12 Key Guidelines for Making a Digital Transformation

Companies in digital denial don’t realize the need for new-generation IT. We look at crucial factors to consider when planning for a digital transformation.

The scope of digital transformation you need will be unique to your enterprise. Some organizations may focus on market expansion and others on a thorough reinvention; still others may hope to leverage digital to wring out every last bit of operational efficiency. Regardless of the motivations, the endgame will be different. This transformation tenet is essential to internalize right from the beginning. It’s natural to look around and emulate your competitors; however, that approach will likely fail. Instead, think of things from your customer’s perspective. Prioritize by optimizing the customer experience, creating new market opportunities and pursuing operational efficiency.

Executive teams are rife with new CXO titles. The advent of the chief digital officer, chief data officer, chief mobility officer and the like is fueled by a motivation to solve the important digital challenges organizations face. If you have the resources to hire for these positions, that’s great. But be mindful that these roles serve as a shared resource between business and IT designed to promote collaboration. That’s because the digital challenges will still exist when the new C-level arrives, and you want to avoid having yet another silo. This new silo would have blurred responsibilities overlapping with the existing scope of your chief information officer and chief marketing officer, and is bound to create friction if not properly managed.

To achieve your desired business outcome, focus on the customer and take a truly introspective look at where you are. Dig deep. A survey by Bain and Co. found that while 80 percent of CEOs believe they deliver superior customer experiences, only 8 percent of their customers agreed. This monstrous disconnect calls into question how companies evaluate customer service quality, and should give you pause when considering yours. Where does customer service start and end? Too often, customer service equates to only one aspect of the customer lifecycle/post-sales support. Not enough emphasis is placed on customer engagement: understanding customers by analyzing an experience that’s increasingly digital. This means your digital presence has to do the heavy lifting.

User expectations have changed. Customers now consider the quality of the digital experience they receive when weighing purchasing decisions. While the company takes the first hit for any shortcomings, the blame is quickly redirected toward IT. But that responsibility also offers opportunity; it’s a perfect scenario for IT to lead. After all, those in IT know how to analyze and optimize experiences in a cohesive way. It’s not only about a great user experience; it’s much more than that. Our longtime involvement in front-end and back-end systems equips us to tap into these data sources to create the foundations for engaging experiences that drive the customer journey. This is especially true when using data for personalization.

When talking about customer experience, it’s easy to forget about your internal stakeholders: employees. Engaging employees should be a central part of your digital transformation strategy. According to Demand Metric, organizations with more than 50 percent employee engagement retain more than 80 percent of customers. Viewed this way, your biggest customer opportunity could very well be your staff.

Your digital IQ will have a striking impact on your organization, not only in how your technology systems operate but also in how well they serve as recruiting tools for the best and brightest employees. As an ever-present staple of the Silicon Valley employment scene, digital IQ now affects all companies, especially those in fast-paced sectors prizing innovation. While this may sound like fear-mongering, it’s not, and it will certainly impact the quality of employees you’re able to attract in the future. The new frontier then becomes perfecting the employee journey. Because the customer journey is important, the user journey for employee-facing applications is also important. If you want engaged employees, you need engaging applications. If not, your operational efficiency will suffer.

When you launch your transformation, resist the temptation to view digital efforts as a new way to execute old tasks. Technology presents an almost unfathomable opportunity to completely rethink how you do everything, making it an integral part of your business strategy. According to Ibid, in the next year, 42 percent of decision makers hope to uncover new revenue streams. Beyond just bridging the old and new, digital transformation creates new businesses and revenue streams that were not possible before but now are.

Factor digital advancements into your innovation process, and if you don’t have an innovation process, start one. Think of digital as a business goal in its own right, strategizing how it can disrupt your business model for the better before your competition does it to you. Work more effectively with IT by leveraging digital processes to better engage employees and customers.

Modernization can be an unruly monster to tackle. Within your company, there are likely a multitude of systems—ERP, CRM, HR and so on—that are at varying stages of being upgraded or replaced. While you might have a good start with updates to some, you can’t ignore your digital debt, which refers to the infrastructure holes, application and data issues holding your business back. So, how do you arrive at the proper balance of spending for maintenance, modernization and new development to advance your digital transformation? Modernization paths. You will need to find your own—and perhaps more than one.

As the ones closest to the back-end systems, IT knows the customer-facing capability will collapse if the core transaction systems of record are not improved. Your hardware infrastructure, application architecture and data approach can all be antiquated to the point that they should be modernized, and each may have to be handled in different ways. There are certainly common areas ripe for improvement: UX modernization, application replacement, data and app consolidation/repurposing, rules modernization, migrating to the cloud, Website modernization, mobilization and process modernization.

The pressure is on to leverage the mountains of data at your disposal and turn it into actionable insight. You may have heard the adage: “Just because you can measure it, doesn’t mean you should.” But knowing which data is critical and what isn’t can be complicated amid big data hype and dazzling analytical algorithms. Even organizations with expensive data warehouse projects too often fail to deliver the business what it needs.

Studies show that data integration and connectivity continue to be a top challenge for many IT organizations. This affects virtually every application initiative, from developing new systems and mobilizing existing apps and data, to reporting and analytics. Organizations need to determine how to manage data and how it should be managed: on-premise; in multiple clouds; with different cloud providers; and in public, private or hybrid clouds. Workloads and security are also factors. The types of applications and systems that need to access data also contribute confusion. Some need to store and retrieve while others are tasked with accessing, displaying, creating, updating and deleting data. Others need to function without a reliable connection.