3 Ways to Win at Digital Transformation
By Gina Ferrara, Senior Analyst, Madison Advisors
According to a survey of directors, CEOs and senior executives conducted by Harvard Business Review, 70% of digital transformation (DX) initiatives never reach their goals and of the $1.3 trillion spent on DX in 2018, $900 billion went to waste.
These numbers are scary. They are even scarier in light of the COVID-19 pandemic that forced the world to come to a screeching halt. Businesses in all industries were impacted in ways that were unimaginable, forcing them to innovate in order to survive. Countries were forced to lock down and economies went on a downward spiral. Consumers’ daily routines were disrupted with little notice and even less preparedness. Shopping at the grocery store switched to online shopping with delivery and restaurant dining became curbside pickup. Office workers and students were required to work and learn remotely while medical and therapy professionals switched to telehealth services; and real estate agents conducted virtual open houses and home tours. Daily activities that were never given a second thought now needed to be conducted in a digital manner, forcing consumers to spend even more time online.
COVID-19 was not just a global health pandemic, it was a reality check for the business world. These adaptations required the ability to react swiftly, to think outside the box and to change how businesses operate. Those that were lagging in their digital transformation efforts and were reliant on legacy systems and inefficient workflow processes struggled to pivot to a new way of conducting business.
While most companies are optimized for the environment in which they operate, they might not be agile enough to adapt to global change and the COVID-19 pandemic proved just that. It also proved the importance of having a customer-focused DX strategy.
Digital transformation is not just another technology catchphrase. It is an enterprise-wide business initiative that requires a well-defined strategy for success. The goal of DX is to use technology to solve traditional problems. This means integrating technology into every area of business to provide value to customers. Digital transformation is not about making things easy for the company, it is about making things easy for your customers. A possible by-product, however, may be operational efficiencies brought on by automation.
The road to DX is not one that can be driven by one department. It needs to incorporate insight from cross-functional teams and include those responsible for customer communications management (CCM) and customer experience (CX). So how can an organization pave the way to successful DX?
- Define your strategy before acquiring technology. It is important to understand the enterprise-wide business strategy before purchasing technology. It is important to avoid acquiring point solutions that could potentially prohibit the organization from reaching its overall goals. One specific software solution or tool may not necessarily be the answer; however, a combination of tools may be needed to meet the goals and objectives outlined in the business strategy.
- Establish a framework that is aligned with the business vision. A solid foundation in the form of executive leadership support is necessary to building a framework. Executive leaders play a critical role in championing digital transformation and aligning it with the long-term goals of the organization. The framework should include cross-functional teams from the various lines of business, as well as marketing, IT and customer service contact centers. In addition, business models, operational processes, customer touchpoints and customer communications should be evaluated against the business vision to identify gaps and pain points. Evaluating the capability of your workforce ensures they are enabled to work digitally and can utilize technology such as collaboration tools. By seeking employee feedback and providing the technology solutions that will enable and empower employees, your company will be positioned to provide a more positive experience to customers. Lastly, recognize that DX impacts the culture of the organization; therefore, individual business agendas need to be broken down to create a cohesive organization that embraces change.
- Understand the customer journey. Digital transformation requires organizations to shift their mindset away from being product-focused to being customer-focused. Technology decisions should be about making your customers’ lives easier; therefore, all decisions related to DX should be customer-focused. This is why it is important to understand the customer journey and the steps a customer must take to do business with your organization. A journey map is a great tool to gain insight into the customer experience as it identifies all customer touchpoints and business processes that support the interactions and the communications that are exchanged along the way.
Digital transformation must be thought of as part of a journey that requires an organization to continually evolve. It requires a change in mindset and executives who are forward-thinking visionary leaders that support the program. Likewise, DX is not solely an IT responsibility—all stakeholders in the company play an important role to ensure the desired outcomes are achieved. Without a customer-focused strategy that aligns with business goals, it will be challenging to get from DX vision to DX execution.