Digital transformation has gone into hyperdrive—thanks in large part to the recent pandemic. As consumers, we’ve been pushed towards ordering food through apps, shopping online, and utilizing digital services. As businesses, we’re finding new ways to operate remotely and connect with customers digitally, and adopting the technologies to do it all efficiently.
Mammoths like Nike and Home Depot have already gotten a headstart on their journeys towards the digital future. They’re transforming their traditional business models into dynamic, technology-first models that enhance the customer experience, shed costs, and improve the stock value. Nike embarked on a two-year digital transformation journey and improved its data analytics and customer experience. Stock prices improved 69% two years into their transformation. Home Depot launched a longer-term digital transformation effort in 2017, dedicated to creating “One Home Depot”—a seamless experience across all digital and traditional touchpoints. While returns of this multi-tier program have been slower, positive results are projected and the company is funneling even more resources into the transformation.
I could go on with various examples of companies embracing total technology transformation in every vertical, from manufacturing to healthcare. But let us get into the guts of why transforming your technology, following certain digital transformation pillars, will be critical to your business, and what really needs to be done.
While “transformation” sounds complicated, the pillars that it stands on are not. “Digital transformation” (for better or worse) has been associated with B2C companies, and as a result, some B2B business leaders don’t think they need to change. That is far from truth and reality: Digital transformation is simply a way of talking about the larger technological shifts that ALL organizations need to make. While the transformation process may be different for B2B and B2C organizations, the foundational concepts are the same. All transformation requires a strong culture, a mindset shift, and an understanding of these basic pillars to be successful.
Digital transformation pillar #1: Customer experience
While it’s customary to start with vision, I say start with your customers (or clients if we’re talking B2B). You already have a business that has attracted customers and without them, you don’t have a business. Understand how your audience is evolving, trends in how they experience their current world, and how they intend to experience it in the future. After all, digital transformation is all about applying digital solutions, processes, and ideas to enhance the customer experience.
Understanding the core tenets of what needs to be evolved along the customer’s journey provides you with an early roadmap of your business evolution. This might require evolving your talent pool, culture, and technology paradigm. One way to achieve this understanding is to gather your key customers along with people from your company and experts in your field and ask them a few basic questions: What would they buy from you, what would they not, and why? What would make them buy more? How does your company stack up against competitors? Do you know our customers inside out? What does that mean? Do you want more customers? If yes, what kind? This deliberate, customer-focused approach will reveal a ton—some of it possibly even painful to hear. But this step is absolutely critical to the success of your transformation
Digital transformation pillar #2: Employee experience
Technology transformation impacts more than your customers. Change is inevitable and for change to stick, you have to humanize it. Just like customer experience, understanding your employees’ experience—current and desired—gives you a strong pillar to build your journey on. Understanding your customers helps you establish the right goals, understanding your people helps you get to those goals. Transformation happens from the inside out. Companies that are transparent with, value, and invest in people experience easier transformations because of the loyalty and support they’ve built among their teams. Keep in mind: Every interaction that the employee has within your organization is critical and will have a measurable impact on your organization, your technology, and your brand.
Digital transformation pillar #3: Vision & strategy
At the heart of the transformation are vision (where you want to go) and strategy (how you get there). The vision needs to be easily understandable, relatable, and backed by a clear plan to achieve the goal. This will set your business apart from the get-go. Most leaders stop at creating a vision for where they want to go—it falls apart when it comes to execution. To avoid that trap, put in the energy on two things: Performance and Health. Beyond Performance states that “performance” is what a business does to deliver improved results and experience in both financial and operational terms. “Health” is how effectively an organization works together in pursuit of the digital transformation goals. To develop and execute a successful vision and strategy, you need to ask certain questions early on: Where do we want to go? How ready are we to go there? What needs to happen to get there? How do we measure and manage the journey? What is the role that technology plays in the strategy? How do we govern the processes?
Digital transformation pillar #4: Digital connections
Approach your business assuming that everything can be digitized. Once you map out your customer and employee journeys, look at areas that are easily digitized and spend less time there: You can leverage existing research and available technologies. Where you want to spend more time is making digital connections in not-so-obvious places that add to your competitive advantage and enhance your customer experience in ways that matter. Making a digital connection isn’t permission to play with technology for the sake of playing technology. But the point is to solve a complex problem and keep it solved. That is the core purpose of technology. For example, if you are changing development practices within your organization but it doesn’t translate into a needed or better user experience, then you have given birth to a digital disconnect. Leverage digital technology to create repeatable, foundational components that help propel your technology transformation.
Digital transformation pillar #5: Cultural change
Businesses don’t transform overnight. It is achieved by taking small, iterative steps and balancing the old with the new. Culture change (let’s be honest, it needs to) is not just a job of the CIO or a handful of “change champions.” It involves every individual, starting from the CEO and spanning all layers of the organization. If culture isn’t nurtured and nourished, the journey of transformation falls apart very quickly. This is one of the most important, but also the most nebulous pillars of transformation because you are talking about intangibles. Ask yourself, is my organization open enough? Am I listening to others? Self-examine every part of your business and ask every individual what’s wrong with the current business, and then act on that feedback: prove that you heard and you’re listening. That is the first step of cultural change, which will lead you on your way to transforming your business.
The biggest challenge that I see with companies attempting technology transformation is that they see it as a one-and-done thing—a project that spans x number of years. It isn’t. Technology is ever-evolving, which means your business and your technology must be constantly changing together. As business leaders—and as software consultants—we must be willing and ready to evolve ideas, execution, and methodologies both strategically and tactically.