In today's world, the expansion of digital has compelled many companies to adapt quickly. But this shift hasn’t happened overnight, and so, there are still many companies who are struggling to fully understand what digital transformation is. Nor do they have total control over their own processes of digitalisation.
So, what do executives need to do differently? In this article, we will review the most common issues companies face when developing their digital transformation strategies, and highlight the seven questions you should ask yourself when reviewing your company's digital transformation strategy.
The common issues in developing digital strategies
According to a study published by Forbes and Progress, out of 700 decision-makers in charge of digital transformation, 75% would opt for a step-by-step digital transformation strategy as opposed to deploying a strategy all at once.1Of those without a digital transformation strategy already in place (24%), the majority agreed that transitioning to digital is important. Yet, the same respondents also added that they did not have the means to achieve it (59%).
The study revealed a disconnect between understanding and action. On the one hand, leaders had an awareness of the need to implement a digital transformation strategy. But on the other hand, few had actually put strategies in place. To that effect, a digital transformation strategy also depends on collaboration between the different departments within a company. For example, an IT department would consider investing in the Cloud. Operations would aim for this investment to go into data analysis. Finally, the Marketing department would opt for investing in digital channels. These departments need to align, and a digital transformation strategy should address and accommodate these disparate departmental needs.
To take full advantage of a digital transformation strategy, you need to have one in the first place.
In 2017, Harvard Business Review analysed 2,000 companies of different sizes, from various industries and countries, to identify the different digital strategies that have been implemented over the years.2 The results showed that digital initiatives often had disappointing results with little impact. This highlights the need for a well-planned digital transformation, underpinned by a thorough digital transformation strategy.
The 7 key questions when reviewing your digital strategy
The allure of new technologies often leads companies to cave into adopting them before they fully understand them. This frequently occurs without a clear idea of the impact on the business, and with a lack of strategic thinking. Before investing in Artificial Intelligence (AI), Cloud, or other solutions, it is important to have in place a solid digital transformation strategy, one that is tailored to your business. Read on to see how you can do this with the help of the seven key questions:
1. Do you fully understand digital transformation and its potential?
According to Jeff Skipper, a leading Digital Consultant, the first thing you need to do is make sense of digital transformation and its potential.3Digitalisation offers great opportunities: not only does it enable more flexible and efficient work processes, it also allows for the adoption of entirely new business models. In some cases, companies from outside of a specific industry are able to enter new business areas faster and more cost-effectively, completely turning markets upside down overnight. For example, platform or freemium models changed the way companies create added value for their customers. To inspire you, we have compiled a list of some of the most successful examples of digital transformation.
Therefore, start by considering whether your digital strategy is exploiting the full potential of digital transformation. Next, analyse your organisation's strengths and value proposition, and check to see if these strengths can be applied to new services or products. Lastly, build a strong vision and set the goals to achieve it.
2. Do you place your customers at the centre of your strategy?
A common mistake is to focus your digital transformation strategy on the business without considering who your strategy addresses. Taking the end customer into account should be an essential part of developing your digital transformation strategy. It is worthwhile investing time and resources in understanding who your target audience is, and what their needs, values and desires are. Put yourself in your customers' shoes, study and anticipate their needs, and then build your value proposition based on this information.
New technologies and processes such as Big Data and predictive analytics are of the utmost relevance today. They will help you to collect and leverage valuable data on your customers' needs, and how they are changing. In the end, this will enable you to react to the changes in a way that is beneficial to your business.
3. Does your digital transformation strategy encourage innovation?
In the digital age, customers' needs and market conditions can change very quickly. Your company must be able to adapt fast to new trends, so innovation is the magic word here.
Yet, innovation is not easy to budget for, so you have to create the right conditions for it. This can even include rethinking the entire structure of your organisational structure. For example, agile working in cross-functional teams is a well-known way to promote innovation. Teams working in an agile way should be able to make and put in place decisions as autonomously as possible. At the same time, they should be able to show a high degree of individual responsibility. Open and transparent communication is another tenet that should be visible across the entire company.
