly understand the capabilities of the workforce so they can continue to give them the right tools to do their jobs efficiently. The leaders engage and foster relationships with all centres of knowledge within the organisation within all departments, connecting both digital and traditional processes. Rolling out a whole new system that nobody is familiar with will have a massive impact on productivity. Engaging and collaborating with employees may uncover critical paths for streamlining process. From internal stakeholders/employees to customers, the whole eco-system should be aware of the vision, and what part they play in the process. The strategy needs to have synergy with all those moving parts. It is a cultural, not a technical, shift.
Digital transformation should not be viewed merely as a technology change; rather that the technology deployed should be part of the strategic decision. It assists with the evolving business culture by streamlining processes and so determines the customer experience. If an initiative is to be launched, everyone should have buy-in on their part in the journey. They should also thoroughly understand what the overarching journey is.
But what of the current legacy systems? Digital transformation is not a one size fits all. Whatever is working in the current environment should be evaluated, as some skills and capabilities may be integral as part of the journey. It may be counterintuitive to rip those out to head into a brave new world. Full digitisation could affect the peripheral business, and several key skills from the ‘old way’ could be integral part in forging the new future. Double down on those skills. A clear strategy will build and extend the current skillset with a view to meeting the future ideal.
And just how is the success of the transformation measured? Again, this should be hardwired into the transformation strategy. If customer experience is king, then success can be measured in several ways depending on the end goal. Digital proficiency, Net Promoter Score and revenue are good markers, but a shift in the way the business thinks will be the primary indicator. The customer gains value as the path they use to purchase products becomes slick and seamless. The business reaps the benefits with better customer retention and profit as it adapts to the needs of their customers.
Digital transformation is an ongoing initiative and must be treated like a movable feast. Irrespective of the goal set initially, leaders and implementers should be prepared to pivot and change at any juncture. Technology moves fast, and a successful transformation will allow for ways to improve customer experience along the way. If it is built into the DNA of the business, then everyone involved will consider it their job to improve the experience.
If focus remains on the vision, on the ‘why’ – the customer experience – you are more likely to end up in the minority of those who will achieve a successful transition.