The new digital age is making it imperative for all types of businesses to transform and adopt digital technologies. According to a recent report published by MIT and Capgemini, companies that leveraged digital technologies outperformed their peers and on an average are 26% more profitable than their peers in the industry.
Amazon has proved this beyond doubt by successfully leveraging digital technologies to make information available to its customers easily, made it convenient for them to pay, personalized its services based on customer buying pattern and delivered overall customer experience.
Digital transformation being essential for survival, it is perilous not to have a strategy that will guide the entire effort. Few basic principles that we need to understand are that transformation cannot happen in isolation with the present way of functioning. This means transitioning of lot of moving parts at the right time and in sync with many others.
Another very critical aspect is that transformation is an ongoing project with scope that extends to every aspect of business and will evolve along with customer expectations, market conditions and technological advances.
Following are important pointers that will help design effective transformation strategy:
- The first step in to have a very clear objective for digital transformation: Making the business agile enough to reflect the needs of your customer and actions of your competitors should be the agenda
- CEO’s vision and leadership to transform is the single most critical factor: Organizational structures, culture, business models and how the enterprise interacts with others in the eco system have to transform and leadership plays a critical role
- Prioritize which aspects of business that you plan to transform: It is important to win confidence of all stakeholders by showing business benefits of transformation quickly. Identify critical customer-centric processes (where the results are immediate and visible) and target to improve end-to-end visibility and control
- IT must play a strategic role rather than just being a back office function: IT should enable market intelligence, create competitive advantage, ensure swift customer service and deliver Omni-channel customer experience
- Tactical approach to address the existing complexities: Legacy systems operating independently, applications creating propriety formats, mergers and acquisitions leading to operational complexities are a common scenario. Delivering operational efficiency at low cost demands that we take a calculated, incremental approach to transformation by investing in solutions that will give immediate results and at the same time support long term vision
- We should be able to accommodate change in strategic plan without derailing the transformation project: Business changes at a very fast rate and we might have to change the strategy basis market requirements
- In this on the go, self-service world, your customer will directly interact with your IT and has high expectations: Your IT systems should be intelligent and agile to cater to demanding customers. Their need for availability of the service on the click, customized analytics to comprehend spend, swift response to service request are all critical aspects that should be addressed by intelligent IT solutions
- Funds for digital transformation: New investments for this are limited; combine them with the cost savings that will accrue from process simplification and retirement of legacy systems
- Transformation is inevitable, do it now: To gain competitive advantage, it is important to be proactive. It will be difficult to transform within a short span when the business needs it immediately
- Depend on industry forums to understand best practices, learn from peers who have been undertaking similar projects and follow guides written by experts to avoid delays
An effective digital transformation strategy should look at core processes end-to-end and simplify them by removing the non-essential steps and the effects of legacy that have built up over the years. This brings in much required enterprise agility .0