Innovation is a process based on hypotheses that helps transform ideas into marketable, revenue-generating products and services. Yet, many innovations fail, and that is why it is crucial for an organisation to learn from their mistakes. Therefore, make sure our digital transformation strategy offers an answer to the question on how to promote innovation in your organisation. It should be the starting point, which over time will adapt based on customer needs and internal learning.
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4. Do you know what role technology has in your digital strategy?
When asked about digitalisation, many people think of technologies such as smartphones, virtual reality, Cloud computing, Big Data, 3D printers or AI. Yet, as these questions show, technology is only one of myriad considerations you should make during a digital transformation.
A successful digital transformation strategy shows how technologies can be used to increase the automation and efficiency within your organisation, whilst creating value for the customer. Start by understanding which technology trends are driving your market and which trends are emerging in others. Then, try to determine how new technologies will be tested in the future, and which parameters are critical to the success or failure of such tests. This will give you a better overview of the new technologies emerging and the possible digital solutions for your teams to work with.
Another aspect to take into account is how you can distribute the responsibilities around the use of technology. For example, creating the role of Chief Digital Officer to help you regulate the use of data in your company, and how you can approach the topic of Cloud computing.
5. How does your strategy connect with your company's culture
A digital transformation strategy is directly related to the corporate culture. After all, adopting new business models and having full focus on customers can have a strong impact on a company. And taking the necessary time to assimilate the change is not always possible in today's fast-paced business world. That is why you should begin going through a cultural change as soon as you start developing your digital strategy.
Involve your teams in the transformation process, and help them understand the real value of digitalisation. The reason why this matters is because far too many employees are being pushed to adopt new technologies and ways of working without understanding why the change is necessary. If you adopt a "train-the-trainer" attitude from the beginning, you will have a better chance of success. As a leader, you should also be transparent in your communication and let your teams know about the challenges and goals ahead. Open communication is a key factor in a successful digital transformation process.
Establish an agile culture that encourages innovation and continuous improvement, and invest in your employees' knowledge, such as digital training. But bear in mind that your strategy may need to rely on new expertise, in which case, you need to find the right specialists externally.
And remember that cultural change plays a central role in digital transformation, and as it affects all employees, it requires a lot of time and a sensitive approach.
6. Have you considered the possible risks of your strategy?
Any digital transformation project involves risks for a company. Before starting, you must evaluate these risks as well as tracking and analysing them. By doing so, you and your team will be able to see the potential outcomes of the digital transformation strategy you are about to build with greater clarity.
For example, ask yourself what could be the main reasons for your strategy to fail in the implementation phase. Here are some aspects to consider:
- A guarded strategy which does not allow for novelty
- Limited understanding of customer needs
- Inappropriate organisational structures
- A lack of innovation
- An unwillingness to change, and many employees leaving
In this phase, you can carry out internal and external pilot projects to consider all potential risks. Internally, these pilots will assess how employees will react to the introduction of new technologies, working methods, and organisational structures. They will be a good indicator of how open teams are to change and how quickly users adapt to using new tools. The results of these tests will be decisive in shaping the company's digital transformation strategy even further. External pilots will show the company how customers react to new technologies.
Another risk you should consider is that of cybercrime. In this regard, you need to develop a solid strategy to ensure your company's data security and compliance with existing regulations, such as the EU General Data Protection Regulation (GDPR).
7. Do you have a process to collect feedback on the strategy?
The last question hints at two important points of your strategy that are often omitted, both related to feedback.
The first point refers to the systematic collection of feedback, which should be part of your general business strategy. Thus, feedback ought to be central to your digital transformation strategy too.4By using recurring surveys, focus groups, and other techniques to collect feedback, your strategy bases itself on the best possible data. Next, you should analyse this feedback and incorporate it into your digital strategy.
