In Part 1 of our Digital Innovation & Transformation blog series we defined what is Digital Innovation. In Part 2 we spoke about how Digital Innovation can transform businesses. In Part 3 we will explore how to create a Digital Transformation strategy that creates a roadmap to get your business from where you are now, to enhancing and improving your business.
Before we get to creating the strategy, it is important to help you understand the difference between Digital Innovation and Digital Transformation, to better understand what is needed to successful implement this strategy.
Digital Innovation is the idea or technology that is the catalyst within the company that leads to Digital Transformation. Digital Transformation is the step by step implementation process of that new technology, and the result or change of what follows.
Therefore, for a company that wants to improve its systems and processes they may implement technology such as isurvey. In this case isurvey would be the Digital Innovation, the tool that is used. Once the technology is implemented, the result created by the process would be increased efficiency and productivity, and fully digitized business operations.
This process of ‘How’ it is done, and the result would be Digital Transformation. Changing the company from one level of operation, to a more advanced one.
The Digital Transformation Strategy
Creating a Digital Transformation strategy is more about the strategy than the technology. This is because you can create the technology, but without understanding the purpose of that tech, and how it contributes to the company’s strategic growth and end goal, it has no real value to the company.
At Ingenuity we like to use the analogy of the architect and the plumber. The architect is the person who plans, designs, and reviews the construction of the entire building process. In other words they are a part and responsible for the entire process from the beginning phase through to implementation and end result. The plumber only comes in to install the pipes and that’s it.
The plumber sees only the specific task that needs to get done at that specific moment. They don’t see the overall scope of the project and how their work contributes to achieving the end result. However, the architect sees the overall vision of what the building will look like, what is needed, and what needs to be done to see the entire process through and achieve the result.
It is similar when approaching Digital Transformation. Installing a piece of technology to accomplish a specific task such as eliminating long lines at the bank is the plumber. The strategy and integration of several technologies to accomplish a singular goal is the architect.
The 6 Steps to Creating a Digital Transformation Roadmap
Now that you understand the right mindset in how to approach Digital Transformation, let’s break down the step-by-step approach of creating the roadmap to get you there.
Note this is the same approach we use at Ingenuity to achieve different levels of Digital Transformation within our company and for our clients.
1. Assessment
The first thing that is needed is to assess where the company is to identify where it needs to be. This involves identifying a structured approach to assessing your digital maturity, and understanding not just the technology, but the ‘big picture’ of what digital engagement means to the business.
There are a few things that must be a part of this assessment:
Vision & Core Values
As mentioned, implementing technology without understanding how it helps the company achieve its vision and end goal adds no real value to the company. Understanding your company’s ultimate vision, and the core values that guide that vision, will help to know which method and approach is best for your company. It will also help you identify who are the best people to partner with outside of the company to help the company achieve its end goal.
For example, we have a client who values customer experiences more than anything else. As such, all their business decisions will be influenced by this core value. Trying to implement a Digital Transformation strategy for them based on increasing profits for each Quarter would be counterproductive, even though improving their customer experience indirectly drives profits.
Existing Problems and Challenges
Once you have identified what the vision and core values are for the company, the next thing is to identify the problems and challenges that exists within the company. These are the ones that need to be resolved for the company to grow.
Firstly, you should look at problems and challenges from a bird’s eye view of the overall company. Things such as what is negatively affecting revenues and cash flow, growth, stock performance, market share, competitive advantage, etc.
Secondly, you should look at problems and challenges on a deeper departmental level. Things that are negatively affecting brand image and awareness in Marketing, or closing deals in Sales, employee productivity in HR, efficiency in Operations, or customer satisfaction in Customer Service and Support.
The reason this is necessary is to identify if there are any possible technologies that can be implemented to alleviate these pain points. These solutions should digitize and automate the entire process for each, making it easier for all stakeholders involved. Additionally, each department should be integrated as a core network working together as a whole, each playing a role in achieving the end goal and vision of the entire company.
Phase of Digital Transformation
Next you should assess which phase of the Digital Transformation process the company is at. This may be a bit tricky, and you may need an expert to assist with this one. However, let’s give you the basics of the three levels of Digital Transformation. These are:
Basic Digitization
Semi Digitization
Complete Digitization
The 3 Levels of Digital Transformation
Basic Digitization
This first step is usually for companies that have no digitization, or any technology within their company that helps them operate seamlessly. Typically, they are using legacy or ‘old’ technology that creates inefficiencies and doesn’t allow for much flexibility or integration with new technologies. They may also be heavily reliant on a manual approach to daily operations.
A Basic Digitization approach allows for simple and minimal implementation of new technologies. It focuses on the front-end or the interaction between the company and its customers. It is usually in the form of an upgraded website and/or mobile app, however, the back-end typically remains the same.
This first phase is for organizations that need a quick win to improve customer satisfaction and ease-of-use of existing products and services, or to eliminate manual operations.
We had a client who we did an Basic Digitization for. They needed a mobile app and connecting website interface that would allow their customers to perform certain financial transactions on the go, such as applying for loans, checking their account balance or making outstanding payments. The implementation was very basic and wasn’t automated, so a part of the process was still manual.
Semi Digitization
With this next phase of digitization it’s not just about digitizing the front-end, but also how the front-end application integrates with the company’s existing systems and databases. This is where automation of business processes takes place.
