Digital transformation has come a long way from being that ‘shiny thing worth chasing’ to a crucial strategy for the enterprise’s survival. The pandemic was the biggest proof that enterprises that don’t transform face the risk of shutting down. That’s why several enterprises have already started working towards transformation.
According to a McKinsey survey, 64% of enterprises intend to build a new digital business by 2023.
Enterprises understand that it’s the only way to keep pace with the new customer demands and stay ahead of the competition. They realize that yesterday’s wow will become today’s ordinary in the current dynamic landscape.
Digital transformation is essential in enhancing customer experience, employee productivity, operations, and adopting a culture of innovation.
While the idea of digital transformation seems appealing, enterprises often face challenges such as:
- Skill gaps
- Lack of a solid transformation strategy
- Security and compliance concerns
- Resistance to change
Over 70% of the transformations fail. Hence, it’s important to know the do’s and don’ts to make it successful.
5 Do’s And Don’ts Of Digital Transformation
- Plan a detailed strategy: Although the larger goal of digital transformation is to change or improve the existing business processes, enterprises need to have a clear strategy for transformation. This would serve as a roadmap for the enterprise to stay focused on achieving its goals. The detailed plan must cover critical components such as re-engineering processes, choice of technologies, and team culture. A strategy will enable the enterprise to proceed with transformation seamlessly without any hiccups.
- Get executive support: Digital transformation is a huge undertaking. Hence, it’s important to get executive support. A backing from C-level executives would encourage business heads to consider the transformation and reach a consensus quickly. It will reduce the frictions during the process and make change management easier.
- Prepare for change management: Change is always faced with resistance as employees fear an uncertain future. Many employees fear losing their job to machines or find it hard to adapt to the changes. That’s why change management is a critical component in digital transformation. The business leaders must communicate regularly with employees to address their concerns, be transparent about the change, and retrain them to help adapt to new processes and technologies. Make change comfortable for employees.
- Measure the outcome: Enterprises must measure the outcomes regularly to ensure that it meets the transformation goals. To measure the outcome, business leaders must first identify the key metrics that would impact the business. These metrics could be an improvement in productivity, reduction in error rates, shorter turnaround time, or better Net Promoter Score (NPS). By measuring the metrics regularly, enterprises will get a clear perspective on what’s working and what’s not. It will enable them to make changes where needed to achieve the goals.
- Work with a trustworthy partner: Always work with a trustworthy partner who understands the business needs and tailors the transformation plan accordingly. The partner must have a proven track record and must be willing to align with the values of the enterprise. This will help both the enterprise and the partner work hassle-free and achieve the transformation goals successfully and quickly.
- Set unrealistic goals: Enterprises often set lofty goals that are unrealistic and sometimes unachievable. It would also be a bad idea to prioritize small wins over long-term and sustainable goals. Patience is the key here. Enterprises must accept that gradual progress and micro-improvements in daily operations are as much an improvement as earning huge profits or becoming an industry leader. Realistic goals will allow the enterprises to realize the true potential of digital transformation and encourage them to pursue it further.
- Limit the scope to technology: It’s time to debunk the biggest myth that digital transformation is about replacing legacy, monolithic technologies with modern ones. This myth is one of the reasons why enterprises focus more on choosing the right technologies than on other aspects such as a change in processes, reskilling employees, and changing organizational values and culture. Enterprises must also be prudent while investing in technologies as not all of them are the right match for their business. Too many tech stacks will make the whole experience clunky and confusing for employees. They must know the purpose of all technologies to make an informed choice.
- Undermine upskilling: By 2025, there will be more than 149 million new jobs in the market that require digital skills in the areas of cybersecurity, machine learning, artificial intelligence, etc. However, the skills gap is so wide that enterprises are unable to fill them. The only way to address this issue is by upskilling the existing employees and enabling them to adapt to the new technologies. Training is extremely crucial in digital transformation. Not paying attention to it would make the entire transformation efforts futile.
- Ignore security: In all the excitement of digital transformation, enterprises often ignore the importance of security. They could face huge repercussions if a tool exposes its data and infrastructure to cyberattacks and other threats. This was particularly witnessed during the pandemic when data breaches increased by a whopping 600%. Enterprises should be careful while choosing technologies. They must ensure that their chosen technologies are secure and aligned with their security policies. Enterprises must also revisit their security policies and update them as technologies change and become more sophisticated. They must also monitor their technologies regularly and take preventive measures if they find something unusual.
- Choose the wrong vendors: According to a study by IFS, 37% of digital transformation projects fail due to bad advice from vendors. Enterprises often choose a well-known vendor even if they are not the right match. Even if they find the right partner, unnecessary project delays or misaligned expectations could derail the transformation process. That’s why enterprises must choose the right vendor. A thorough background research and peer review will help enterprises make more informed decisions.
Digital transformation is not a one-time process. It is a continuous process aimed at future-proofing the business. Hence, enterprises must be willing to be patient and take a phased approach to transform their business. They must define the goals, build a roadmap, implement the transformation strategy, test it, and ensure continuous innovation to keep pace with the changes. Simply put, transformation must become an active part of their organizational culture.
Transformation is never easy, and there are chances of technology partners misleading the enterprises into wrong choices.
At Sagacity, we understand the business needs and apprise enterprises about the risks and opportunities involved in digital transformation. We build end-to-end futuristic solutions for enterprises.
To know more about our offerings, contact us.