The second point refers to building a process into your digital strategy. This will ensure regular evaluations of the strategy, and ways to redirect it, in case it becomes necessary. The fast pace of digitalisation will further increase the rate at which new technologies reach market maturity. That said, if your digital strategy is flexible enough, and adaptable to constant change, it will survive. And with it, your company's ability to remain agile.
Important considerations before implementing a digital strategy
Now that we have greater clarity on developing a digital transformation strategy, the next step is to put it into practice. Easier said than done.
It is crucial to define clear roles and identify the experts who will be involved in the implementation phase. Who makes the most important decisions? Many CEOs want to lead the digital transformation of their company themselves. It makes sense given all that is at stake and the ubiquity of digital in all departments. Yet, you should be aware that this takes considerable time out of your agenda. That is why it is worth considering delegating certain tasks to your Chief Digital Officer (CDO) or Chief Information Officer (CIO), in order to get the most out of your company's transformation.5
What is more, you should create the best conditions for teams to be successful. As a leader, you will be the one to ensure your teams do not stray from reaching their objectives. Thus, define (digital) corporate goals, and establish Objectives and Key Results (OKRs) for all teams. The "Objectives" should include larger and longer-term goals, while the "Key Results" should be broken down into quarterly (smart) goals. Regular measurements of Objectives and Key Results (OKRs) will help you track all actions taken towards reaching the objectives, and will help you make the necessary adjustments in order to optimise execution.6
Recommendations for a successful digital transformation strategy
This article has highlighted the main issues in developing digital strategies. It also put forward seven key questions to help you to review and optimise your digital strategy. Needless to say that the better the strategy, the easier it is to put it in place successfully. Therefore, remember to:
- grasp the full potential of digitalisation
- put customers in the centre, encourage innovation
- address the role of technology and that of corporate culture
- consider potential risks, and
- build in a feedback collection process
Finally, prepare yourself for a process that, owing to the ongoing technological and social changes, might not end soon. So, make the journey to digitalisation your goal.
Do you want to read more about Digital Transformation?
1'What, Exactly, Is A Digital Strategy? It Depends Upon Who You Ask', Forbes, June 2016.
2'6 Digital Strategies, and Why Some Work Better than Others', Harvard Business Review, July 2017.
3'Digital transformation strategy: 7 key pieces', The Enterprisers Project, August, 2019.
4'What is a digital transformation strategy?', Techradar.pro, November, 2019.
5'6 Steps Framework to Implement Digital Transformation in Business', Newgenapps, December, 2017.
6'How to Develop a Digital Transformation Strategy: Step-by-Step Guide', Medium, September, 2018.
About the author
Ioana's journalistic background and experience as a digital marketer fuel her curiosity to know more about digitalisation, meeting management and business agility.
- Step #1: Evaluate your digital marketing goals. ...
- Step #2: Reexamine your target customer profiles. ...
- Step #3: Take a look at your digital presence. ...
- Step #4: Evaluate your messaging strategies. ...
- Step #5: Check your digital marketing ROI.
Digital transformation strategies (Part 1):
Improve cybersecurity of E-commerce systems & financial technologies. Increase budget for research and development of digital transformation systems. Hire competitive talents that will fit the current skill requirements. Develop user-friendly digital systems.
- Identify the Digital Marketing Goals and Tools you Will Need. ...
- Evaluate your Existing Digital Marketing Channels and Materials. ...
- Do an Audit and Plan your Own Resources. ...
- Do an Audit and Plan your Obtained Media. ...
- Do an Audit and Plan your Paid Media.
- Tie to strategic objectives. Some metrics will be financial, such as profit, revenue and cash flow. ...
- Keep it simple. Don't overload staff with too many KPIs to track. ...
- Maintain up-to-date data. Be sure your measures include the latest data and are reported promptly within your company. ...
- Use dashboards.
