Key Steps in Digital Transformation

Luc Bories

- 4 minutes read - 654 words

Introduction Many organizations embark on digital transformation. Some succeed on their journey toward digital adoption, but few achieve the full metamorphosis promised by the new digital world.

There is no one-size-fits-all playbook or universal target for leaders. Every company has its own industry, operations, history, vision, workforce and financial resources.

Nonetheless, experience reveals key high-level prerequisites for any successful digital transformation.

Observe Your Environment

The first step is to learn from peers within your industry—and beyond—to broaden your perspective. This was the theme of a November seminar organized by the World Economic Forum, attended by over twenty top executives.

Digital transformation is front and center on boardroom agendas because it is both complex and critical. Leadership teams debate topics such as:

  • balancing investments in today’s opportunities versus future bets
  • winning the war for digital talent
  • funding digital initiatives
  • evolving digital programs

These discussions boil down to four focal points:

  • where your organization should head (digital strategy)
  • how that direction aligns with your business (business model)
  • which capabilities you need to succeed (enablers)
  • and how you’ll orchestrate change to reach your destination (orchestration)

Digital Strategy

Crafting a digital strategy starts by confronting three core questions:

  1. Where is my industry headed?
  2. What role will my company play in that future?
  3. How do we reach that vision while managing change at every level?

You won’t have all the answers up front. Instead, follow a strategic roadmap that delivers immediate business opportunities while steadily advancing toward your digital transformation target.

A robust strategy generates initiatives. Early projects lay the groundwork for future endeavors. Over time, aggregating these efforts will build a digitally rooted enterprise.

For transformation to stick, everyone in the organization—at every level—must be engaged. Leaders must lead by example, sponsoring initiatives with enterprise-wide impact.

Business Model

To execute your strategy, you need clear workstreams. Interviews with leaders driving digital transformation show that the primary goal is always business evolution. From there, related objectives emerge.

True digital transformation delivers real customer value and stronger business outcomes. It’s more than tech for tech’s sake.

These shifts usually manifest as:

  • enhanced customer experiences
  • digital products and services
  • new revenue models
  • operational improvements

The value goes beyond one-off enhancements. It injects lasting efficiency and opens new opportunities.

Enablers

Building on your business model, identify the enablers that align with your strategy. Any digital transformation—no matter the scale—requires implementing or upgrading:

  • data platforms and analytics: break down data silos and democratize insights
  • IT systems: add agility and openness
  • operating model: rethink relationships with customers, employees, partners, suppliers and shareholders
  • people and culture: from hiring to offboarding, adapt to cultural and human shifts

When people think “digital transformation,” they picture new technology. In reality, success hinges more on organizational and cultural change.

Technology often turns out to be easier to manage than human behavior.

The biggest challenges are recruiting digital talent, upskilling existing staff and transforming culture to become more innovative and adaptable.

Orchestration

The prior steps are challenging yet straightforward—they force hard questions about mission and goals.

Putting digital transformation into practice is far more complex. You must select, prioritize and sequence cross-functional initiatives that touch human interactions and environments.

Most digital programs begin with a pilot: a focused test with dedicated funding, top talent and strong executive backing. These proofs of concept often succeed.

But piloting is one thing; scaling change enterprise-wide is another. Major hurdles include:

  • securing ongoing funding
  • shifting thousands of behaviors
  • integrating with legacy systems
  • …and many more obstacles

Success factors often include:

  • clear strategic objectives
  • active executive sponsorship and ambassadorship
  • open communication at all levels
  • effective governance and project management

The road to digital transformation is neither easy nor cheap. It demands deep shifts and a willingness to challenge established habits.

Yet preparing for the next decade is imperative. Countless storied companies have faded or vanished for failure to adapt in time—Kodak and Nokia are prime examples.

Will you let your company miss the digital shift?