Investments in technology have enabled organizations to pivot quickly and ensure business continuity, especially with more people having to work from home than ever before. This experience has taught us the vital importance of digitizing processes and operations, something which requires both technological changes as well as behavioral ones. 

By understanding what a digital transformation strategy looks like and why it’s important, companies can successfully navigate this process and improve their overall success.

 Table of content: 

  1. What is a digital transformation strategy? & Why it matters? 

  2.  elements of digital transformation 

  3. 5 common challenges 

  4. How does digital transformation impact company culture? 

  5. types of digital transformation tools 

  6. 6 steps to building a digital transformation strategy 

What is a Digital transformation strategy? 

A digital transformation strategy is a process of optimizing existing workflows and procedures by incorporating technology into the equation. It is a plan that companies can adopt to make the best use of modern tech for their business.  

Nowadays there is an app or solution for almost anything, giving business owners access to many different solutions. However, it’s important to remember that people are behind those solutions and customer experience should be kept in mind when looking for solutions to problems.
 

Related: Digital Transformation: 7 Tips to keep it human-centered

Why it matters? 

Here are the 4 primary reasons why organizations must take the plunge into digitization: 

  1. Agility and growth 

A successful digital transformation strategy requires agility and growth. Companies that embrace change, stay agile, and foster growth demonstrates to employees the value of innovation. To remain agile and grow, employees need to cultivate mental fitness. Studies reveal that resilient workers are 20% more innovative due to their flexible thinking, allowing teams to become more agile overall. Investing in strategies to strengthen mental fitness helps sustain business success through greater innovation and agility. 
 

 It is essential for businesses to understand how being open to change and promoting growth can lead to a flourishing workplace environment where innovation is highly valued and encouraged. Furthermore, it is key for companies to recognize the importance of investing in mental fitness for their staff, as this can be beneficial to the success of the team in a variety of ways. These strategies will help to ensure that employees remain resilient and agile which, in turn, can result in higher levels of innovation. 

 

Read more: 9 Things to do to Increase Business Agility 

  1. Time-Saving

Time is of the essence when it comes to digital transformation strategies. Such approaches can drastically increase workplace productivity and provide customers with fast solutions. Utilizing technological advances, time-consuming processes can be streamlined, saving valuable time and resources.  

This in turn can lead to an improved employee experience as they are able to focus on tasks that have a greater impact instead of mundane duties. In the end, this can lead to happier, more productive, and more satisfied employees. 

  1. Customer satisfaction 

The world we live in today is driven by technology, and customers are no different. Customers expect a seamless digital experience from start to finish and organizations must be prepared to meet these demands. A successful digital transformation strategy can help businesses provide their customers with faster, more efficient solutions that are tailored to their needs. By investing in customer-centric technologies such as artificial intelligence (AI), companies can create personalized experiences for each customer, increasing their satisfaction levels dramatically. When done correctly, this can lead to more sales and higher levels of long-term loyalty.

  1. Innovation

The modern world has seen a radical transformation in the way that we work, and as such, it is no surprise that this shift has enabled greater agility and growth. In fact, data suggests that moving toward a hybrid workforce can increase creativity and innovation by an impressive 56%. It is important for companies to consider how their digital transformation strategy can help empower their employees in order to maximize their ability to innovate successfully.  

Doing so correctly will ultimately result in increased revenue growth and profitability for the organization. Through smart digital transformation strategies, businesses have an amazing opportunity to create positive change and make meaningful progress with their operations. A key element of this process lies in ensuring that your team is adequately equipped to lead the charge when it comes to innovation.  

4 elements of digital transformation 

Harvard Business Review has identified four fundamental components of digital transformation that can provide a considerable boost to your business in individualized areas. Each area serves as an essential key for success when it comes to digitizing operations. 

Technology 

We live in a time of impressive technological advancement, with the Internet of Things (IoT), cloud computing, machine learning, blockchain and AI leading the way. Technology is an integral part of modern business operations, helping to streamline processes and boost productivity.  

However, introducing new technology into your organization can be challenging – it may involve overhauling legacy systems or months of searching for the right option. It’s important to work collaboratively with digital leaders when making decisions about technology implementation.  

Data   

When planning a digital transformation strategy, it is important to consider the role that data plays. Does the technology you are looking to implement give you access to the data necessary for success? It is not uncommon for companies to lack access to vital information.  

