Digital transformation has become an essential step for businesses to remain competitive and thrive in the digital age. But, there’s never a one-size-fits-all formula. Each company is different, and knowing your strengths and how to use them makes the difference between failure and success.
Ultimately, your business is the culmination of multiple key decisions. Yet sometimes the decisions and choices you thought were logical and well-informed are not. Among the worst mistakes, you can make is taking impulsive decisions and rushing your digitization process.
To get digital transformation right, you need a curiosity-led approach that asks questions, considers stakeholder views and reconciles customer preferences with business needs.
Here are 5 questions to ask before embarking on a digital transformation journey.
What is digital transformation?
Digital transformation is an ongoing process that exploits your organization’s digital technologies to create new business processes or modify existing ones and radically change your business operations.
It creates a new, powerful digital business model that permeates your company culture, helping your organization address changing customer needs and market requirements. Digitalization requires a cultural change and reimagining your business strategies to create more value for employees, stakeholders, and unique, personalized customer experiences.
The success and failure of digital transformation
The rate of success:
- 56% of CEOs cite increased revenue as a major benefit of digital investment
- By 2023, digitally transformed organizations will contribute to over 50% of the global gross domestic product (GDP)
- Businesses with a higher digital maturity experienced a 45% growth in revenue
- The top benefits of digitalization are enhanced operational efficiency (40%) and meeting customer expectations (35%)
- Business leaders believe 46% of their digitalization projects increased revenues and 44% improved customer relationships
- High-tech B2B companies with transformed customer experience processes lowered costs by 10-20% and increased revenue by 10-15%
When digital transformation fails:
- 73% of companies did not get any business value from their transformation initiatives
- Resistance from employees and absence of support from management are the main reasons 70% of digitalization efforts fail
- In 2018, over 50% of digital transformation projects failed completely
- Only 30% of organizations succeed in meeting their digital transformation targets and attaining long-term change
- 29% of companies lack the data to prove digital transformation ROI, with 28% viewing it as a cost center
- Only 16% of employees feel their company’s digitalization program improved performance and is sustainable
Five crucial digital transformation questions
- What key processes and operations are you going to transform?
Define which processes and functions have high scope for digitization and are the most vital for your company’s success and profitability. A thorough analysis of your organization’s current state provides an in-depth understanding of what to prioritize. It helps you craft a precise digital strategy to bridge the gap between where you are and where you’re going.
- Are your digital transformation goals aligned with business goals?
Assess your company’s needs to understand why you’re engaging in digital transformation and if the organization is ready. With such knowledge, you can set the right digital goals and define a high-level strategy. Proper goals make digital transformation relevant for your business’s bottom line and prevent wastage of resources. To design a feasible and realistic transformation roadmap, set and customize digital goals that align with business goals.
- Do you have the talent and infrastructure to support your strategy?
If you begin any digital transformation initiative without the talent or infrastructure to support it, you’re doomed to failure. Formulate your digital transformation roadmap, identify your infrastructure capability, and pinpoint the team to run the project. Adopt a digital transformation platform that enables innovation and provides sufficient time and cost savings to make a significant impact.
- Is your organization’s culture ready for transformation?
Evaluate how open your organization is toward transformation, but be realistic. To increase your chances of success, cultivate a culture of growth, adaptability, and innovation that starts with the leadership then permeates to every member of the company. You need organization-wide agreement and adoption to change business processes entrenched in your operations. If your employees are resistant to change, implementing digital transformation will be an uphill task.
- What challenges will you face on the digital transformation journey?
Any transformation initiative carries some amount of risk, and the earlier you recognize them, the better. Predicting and pinpointing digital transformation challenges before beginning the journey helps your team streamline the digitization process. It makes them more effective in reducing the risks before they cause intense damage. Some areas of risk to think through include: data leakage, privacy, technology, security, and regulatory issues.
Why is it important to adopt digital transformation correctly?
For the longest time, Microsoft depended on revenue from its operating system, traditionally installed or sold in BOX and OEM versions. But, to counter competition from other multinational players, the company revised its strategy to address changing customer needs.
It began by availing its operating system to mobile devices such as iPads, then turned its focus to building a cloud computing business to offer easier access to its technology. It also forged lucrative partnerships with other technology and software vendors.
The result? Microsoft’s market capitalization has risen to a market cap of almost $2 trillion and stock prices to $245.
Ask the right questions and succeed in digital transformation
Even though digitalization is a long journey that seems complex and intimidating, it’s worth the effort. Successful digital transformation increases agility, reduces human error, and encourages collaboration, which gives your business a competitive advantage. But, to maximize your efforts, begin with asking the right questions, a systematic approach, and understanding market needs.
Choosing the right solution can go a long way in expediting digital transformation. Take the leap into the world of digital transformation with Kissflow.