Richard Rumelt offers four criteria in strategy evaluation, namely “consistency, consonance, feasibility, and advantage” (David, 2011, p. 288), two of which are discussed below. Consistency, in Rumelt's criteria, states that a strategy must not have conflicting goals and objectives.What are 5 strategies for using digital technology? ›
- Focus on performance and sustainability.
- Walk a mile in their shoes.
- Balance high tech with high touch.
- Assess organizational culture and change management factors.
- Carefully implement, and then measure results.
Customers, Competition, Data, Innovation, Value.What are the top 3 trends of digital transformation? ›
The new trends in digital transformation include hybrid work, intelligent search, AIOps and machine learning, customer data platforms (CDPs), and integrated Agile, DevOps, and ITSM platforms.What are the 3 key elements of digital transformation? ›
Analysis of the interviews shows clear patterns. Executives are digitally transforming three key areas of their enterprises: customer experience, operational processes and business models. And each of these three pillars has three different elements that are changing.What are the 7 elements of strategy? ›
Here are the 7 basic elements of a strategic plan: vision, mission, SWOT analysis, core values, goals, objectives, and action plans.
- Layer 1 – Cloud platforms are now mainstream.
- Layer 2 – IT will underpin business agility and productivity.
- Layer 3 – Technology will reshape the customer experience.
The five stages of the process are goal-setting, analysis, strategy formation, strategy implementation and strategy monitoring.How do you monitor and evaluate a strategy? ›
1.4 The monitoring and evaluation strategy is organized into four main streams of work: results monitoring, grant monitoring, evaluation, and dissemination and learning. Each plays a pivotal role in GPE's ability to monitor and assess progress at the country level, and of the partnership as a whole.How do you evaluate the progress of a strategic plan? ›
- Step 1- Evaluation starts at the start. ...
- Step 2- Implement consistent processes and tools. ...
- Step 3- Empower teams to evaluate their own strategies. ...
- Step 4- Take corrective action. ...
- Step 5- Iterate your plan. ...
- Step 6- Celebrate successes.
Because the competitive environment is constantly changing, companies must adapt to these changes by modifying their strategic plans to reflect shifts in their own strategies — to introduce new products, modify existing products, or change marketing strategies.What are the 3 C's of implementing strategy? ›
Sucess begins by focusing on the three Cs of implementing strategy: clarity, communication, and cascade. Each of these three Cs rolls into the next.What are the 5 I's of strategic analysis? ›
According to Lussier and Sherman (2014), “The 5 Is strategic analysis stages include: (1) issue identification; (2) interested strategic stake- holders; (3) incentive of stakeholders; (4) information—objectives; and (5) interaction strategies” (p. 52).What is digital strategy example? ›
These include artificial intelligence (AI), machine learning (ML), robotics, data analytics, and the Internet of Things (IoT). As these technologies dramatically reshape industries, many companies are pursuing large-scale change efforts to capture the benefits of these trends or simply to keep up with competitors.What are the 5 most important things for someone leading a digital transformation project? ›
How to lead a digital transformation in your business
- Prepare a climate for change. ...
- Create an action plan. ...
- Establish a change team. ...
- Engage and communicate. ...
- Sustain a change culture.
8 Factors for Successful Digital Transformation
- Orientation. ...
- People. ...
- Processes. ...
- Objectives. ...
- Structure. ...
- Insights & Intent. ...
- Technology. ...
Cloud computing will be the key to digital transformation in 2022 and beyond. Thanks to the emergence of several leading cloud platforms and their pay per usage model, cloud adoption is becoming easier and more affordable.What is a successful digital transformation? ›
It simply means, the ability to be efficient, rapid and able to adapt in order to stay ahead of the pack using design and technology as enablers. All processes, systems and organisational structures that act against such intentions, will play a huge part in why some digital transformation initiatives will fail.Why do 70% of digital transformations fail? ›
There are many reasons why digital transformations fail, but the most common reasons are not meeting deadlines, failing to stay within budget and not achieving key objectives (quality).What are the 4 steps in the transformation journey? ›
- Step 1: Identify the Right Stakeholders. ...