To ensure your organization receives all of the data needed, feedback should be gathered from those on the ground who use the system in their day-to-day operations. Leadership must also be consulted when making decisions about which technologies should be used. When it comes to data, what does success look like? All of these considerations should come into play when crafting a digital transformation strategy. 

Process 

Digital transformation involves re-evaluating your organization’s processes and making changes to improve customer experience and outcomes. This requires challenging existing mindsets and behaviors, as well as allocating time for process adjustments. To understand how best to update your business’s approach, it is useful to look at different areas such as customer process, internal customer support, mobile development etc.  

Furthermore, having a collaborative mindset is essential for successful digital transformation because it ensures that everyone in the team has a shared goal. Clear communication will also help ensure that everyone understands their roles in the transformation strategy. Finally, it is necessary to take into consideration the user experience when making decisions about process management.  

Organizational change  

Organizing a successful change in an organization is not something easy to accomplish. It requires strong leadership, trustful teamwork and emotional intelligence. Communication and courage are also crucial elements of any transformation process. People can be quite opposed to changes that affect the way they work or their job security, so it’s important to involve them in the process and handle resistance with care.  

To ensure success, it’s advisable to create a team composed of professionals with relevant skills such as influencing people and addressing root causes of opposition. This way, the implementation of new procedures will be smoother. Finally, keep in mind that digital transformation may make certain skills obsolete and this could pose a threat to some members of the staff. 

5 common digital transformation challenges  

Digital transformation is a big change that can come with an array of challenges. Studies have shown that 78% of organizations fail to scale their digital transformation strategies. It’s important for leaders to understand and be aware of the human inclination to resist change, as it often feels like an intruder in our comfort zone. Below are some common roadblocks we’ve seen when it comes to digital transformation and how they can be addressed:  

Poorly Defined Strategies  

Without clearly defined goals, it’s hard to measure success or know if you’re headed in the right direction. 

To tackle this issue, start by creating a comprehensive and well-defined plan for your digital transformation strategy. Be sure to include:  

  • Your overall goal
  • A timeline of smaller goals 
  • All stakeholders involved in the project and their roles 
  • The specific technologies that will be implemented
  • Budgeting plans and tracking methods

Once these are established, create an internal IT team that understands the goals of the organization, can communicate effectively with stakeholders, is aware of any risks associated with the project, and has access to the resources they need. Having a reliable and knowledgeable IT team is essential to any successful digital transformation strategy.  

Lack of Resources  

It can be difficult to transition to a new digital workplace if you don’t have the necessary resources. This could mean not having the right technology, budget constraints, or even a lack of qualified personnel to do the job.  

Start by identifying what resources are needed for your transformation and where they can be acquired. When it comes to technology, take time to find the right tools that align with your organization’s goals and budget. You may need to hire external help if your current resources aren’t enough or don’t have the required skillset. 

In addition, make sure you know what kind of training is available for employees and ensure that everyone has access to the necessary materials. Finally, keep track of how spending progresses throughout the project so you can adjust your plans accordingly if needed.  

Resistance to Change  

Employees can be reluctant to accept new processes or ways of working, particularly when they are unfamiliar or complicated. Even with the best intentions and a strategic plan, it can be difficult to get everyone on board without a little bit of persuasion.  

Focus on creating an open dialogue about why change is necessary for the success and growth of the organization. Ask your employees for feedback or ideas about how they would like to see processes improved, and make sure that these solutions are incorporated into the transformation plan.  

Emphasize any potential benefits that come from digital transformation — such as improved customer service or better communication across departments — so that staff members can visualize what positive changes may result from their adapting to new methods. Finally, provide ample resources, training materials, and other support tools so that people feel equipped to adjust their working habits.  

Leaders must take the time to explain why certain changes are being implemented and ensure everyone is on board with them. Additionally, providing a platform for employees to give feedback will encourage them to open up about their concerns, allowing leaders to address any issues before they become larger problems.  

Poor Data Quality  

Poorly managed data can create issues when it comes to executing digital transformation initiatives, as mistakes or missing information can lead to inaccurate results.  

To ensure data quality, start by organizing and standardizing all company data. This includes information such as customer information, inventory levels, sales figures, etc. Once the system is in place, invest in analytical tools so that you can monitor and manage your data more efficiently.  

Additionally, create a procedure to regularly review and validate all incoming data to make sure it’s accurate before it enters your system. Finally, implement proper security measures to protect your data against any unauthorized access or misuse. 

Inadequate Security Measures
 

Just like we mentioned above, security should not be overlooked when it comes to digital transformation. Inadequate security measures can lead to data breaches, malware attacks, and more — which could have serious repercussions for both your customers and your company as a whole.  

