From accelerating strategic plans to rapid innovation, businesses have been forced to step up their digital transformation in recent times. A recent study from McKinsey estimates that the pandemic accelerated technology adoption among businesses by three to four years.
However, this is often easier said than done. There are many roadblocks along the way – from securing buy-in to managing expectations – leaders need to take careful measures in order to become ‘digitally mature’.
There are three essential steps that leaders must take to be successful:
1. Get senior leadership buy-in
When leading digital transformation, a thorny patch you are likely to encounter is securing buy-in from senior stakeholders within your organisation. This can be for two reasons: because of personal interest (some stakeholders will cling to the status quo on which their careers were built) or because of a lack of understanding of the benefits of going digital.
While you may not be able to work on the first of these two reasons, the second can be easily solved by highlighting the benefits digital transformation can bring to the whole business, starting from your most valuable resource – your people.
A good thing that has come out during the pandemic is a change of attitude towards technology-wise. What under normal circumstances may have previously been considered “nice to have”, have now become a “must-have”. Employee engagement tools, for example, have been key in ensuring efficient remote working practices and become a crucial part of retaining talent.
According to Microsoft’s Work Trend Index report, over 40% of respondents were considering leaving their job in 2020, while in the UK job vacancies reached the highest point in 20 years last November. Technology – when combined with the right company culture – can help in maintaining a low employee churn rate, which in turn can save businesses money from lost productivity and employee replacement.
Because digital transformation is not localised to one specific business part and should be extended across the company, its benefits can be felt across all of its operations, including improved efficiencies and customer experience which, in turn, bring cost savings and increased revenues.
2. Set digital transformation expectations
Digital transformation is inevitable, but the pace at which it happens is a case-by-case scenario. One of the biggest reasons for failure is having unrealistic expectations and underestimating the amount of effort, time, resources, and money a digital transformation project will take.
A digital strategy usually follows three main steps:
- An exploratory stage, where different technologies are considered and the project planning takes shape.
- An initial roll out of the project and monitoring of results.
- The completion of the expected project within budget, time, and resources.
The key to the success of a digital transformation project is setting and managing realistic expectations in terms of the time, people, and budget needed with all stakeholders. Leaders need to define achievable goals and benefits such projects can bring to the business. According to a 2020 BCG study, although around 70% of digital transformation projects fail, if you get it right, they can deliver on average 66% more value and 82% improved corporate capabilities.
3. Scaling digital transformation projects
Whether you’re scaling from a startup to enterprise-level, or expanding globally, scaling digital transformation is not an easy task. With tech adoption accelerating like never before, how can leaders successfully scale digital transformation in an organisation?
The main focus should be aligning IT and business goals. This can be done by closely following the company roadmap, assigning the right people to manage and drive it, and leveraging data and business analytics.
According to a 2021 McKinsey survey, 64% of respondents think their companies need to build new digital businesses to get them beyond 2023. Notably, the same report highlights the importance for leadership team members to become more tech savvy and have better knowledge and experience of the new technologies that their business needs.
To be truly transformative and successful digital transformation needs to be embraced by everyone in the business.
The Bottom Line
Digital transformation is a necessity in order to keep up with the constantly changing landscape. If implemented correctly and extended in the company, its benefits can be felt across all of its operations, including improving customer service, making the company more efficient, and cutting down business costs.
By identifying and incorporating the above key factors throughout the stages of your digital strategy, you can ensure your digital transformation journey will be in a good position to avoid failure.