How to do digital transformation strategy | Kagool

How to do digital transformation strategy

How to do digital transformation strategy
17th August 2020
News and Insights

Each business has a unique set of goals and vision on how it plans to innovate. But what are the key steps for developing a successful digital transformation strategy?

Digital transformation might not be a ground-breaking new concept, but it’s certainly an evolving process that organisations across all sectors are recognising as a priority for their future success. What digital transformation strategy meant a decade ago is somewhat different to how we regard it today. When we consider digital innovators like Netflix, Uber and Amazon Prime were only starting to transform how audiences shop, socialise and operate with brands around 2010-2012, it puts digital strategy timelines into perspective. It also reminds us how important it is for businesses to stay agile and ambitious to keep moving forward in a digital era.

What are the main areas of digital transformation strategy?

When your organisation is looking at how to do digital transformation strategy, there are four core areas to consider:

  1. Process – Integrating third-party technologies like big data and machine learning into everyday processes can be used to enhance customer experience, productivity and drive revenue.
  2. Business model – Putting digital at the heart of your business strategy allows for innovation in an entire market. Itunes or Spotify are great examples of how music was marketed, delivered and consumed by audiences that transformed the industry.
  3. New market or domain – We know technology changes at pace, domain transformation allows businesses to move into new lucrative spaces digitally to reach new audiences and serve existing ones seamlessly.
  4. Company culture – This is a long-term plan and getting the buy-in from the top down throughout the whole organisation is a key driver for change and impacts all of the above.

How to do digital transformation strategy well

Despite the term being longstanding and perhaps for some overstaying its welcome in meetings and articles, there’s still an undisputed quest from businesses to achieve success from digital transformation. ‘Digital transformation’ related keywords receive over 60,000 online searches each month, with ‘what is digital transformation’ ranking as the most popular question. But businesses continue to report their failings in getting this right, with just 20% of companies reporting that they have a strong digital strategy in place.

This doesn’t need to be the case. It points to a knowledge gap around what digital transformation actually means – some companies look at isolated web projects or enhancements to their site and call this digital transformation, but more often it’s a disconnect between our objectives as businesses and our ability to execute the change needed to achieve them.

How to digital transformation strategy successfully, comes down to good analysis and planning, the ‘do-ing’ should simply follow those steps. So what should decision makers be considering at the embryonic stages?

Leadership

The impetus for change can come from anywhere in an organisation: marketing, IT, or customer services. But its value needs to be recognised, nurtured and spread across the entire business. At board level and across the C-Suite it’ll be being led strategically, maybe by a dedicated CIO or CTO, or from a brand perspective by a Voice of Customer team or CMO. Its imperative that everyone in the business has bought into the vision of putting digital at the centre of success and doing things differently, better, and leading on change.

Don’t be afraid of change being bottom-up. A kernel of an idea from a marketing manager for integrating the CRM and your marketing outreach channels so you can track behaviour and analyse conversion smarter, for example, can be the ignition for a wider-reaching, transformational strategy if nurtured and developed.

Everyone in a leadership role will already be confident in evolving their departments, it might just mean a slight change of focus or smaller projects alongside what you’re already doing.

1. Define your objectives and focus areas

Before you start, identify what your end goals and objectives are. The obvious, most prevalent objectives centre on the external challenge of improving customer experience.

People shop online and in-store. Do both of these experiences match and are you using one method to help understand the behaviours of the other? Digital transformation doesn’t just live online. We can use offline behaviour to drive online personalisation strategies and conversion, while using the data we capture from online behaviours to drive better experiences in-store. But this requires a joined customer experience strategy that involves the collaboration and effort of often siloed organisational departments.

Other objectives may be aligned to internal challenges, such as freeing up employees’ time that’s being wasted because old processes are embedded into the business. These processes can be centralised and streamlined using technologies that complement and integrate with each other.

You might instead have broader focus areas that may be specific to the brand and how it interacts with your customers. Coke set cultural transformation as a strategic objective – wanting to “touch people’s hearts and love our brands”. This objective at the centre of a wider digital transformation programme led to strategies that utilized short form content in a smart way and the use of emerging technologies like augmented reality to emotionally resonate with customers in more profound ways.

2. Can the business structure handle the change?

Consider the operating model that is going to best suit your digital transformation strategy and invest in it long-term. While improvements will be made in the short term, it’s important to take your time in making sure the strategy is working and there’s a growing culture within the company. It’s not a quick fix. The evolution of your operating model will be 10+ years. You won’t transform overnight.

For a new operating model to work there’s an internal cultural shift that needs to take place, where everyone across all departments “gets it” and has bought into the desired change. Communicating that ownership of change isn’t just top-down, as discussed earlier, will play an important part. Identify the people across all departments that can own the strategy and create the right structure and environment for them to work well together and succeed.

3. Do your research

What technological and customer behaviour shifts have disrupted your industry? What trends are emerging that you need to get ahead of? What technology solutions seem to be able to future proof your business in the wake of these shifts? How does emerging technology and the rise of the IoT affect your customers’ behaviours and your business’ ability to function at its most efficient? How can you use data smarter to achieve your objectives?

Get under the skin on how your customers are behaving and how the business can capitalise on current and future shifts to your industry and you’ll be well on your way.

4. Engage an external partner to help you plan, surface opportunities, challenge your thinking and embed agility

Getting the help of an agency that’s done this before will help with a lot of the heavy lifting in the early stages of your digital transformation programme. If you’re looking at how to embark on this sort of journey it’s likely the business isn’t set up with the right operating model and team to manage the day to day needs of this kind of wide-reaching strategy. The cultural and operational shift that digital transformation requires, the focus and collaboration across every department that its success hinges on, might best, in the first phases, be guided and facilitated by an external party that can help you objectively navigate it. As the regular drumbeat of activities, testing and learning, and communication of successes permeates the organisation you’ll have less need for a high involvement from your agency and you’ll be on the road to self-sufficiency.

We can help you learn how to do digital transformation

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