- Step 2: Commit to All-In Strategic Planning. ...
- Step 3: Create a Strict Timeline. ...
- Step 4: Take Responsibility for Data Security.
Jung described the process of transformation as being a four step process that includes Confession, Elucidation, Education and Transformation.What are 7 key metrics that all digital marketers should measure? ›
- Mobile traffic. Now more than ever, users spend a great deal of time on their mobile devices and phones. ...
- Cost per lead. ...
- Close ratio. ...
- Channel-specific traffic. ...
- Exit rate. ...
- Conversion funnel rates. ...
- Top landing pages. ...
- Wrap up.
- Customer Acquisition Cost. Customer Lifetime Value. Customer Satisfaction Score. Sales Target % (Actual/Forecast) ...
- Revenue per FTE. Revenue per Customer. Operating Margin. Gross Margin. ...
- ROA (Return on Assets) Current Ratio (Assets/Liabilities) Debt to Equity Ratio. Working Capital.
The four most widely accepted key components of corporate strategy are visioning, objective setting, resource allocation, and prioritization.What is a digital strategy analysis? ›
Digital strategy focuses on using technology to improve business performance, whether that means creating new products or reimagining current processes. It specifies the direction an organization will take to create new competitive advantages with technology, as well as the tactics it will use to achieve these changes.What should a digital strategy contain? ›
Either way, a digital strategy should be customer-focused and address ways to improve the company's social media footprint, organic search results, customer engagement and brand recognition. It should also include strategies for reputation management.
What is a digital strategy? A digital strategy is a written plan that clarifies your online goals and helps you put the right technology and processes in place to achieve these goals. Your online goals relate to your overall marketing objectives and what you want your business to achieve online.What are the six strategy cycle? ›
Read ahead to learn more about the six vital elements of strategic planning: vision, mission, objectives, strategy, approach, and tactics.How do you articulate a digital strategy? ›
- Define Your “Why?”
- Create Your Brand Story.
- Define Your Goals.
- Develop Audience Personas.
- Create a Journey Map.
- Identify Key Channels.
- Develop a Content Strategy.
- Draft a Content Calendar.
- Set Business Objectives. ...
- Goals and Targets. ...
- Target the Right Audience. ...
- Establish KPI's Early. ...
- Measuring Marketing Activities. ...
- Unique Visitors. ...
- Search Engine Traffic. ...
- Bounce Rate.
Digital Strategy vs.
Areas of your business that might undergo digital transformation include: Customer Engagement. Customer Experience. Logistics and Operations.
- Get buy-in. Before you can start building your digital transformation framework, you need buy-in from the top down. ...
- Secure funding. ...
- Assess your current state. ...
- Identify your goals and desired outcomes. ...
- Conduct a gap analysis. ...
- Create a digital transformation roadmap.
Digital Marketing KPIs or Key Performance Indicators are quantifiable goals that help you to track and measure success. In a changing marketing landscape, such as today in the era of digital disruption, it's more important ever to plan your short-term and long-term KPIs.What are the 4 key metrics to measuring digital marketing? ›
- Total Cost of Digital Marketing. Total Revenue Attributed to Digital Marketing - Total Cost of Digital Marketing.
- Cost Per Lead. Total Spent on Campaign / Total Number of Leads.
- Revenue Per Lead. Total Attributable Revenue / Total Number of Leads.
The strategies at each level of the organization are known by the name of the level. Corporate level strategy. Business level strategy. Functional level strategy.What are the five steps of strategic analysis? ›
- Clarify Your Vision. The purpose of goal-setting is to clarify the vision for your business. ...
- Gather and Analyze Information. ...
- Formulate a Strategy. ...
- Implement Your Strategy. ...
- Evaluate and Control.
- SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis.
- OKR (Objectives and Key Results)
- PEST (political, economic, socio-cultural, and technological) analysis.
- Balanced scorecard.