Defining and driving digital transformation
Around the world, companies are executing on digital transformation tactics without defining exactly how (or why) they want to transform their operations. They’re not transforming; they’re simply reacting.
Salesforce defines digital transformation as “the process of using digital technologies to create new – or modify existing – business processes, culture, and customer experiences to meet changing business and market requirements.” We’re hearing the term “digital transformation journey” for a reason. It is an ongoing process much more than it is a destination. And, while it may be an overwhelming concept for many business leaders, when executed well, digitally transformed processes create the kind of agility that sustains organizations through even the most uncertain of times.
This kind of agility doesn’t mean adapting to every trend. It means setting up systems for visibility and carefully considering which technologies fit the needs of customers, as well as help employees work smarter. According to IDC, digitally enabled organizations create processes that “leverage their superior use of informational insights.”
No matter where an organization is on its digital transformation journey, success depends on a top-down approach, which requires a delicate balancing act. Digital transformation should come from the CEO, but its execution relies heavily on buy-in and leadership from management. It requires change management as much as IT investment, and the “why” matters as much as the “what.”
Just because you're implementing AI or RPA doesn't mean you're doing digital transformation. That's just another IT project."
What digital transformation
What makes digital transformation different is that it’s been talked up as the solution to every organization’s every problem, but without much clarity about what exactly it is. In order to figure that out, let’s work backwards. First, consider what it isn’t.
Maybe new accounting software has sped up back office processes. Customer service has improved with a self-service app. Sales has seen an uptick in new customer acquisition after implementing a CRM. But soon, efficiency gains become siloed, and improvements in customer satisfaction and acquisition plateau. Adoption is low for the new marketing project management solution because no one has trained the team to use it. Now, sales and marketing are working from separate content solutions, and sales enablement is suffering.
Even with the highest functioning technology solutions, it’s not hard to see what happens when departments aren’t aligned.
“Just because you’re implementing AI or RPA doesn’t mean you’re doing digital transformation,” says Valt Vesikallio, senior vice president of Global Services at Hyland. “That’s just another IT project.”
True digital transformation shouldn’t rely on technology alone. It doesn’t come from a box, and it can’t be found in the cloud. (Although some of these solutions can be components of a digital transformation plan.) It’s not just RPA, CRM, SaaS or even a digital patient record. It’s a cultural shift that reimagines how the organization functions from the inside out.
Organizations tend to lack clarity, long-term planning and top-down support in their digital transformation efforts.
Vesikallio often sees companies facing these challenges:
Common digital transformation challenges
It may seem obvious that a value prop, management buy-in and a plan for the future should be necessary components of any major operational shift. But, because of the nebulous definition of digital transformation, the lag time between concept and implementation, and the inability to define its role in true organizational change, enterprises often suffer from a disconnect between digital systems and a digital-driven culture.
What digital transformation
While it looks different for every organization, depending on goals, customer experience, global reach, and a long list of other factors, it’s safe to say true digital transformation allows organizations to:
Benefits of digital transformation
Of all these advantages, the ability to adapt quickly can’t be overstated in the current environment. For example, the global pandemic forced many companies to take their workforces almost completely remote. Tech giants like Apple, Google, Facebook, Microsoft and Amazon have the infrastructure in place to stay remote as long as necessary. And it’s not just about their size and profitability. A much smaller company with an engaged culture, flexible mindset and enterprise-wide content platform will weather sudden and immense change much better than a profitable behemoth with outdated employee policies and analog processes.
We’re all learning hard lessons about adaptability and productivity. Digital transformation addresses many of these pain points by forcing an examination of the employee experience.
Jeffrey Mann, a VP analyst at Gartner, points to research that says the digital experience for workers should match that of customers. “Too often, the employee experience is an afterthought for business and application leaders. They ignore the relevance to workers of the proven lessons from marketing and customer relationship management … Many of the same techniques used to create happy customers can be applied to encourage productive employees.”
This is where the cultural shift comes in. It’s impossible to anticipate every challenge that might slow or completely derail operations. But leaders can certainly put themselves in a position where the organization’s viability is more reliant on a flexible, digitally equipped workforce than on paper, brick and mortar.
The digital transformation toolkit
We’ve established that true digital transformation isn’t possible without deep cultural change. Next is understanding the tools and technology that make the journey possible.
