Digital transformation is one of the most compelling challenges facing modern enterprises. Digital has prompted businesses to rethink their strategies towards reaching, engaging, and retaining customers. Research firms such as Altimeter have devoted entire bodies of work (https://www.prophet.com/altimeter/research/digital-transformation/) on how and why enterprises need to transform themselves with digital before digital disrupts their core operations, including Altimeter’s annual “State of Digital Transformation (https://www.briansolis.com/2019/01/the-2018-2019-state-of-digital-transformation/)” report.
At Pactera EDGE, I’m working in the trenches with businesses that are rapidly changing every aspect of their companies – including their people, processes, and technologies – to sense and respond to digital change. One question that arises often in my conversations with executives is this: How do I do digital transformation right? Most C-level executives know that digital transformation is important. But the term “digital transformation” can be so intimidating and far-reaching that embracing the concept feels overwhelming. Perhaps you are one of those executives. To help you, I’ve provided below five keys to success in digital transformation.
What a Modern Enterprise Looks Like
For context, I believe it’s essential to know what a modern digital enterprise looks like. Modern enterprises that have embraced digital transformation have these attributes in common:
- Digitalization at their core.
- Being global yet locally relevant.
- Being able to appeal to a very diverse employee set.
- Creating new digital business ventures.
- Shifting from a red ocean to a blue ocean mindset (https://www.blueoceanstrategy.com/tools/red-ocean-vs-blue-ocean-strategy/) – in other words, instead of trying to optimize performance in a known market space, being willing to create new markets that your competition has not even touched.
Enterprise digital transformation emanates from digital strategy that leverages various types of digital technologies and focuses on specific business outcomes to create an edge for enterprises. It is achieved by transforming business processes and enabling newer waves of customer experience.
Any organization regardless of size can leverage digital technology and create a winning edge not only for its business but also its industry. The requirement is for an all-inclusive strategy that embraces both digital markets and digital operations.
Five Keys to Success in Digital Transformation
For a digital transformation initiative to succeed in enterprises, it is critical to incorporate a few guidelines that are highlighted below.
1. Define the Why: To put this in simple terms, right at the outset companies should clearly define the business goals that they wish to achieve through their digital transformation initiatives. These could be to provide new product offerings, enter new markets, enhance organizational efficiency, and so on. Doing so enables them to visualize their success and focus their efforts towards the goal.
2. Create a dedicated team: Unless a team dedicated to the digital transformation effort is formed, the people working on other operational roles will not have the bandwidth required to fully commit themselves to the digital transformation implementation. Additionally, the members on the team should have a good understanding of the company’s business, the internal business processes and technical operations, and possess the experience in implementing the technology required for the digital transformation success.
3. Support from the Senior Management: The senior management must be supportive of all the digital transformation activities, through communication, reorganization adjustments, cultural adjustment and other required factors down through their organizations. Getting senior management onboard requires an ongoing effort to educate them on digital transformation and providing a clear road map. Confusion abounds about what digital transformation actually is (https://www.techrepublic.com/article/most-senior-leaders-cant-define-digital-transformation/), which can create uncertainty and pushback.
4. Dedicated strategic funding: Digital transformation, being a long-term investment, should be allocated a separate and dedicated strategic funding and must not be funded from the company’s operational budget. Tools and approaches such as metered funding (http://www.moonshotio.com/2018/10/23/how-to-innovate-with-metered-funding/) can help an enterprise to that end.
5. Constant monitoring and measurement of success: The success metrics that are defined at the beginning of the digital transformation effort must be consistently tracked, validated, and communicated across the organization.
How to Get Started
Digital transformation is not an overnight process – and it’s an ongoing one. As the rate of innovation and change increases, newer business and customer needs continue to emerge and have to be tackled. Digital transformation at its core is more about a change in the business mindset and then about a movement towards new technologies. Fortunately, tools such as design sprints exist to help businesses get started with changes as major as digital transformation. With a design sprint (https://www.moonshotio.com/2019/04/04/what-great-innovators-have-in-common-the-right-tools/), teams rapidly prototype new ideas, products, and services in a way that mitigates cost and risk. Businesses can use tools such as these to test and learn with digital transformation as well.
As a modern digital enterprise that has embraced digital transformation, Pactera plays an important role in enabling our customers catch this trend to become modern digital enterprises that are global, yet locally relevant. Connect with us and succeed in your journey towards becoming a digitally transformed enterprise.
About the Author
Venkat is Senior Vice President and General Manager of Pactera EDGE. He focuses on redefining global services into a more digital paradigm, aligning with industry trends that shift towards a digital platform-oriented economy. Venkat has over 18 years of experience in managing senior client relationships and solutions delivery in several industry verticals.