The evolution of digital transformation from marketing buzzword to actual business strategy may have been a decade or so in the making, but there is little doubt that the companies who have taken a proactive attitude to digitization will reap the benefits. Thanks to a combination of a tech-savvy connected society and the pandemic-driven requirement to display a level of digital maturity, there has been a marked increase in the number of organizations that have either transformed or are on the right path.
However, for every successful digital transformation (DX), there are likely to be decision makers who literally have no clue where to start.
In many ways, DX can be equated to the new year’s resolutions that revolve around fitness; companies know that they must become digitally fitter but being aware doesn’t necessarily mean that they will maintain a membership to the equivalent of a digital gymnasium. And while DX initiatives have been hugely influenced by customer demands and expectations, setting yourself up for long-term success is not always as easy as it would seem.
An IDC report from 2020, cited by ZDNet, predicted that direct DX investment will total almost $7 trillion from then until 2023. With the global healthcare crisis about to enter its third year, it is tempting to think that the analyst was lowballing its figures.
Much like fitness, a successful DX implementation isn’t just a one-off project. For most companies, it’s a required way of operating that forces decision makers to go beyond adopting an integrating next-generation technologies or solutions.
To further complicate matters, there’s no single best path for achieving digital transformation. There is, however, a general approach that our teams of digital engineers have found to work well.
Successful DX Starts Here
With that in mind, let’s take an overview of not only the basics of launching a DX effort but also the path to digital maturity. And while not every digital transformation is the same, here are five steps that should be the basis for any successful effort.
The concept of digital transformation can be misleading. A company may have an idea of where it is on the journey, but it’s rarely as simple as being able to pinpoint exactly where you are on the path. For starters, you need to know what is working digitally and, crucially, what isn’t.
In the context of DX, getting a good read of your baseline is essential. You will want to identify current processes, the technology you rely on, what skills you have on your team, how your company is organized, and (broadly) what you do.
Without a clear, explicit measure of your current state, you’ll have no way of knowing how to get where you want to be – or, indeed, whether you’re already there. And while this might seem to be glaringly obvious, the simple truth is that effective DX is often a work-in-progress that is subject to constant changes and disparate business language.
A recent article in the Harvard Business Review referred to this as “technical debt,” with the authors noting that the companies who look for quick fixes as opposed to long-term investment are the ones most likely to integrate imperfect solutions. At the very least, the root cause of what is going wrong will be hidden from view and, for business leaders, hard to identify.
Before you start any digital journey, you need to ask some pertinent questions. In fact, once the decision is made, there is an almost immediate need to think about what the end result should look like.
For example, how do you want to change from your current state? And, importantly, what kind of organization do you want to be?
The answers here can be both broad and specific. And it is important to remember that the focus is not only on transformation but also the maturity level that you are looking to achieve
Let’s look at a real-life use case. A PropTech firm that we are currently working with has an overarching goal of reducing the time it takes to buy a property in the UK (which is currently about three months, if all the pieces of the puzzle fit into place at the right time).
One of the ways that this company is hoping to move the needle is by changing the way it provides property reports. In today’s UK homebuying market, those reports are static. Simply put, adding or changing information takes a lot of time and effort.
Decision makers at this organization would like to have a system that allows for quicker changes and updates to reports, and ultimately integrates them with the data itself. This would mean customers could explore the details of the region where they are considering buying property rather than simply understanding the details of a single plot.
That seem like an easily achievable goal – especially in our connected and data-rich society – but the way these property reports are produced for the perspective buyer have barely changed in the last decade. Understanding that the industry itself might need to transform is only part of the problem, with the solution likely to be tied to numerous moving parts.
Once you have identified your starting point and established a desired destination, launching a digital transformation is a matter of mapping the journey. But that’s much easier said than done.
For starters, you need to choose the right first stepping stone.
Think of this stage as being akin to the porridge-based dilemma faced by Goldilocks. The first step can’t be so easy to achieve that you get there too quickly, without actually making substantive change – do that, and you’ll lose buy-in from your team. They will experience major disruptions to their work but no meaningful change in the outcomes they contribute to, which will make them less eager to do the necessary work going forward.
Conversely, it cannot be too hard. If the first part of the required transformation takes too long to reach, your team will not only stop believing change is coming but also lose motivation to adapt and adjust in what will be challenging ways.
The just-right first milestone will exceed the value of change. When you get there, the impact will be greater than the effort you invested. In fact, identifying the right first step is one place where an experienced consultant can add significant value.
Identifying milestones for the rest of the journey is a matter of working backwards – it’s like reverse engineering, but with a digital angle. And there is never a single path forward, so part of this process involves evaluating the merits of one path versus another.
In our ongoing engagement with the PropTech firm, for instance, we presented the decision makers with two possible ways forward: A first, then B; or B first, then A.
The former would mean doing a lot of foundational work without seeing any immediate results but would set them up for smoother scaling and growth. The latter would let them enjoy more immediate benefits to the business unit and customer, albeit that this would require digging into the foundational pieces afterward.
Choosing the right path is a complex decision best made with input from as many stakeholders as possible. In our experience, this should include guidance from someone who has led similar efforts in the past.
While there’s no single right way to engage in digital transformation, there are things it is generally best to avoid. When digital transformation goes wrong, you can be fairly confident that it was caused by one of these:
What many of those pain points boil down to is not having a plan.
Often, organizations do not know what to plan for because they have never undertaken a major digital transformation effort before. This, again, is where having an experienced partner comes in handy.
But it’s worth noting that your partner should be willing to fill in gaps for your organization.
In a typical client / supplier relationship, the client sets rules and the supplier adheres to them. When a digital transformation is required, clients are often at a loss for what rules should be in place. In our opinion, a supplier who is not willing to offer solutions is not a transformational partner and can offer only limited value to the business.
Right Start will Build Momentum
At the start of this blog post, we compared digital transformation to fitness. And while the two might not seem – on the surface at least – to be similar, the simple truth is that in the same way that maintaining a level of fitness is a never-ending process, the process of digital transformation will likely never be finished.
In fact, given the current rate at which our world changes and evolves, any organization that aims to achieve a “final” state will find itself struggling to stay relevant before long.
The key point to remember is that digital transformation is unavoidable and the companies that are dithering over when and where to begin the required journey are already being left behind by their more proactive competitors. Some of this increased adoption can be traced back to the impact of the pandemic, but that black swan event was arguably exactly what decision makers needed to identify the holes in their existing business optimization strategies.
To cut a long story short, finding a sustainable path and cadence for pursuing digital transformation efforts on an ongoing basis is crucial to long-term success. Identifying the best place to start and keeping the momentum going are critical steps on the road to achieving that sustainability, the companies that understand the need to do it right will be the ones that can look forward to a digital future.
Aa digital first becomes digital only, getting the process of transformation right first time becomes ever more important. Apexon’s teams of digital engineers are well versed in the challenges that companies have and have been able to solve some of the toughest pain points that our clients present.
To find out how we have helped our customers with their digital transformation and maturity, please contact us using the form below.