To protect against malicious activity, make sure you have the appropriate systems in place. This includes having firewalls, antivirus software, a secure network infrastructure, and backup systems for all of your data. Additionally, create a clear policy about how employees should handle customer information or other sensitive data to ensure that it’s always kept safe.  

[READ MORE: 7 Ways an Organization Can Fail Its Digital Transformation] 

How does digital transformation impact company culture?  

There is a close relationship between digital transformation and company culture. Nowadays, technology is an integral part of our communication systems, especially with the increasing number of remote workers. Technology enables us to track our progress, simplify procedures, and reduce any issues in workflows. Behind these digital tools are people who use them – they need a sense of connection, community, and learning opportunities. Therefore, it is essential that the technology works efficiently and meets employees’ needs in order for them to be satisfied and productive at their job.
 

The company culture should be enhanced through the successful implementation of digital transformation. This will have a positive effect on employees as they can access new tools to stay connected, grow their skills, and feel part of a team. Ultimately, this will lead to improved satisfaction and loyalty in the workplace.  

7 types of digital transformation tools

From finding the right set of tools to equip an organization with a digital transformation strategy, there is much to consider. It’s important to note that each company will have different needs and therefore, require a unique suite of tools to suit these individual requirements.  

  • Collaborative tools: from sharing feedback to documents and thoughts – these tools need to allow for a team to work together both in-person and remotely. 

 

 

 

 

  • Communication tools: depending on the size of the company, different levels of communication will be needed. Consider tools that will enable easy communication between employees, for example: 
  • Internal intranet  
  • Instant messaging (IM) services  
  • Video conferencing applications  
  • Voice over IP (VoIP) phones 

 

  • Text messaging platforms  
  • Social media networks  
  • Email services 

 

 

  • CRM tools: often crucial for businesses, a CRM can help automate tasks, sales cycles, and more importantly, customer retention. 

Examples of popular CRM tools include: 

  • CMS tools: with potential customers doing much of their research online before even engaging with a sales representative, it’s important that a company’s web content is up to scratch. A CMS will help manage a website as well as blog content etc.  

Examples of common CMS tools include:  

  • Analytics tools: this will enable a company to track how successful different campaigns are, customer behavior, and more. Common examples of analytics tools include:  
  • Google Analytics  
  • Splunk  
  • Adobe Analytics  
  • Mixpanel  
  • Payroll and financial management tools: accounting for payroll can be a laborious task. Utilizing the right tools can help automate and streamline these processes, freeing up resources for more impactful work. 
  • Human capital management tools: HCM is key to any business that is looking to grow and succeed. From recruiting to employee experience, an effective HCM tool will ensure employees are managed in the best way possible. 

Examples of HCM tools include:  

6 Steps to Building a Digital Transformation Strategy 

Digital tranformation stategy graph

The development of a successful digital transformation strategy begins with the alignment of a clear vision. This vision should serve as a roadmap for how to approach the process and identify the capabilities required to reach your desired destination.  

  1. Create a technology roadmap

The technology roadmap means making a plan that details the steps needed to achieve your desired goals and objectives. This starts with assessing the current level of technological capabilities, followed by sketching out the steps that must be taken in order to reach the desired goals. Creating a roadmap will provide a clear path forward and help to avoid any unexpected delays or costly missteps along the way.  

Assessment: Take a look at your current technological capabilities and assess what needs to be improved or replaced.  

Objectives: Frame the objectives for the roadmap and identify what specifically you want to achieve through digital transformation.  

Strategies: Identify the strategic steps needed in order to reach those objectives.  

Resources: Outline the resources (e.g., personnel, software, technology) that are necessary to complete the roadmap. Timeline: Estimate possible timelines for reaching each step in the roadmap.  

Execution: Execute the roadmap by implementing its strategies and resources.  

  1. Cultivate and Strengthen Talent

As a leader, it is important to invest in developing and increasing the proficiency of your existing or incoming talent. This can help ensure that they have the necessary skills and knowledge to meet the goals set out in your plan. It is also beneficial for employees as it offers them a chance to grow and learn new things.  

 

Identify Skills: Start by identifying what skills you need to reach your goals. This may include technical skills, such as coding or data analytics, as well as soft skills, such as communication and problem-solving.  

Training Programs: Develop a training program that will help employees acquire those skills in an efficient manner. This can be done through online courses, on-site classes, or a combination of both.  