A perfect example of this is one of our current clients who offers loan services for growing businesses. Before their entire application process involved a lot of manual work and a paper-based approach to the process. Though they have a website and app, the process was still very labour-intensive.
For this level of digitization we implemented a Digital Transformation strategy that would allow for digital onboarding of the entire process from start to end. Once the data is collected from applicants, it goes through an automated sequence where several checks are done automatically to see if the customer is approved for the loan. If they are, key e-signatures (electronic signatures) are used to approve the loan. If not, then the application is sent back to the customer rep for changes to go through the process again.
The process is integrated, and the data is stored within the company’s database and existing content management system. However, though integration and automation takes place, the technology only integrates with a small part of the entire core system. In other words, it only affects one aspect of the company’s operation, and not the entire operation and core infrastructure of the entire company.
Complete Digitization
The final level of Digital Transformation is a fully digitized approach. This is where a company decides to completely replace the entire existing legacy system they have been using for years, and implement completely new technology. This is where all integration and automation happen across every department and every aspect of the company.
Furthermore, everything is integrated into one centralized core system for maximum efficiency and data analysis and mining, giving the company a full view of the entire network.
This level of Digital Transformation is an ongoing process. It isn’t simply implementing new technology or getting things automated. We have clients who we have been working with us to execute this process for the last 2-3 years, and we are still working. Why? Because with this level of transformation upgrades and maintenance are constantly needed to ensure optimal output for the company.
2. Needs Analysis
Now that you have done your assessment, and understand where the company is currently, the next step is understanding what is needed to take the company to the next level.
What this means is understanding:
What are the short, medium, and long-term goals you want to achieve
Which phase of the Digital Transformation are you currently
What is needed to go to the next level of Digital Transformation
How will this next level help you alleviate your pain points and challenges
How will this next level contribute to the company’s goals
Who do you need to partner with to help you get there
For this Ingenuity typically does what is known as a Requirements Gathering session where we seek to understand more about our client, what they want to achieve, and what their needs are. By doing so it helps us develop a strategy that best fits our client.
3. Executive Buy-In
The third thing that needs to be considered when implementing a Digital Transformation strategy is getting executive buy-in.
This is something almost no one tends to think about until they are in front of management trying to convince them why Digital Transformation is needed. However, it is imperative to think about before going any further. This is because without buy-in from decision makers, no matter how good of an idea it may seem to you it will never be implemented.
There are several things to consider that will help you gain buy-in from decision makers:
Cost of project and technology
Scope (how big it is)
How long it will take to implement
How much of a need is it in the immediate
Does it contribute to the company’s overall objective
The best way to get executive buy-in is with these key points:
Success Stories- show them other company’s (preferably competitors) who implemented the same strategy and saw results
Stats- show them studies that have been conducted by reputable company’s that suggest the need for Digital Transformation
Pain Points- show them how if a particular pain point isn’t addressed how it will negatively affect the company (revenues, growth, corporate image, etc.)
In order to get buy-in you need to focus on which problems are causing the greatest harm to the company or department, which needs urgent and immediate attention, and which can be solved in the immediately with little effort or cost.
In client meetings we call this low hanging fruit. We ask what can we partner with them to solve that will require the least amount of resources and their time, and will be the easiest problem to alleviate. This way the executive team will see it as little to no risk to the company, and willing to take a chance.
4. Project Execution
The next step in the Digital Transformation roadmap is understanding its execution. You should treat Digital Transformation as you would any other project. This means it should have timelines, deadlines, objectives, and responsibilities assigned.
We use what we call Ingenuity’s Proprietary Software Engineering & Quality Assurance (PSEQA)TMLife Cycle to what we do. This uses Dev Ops and Agile principles in our execution.
5. Project Maintenance & Support
Once you have executed the phase of Digital Transformation based on where your company is currently, the next thing you should have in place is how you will support and maintain it.
Remember Digital Transformation is a never-ending process, because technology constantly changes, consumer behaviours change, company’s goals and directions change, especially if there is new leadership. Simultaneously, new competitors enter the market and there are new Digital Innovations ever so often that can positively or negatively affect the growth and sustainability of your company. Therefore, the company needs to have a very agile approach in its transformation efforts.
It’s not just about installing a new technology and strategy then leaving it. There needs to be mechanisms and systems in place that can collect and analyze data, plus mine the data to have meaningful insights into how the technology is contributing to the overall vision and objectives of the company. Furthermore, you must be able to use that data to incorporate more effective growth strategies, to account for changes in the market and business environment.
6. Scale
Once you can sustain your current level of Digital Transformation the next step is to scale to the next level. To do this we simply repeat the process from Steps 1-5.
Conclusion
There are several steps involved in creating a Digital Transformation strategy and roadmap to helping your company achieve its short, medium, and long-term goals. The first step of any strategy is to assess where you are as a company and where you need to be, then understanding what is needed to get you there.
Remember it’s not just about implementing technology, but you must understand how that technology plays a role in the bigger picture of the company and its goals. Also, understand that technology without the right strategy is a waste of time, and can become counterproductive and a costly error in judgement.
Ensure that your strategy and roadmap is geared towards where the company wants to go, and not just based on what new tech is available in the marketplace.