According to IDC, intelligent automation consists of innovative technologies that anticipate the needs of users and customers, helping organizations and their employees focus on high-value tasks to develop more meaningful, relevant connections with the people they serve. Intelligent capture, robotic process automation and other technologies perform activities “such as finding, identifying and evaluating information for data-driven decisions.”
Intelligent automation contributes to the future workspace by providing “anytime/anywhere access to content and content-centric workflows, enabling secure collaboration and contribution. Automating content-centric workflows offers cost, productivity, collaboration and operational advantages.”
A low-code content services platform minimizes the need for costly custom coding, allowing companies to configure a variety of business applications — including dynamic case management and process automation — that fill in the gaps between line-of-business systems.
By 2021, IDC estimates that 25 percent of enterprises will enable non-developers to handle their low- to mid-complexity process improvements using low-code software focused on ease of use. “Developers will also continue to use low code because it is easier to design complex applications by using visual development, and point-and-click configuration and functions.”
Data transparency is the visibility into how information is secured, where it is stored and who has access, according to IDC. It’s an essential part of improving compliance efficiency and enhancing customer experiences by speeding response to customer data access requests and reassuring consumers that their data is private and protected.
SaaS and cloud applications
Software as a service is a way of delivering centrally hosted applications over the Internet. SaaS applications are sometimes called web-based software, on-demand software or hosted software. Whatever you call them, SaaS applications run on the service provider’s servers.
Cloud computing uses a network of remote servers hosted on the Internet to store, manage and process data. Digital enterprises utilize SaaS and cloud applications for greater agility and enterprise-wide efficiency.
Intelligent CXM platform
If tech isn’t driving better customer experiences, what’s the point? The intelligent customer experience management (CXM) platform is AI-enabled and built on deep customer information. Bringing data and intelligence together, intelligent CX gives organizations a deeper understanding of their customer so they can deliver better, more personalized experiences at scale.
IDC estimates “companies will spend $42.7 billion on CX-focused big data and analytics, and another $13.9 billion on CX-focused AI tools growing to a combined $90+ billion in 2022 simply trying to maintain parity with their competitors and their customers.”
While it looks different for every organization, depending on goals, customer experience, it’s time for a single source of truth for the organization’s information, to integrate systems, to consider where process automation can improve efficiency, and to seek out a more secure solution for sensitive customer data. It’s time to be permanently agile.
According to Danya Cotte, manager of Business Process, Contracts and Procurement Operations at General Atomics Aeronautical Systems, addressing the four most common challenges of digital transformation first requires internal transformation. In other words, organizations have to ready themselves for the cultural shift far ahead of implementing the technology tools.
It requires “a change management discipline,” says Cotte. “It needs to be built into your project plan.” She stresses the importance of identifying asks and risks.
After successfully working through a transformation at General Atomics, Cotte offers four ways to increase the odds of success:
1 Committed ownership with a clear vision
Leadership needs to know – and communicate – the value proposition. Develop a roadmap and an end game, and include future stakeholders from the beginning. Don’t just assign transformation owners; empower them. Delegate, stay engaged, set a clear business case and then remove barriers. Drive change management discipline and address the “frozen middle ground” by identifying and empowering change-makers in middle management. Help everyone involved understand the “why” as well as the “what.”
2 A solid foundation
Have a firm strategy for the technology stack, processes and people necessary to drive the transformation. Dedicate resources to the transformation, not just implementation.
“You want to have a technology stack that can respond to these challenges,” adds Vesikallio. “A bad process is still a bad process, no matter what technology you’re using. So you want to make sure your business is driving technology decisions, not just IT. But you also want to make sure you look at the skillset of IT and invest in the IT function.”
3 Implementation iteration
Set up an iterative project approach with identified MVPs throughout the organization. Check on progress, get feedback and create opportunities for wins. The worst outcome is to wait two years to roll out, only to realize it’s not going to work.
User experience is a key part of expanding beyond pilot mode. One size does not fit all. Improve adoption with solutions that integrate and look and feel like the interfaces users are familiar with.
"When I've seen digital transformation go well, executives have been deeply involved," says Vesikallio. "They provide clarity to the business case, remove barriers and play a key role in change management."
A successful digital transformation begins with a clear definition, thrives on executive-level support and positions an organization to be permanently agile, whatever the future may hold.