Mentoring Programs: Establish mentoring programs that allow experienced employees to guide and mentor new hires or existing staff members that need extra guidance.  

Communication Plan: Create a communication plan so everyone is aware of any changes to the training program or mentoring initiatives.  

Evaluations: Regularly evaluate employees’ progress to ensure that they are on the right track and meeting your goals.  

Rewards: Offer incentives and rewards for successful completion of training and improvement in performance. This will help motivate them to continue upskilling themselves and increasing their competency levels.

 3. Adopt an agile approach 

Agile methodology is a project management approach that focuses on breaking down large projects into smaller, manageable tasks. This way, teams can work more efficiently and effectively to reach their goals.  

Customer Needs: Start by understanding the customer needs and what they are looking for from your product or service.  

Sprint Planning: Establish sprints wherein team members break down the project into small chunks of work and assign them deadlines. This will help keep everyone focused on specific objectives in a timely manner.   

Scrum Meetings: Hold regular scrum meetings where the team can discuss progress, dependencies, challenges, and solutions. This encourages collaboration among team members and helps keep everyone on the same page.  

Continuous Improvement: Encourage continuous improvement by providing feedback and making adjustments to processes as needed. This will help ensure that the project is moving forward at an efficient pace and meeting customer needs.  

Deployment: Once all tasks are complete, deploy the project for customers to use.  

Implementing an agile methodology will help organizations meet their goals in a more effective manner. It encourages collaboration, accountability, and transparency among team members which leads to improved productivity and higher customer satisfaction rates. Therefore, it should be taken into consideration when planning out digital transformation initiatives.  

4. Embrace new modern Technology

To successfully implement digital transformation initiatives, organizations must shift to modern technology solutions. This can include moving from legacy systems to cloud applications or adopting artificial intelligence (AI) and machine learning tools for data analysis.  

Research: Conduct research on the latest technologies available in the market that could help you reach your goals. This might include exploring new software platforms or AI-powered analytics tools.  

Vendor Selection: Carefully select vendors who have proven experience in providing the best solutions as per your requirements. Make sure they understand your business needs and have a solid track record of delivering successful projects.  

Testing & Evaluation: Test out different solutions before making a decision on which one to use. This will help ensure that the technology is reliable and fits all of your requirements.  

Training & Support: Provide training and support for employees who will be using the new technology. This will help them become more familiar with the system and understand how to leverage it most effectively.  Read More:

   Top 6 Essentials Modern Workplace Technology 

5. Manage Data 

It is important to consider data and how it will be managed. Think about how these systems can work together and what sort of data or insights they can provide. Spot potential gaps in terms of data management to ensure that your organization can benefit from the implementation of these new tools.
 

Data Collection: Collect data from sources such as customer surveys, web analytics, and social media. This will help you gain insights into customer behavior and preferences which can then be used to inform future decisions.  

Data Analysis: Analyze the data collected to uncover trends and patterns. Use this information to make educated guesses about customer needs and how your product or service should be tailored for maximum success.  

Data Storage & Security: Store the data securely in a centralized location where it can be easily accessed by authorized personnel. Make sure that adequate security measures are in place to protect sensitive customer information from unauthorized access or misuse.  

Data Visualization: Present the data in a visual format so that it can be easily understood by stakeholders. This will help them make informed decisions and gain valuable insights.  

READ MORE: Extracting Actionable Data Driven Insights: 4 Key steps  

6. Monitoring and scaling

Monitoring and scaling are the final steps in digital transformation initiatives. Organizations should monitor progress and results to ensure that the goals set out in their plan are being met and that desired outcomes are being achieved.  

Review Goals & Results: Take time to review your goals, strategies, and results on a regular basis to measure progress. Make adjustments as necessary to ensure that you stay on track with your objectives.  

Identify Gaps: Analyze any gaps between the expected outcome and actual result so that problems can be identified and addressed quickly. This will help prevent issues from becoming bigger problems down the line.  

Scale Successfully: As you start to see success, it is important to scale up your efforts and capitalize on the results.  

Restructuring your Business Model? Let Digital Transformation be Your Guide 

The digital age brings with it a great deal of change, making it all the more important to have sound strategies in place for navigating these changes. By collaborating with your business leaders, you can ensure that your digital transformation efforts are successful and lead to increased revenues, new products, and improved outcomes.  

However, this requires having the right resources, tools, and teams available. Empowering your team with the right knowledge and expertise is essential to ensure that your organization successfully navigates the digital transformation journey.