The world is seeing major global shifts to what it means to safely and productively conduct business. As a result, it’s more important than ever to reduce operational costs, maximise revenue growth, and increase efficiency in streamlined and effective ways. Increasing revenue, improving efficiency, reducing cost—these are all accomplished by implementing innovative technology that’s purpose-built to solve the challenges holding your organisation back.
What is a Digital transformation Strategy?
A digital transformation strategy is a detailed plan for using digital solutions to improve the physical aspects of your business across engineering, manufacturing and service. Digital transformation (DX) is, in and of itself, a broad business strategy. Developing a roadmap for short and long-term digital transformation, guided by business outcomes, not technology, is the essential foundation.
Companies of all sizes are seeing enviable business outcomes from digital transformation efforts, such as improving efficiency, maximising revenue growth, and reducing operational costs. Recent surveys found that although many companies are pursuing digital transformation, many lack a clear transformation strategy which ultimately becomes a barrier to achieving the business’ full digital potential.
WHY IS CREATING A DIGITAL TRANSFORMATION STRATEGY IMPORTANT?
Creating a digital transformation strategy is important because it ensures that there is an impactful, measurable and converted effort toward key business goals. Your team at can engage in digital transformation initiatives, but it’s not going to move the needle for unless it is a coordinated and strategic initiative. With the above in mind, the information below provides key steps and best practices to developing a successful DX strategy and serves as a guide as you build your digital transformation strategy for from the ground up.
How to build a digital transformation strategy - 7 Key Steps
1. Align on the why of digital transformation
Part of the problem with the term “digital transformation” is it means many things to many people. Often leaders believe that digital transformation leads with technology and the why behind the implementation is only discussed afterwards. This is a backwards approach – and one which has failed many times. To set digital transformation up for success, it’s essential to start with identifying your business needs and goals and building a strategy from there.
A great place to start is with your organisations strategic goals – your 5-10 year plan for the future. This starts the discussion about digital transformation from a much different – and more effective – position than starting with the technology. In order to execute on digital transformation, there needs to be a compelling business case and clear business value identified.
This also begins the conversation at the C-suite level: something that’s an important step to the cultural shift that goes hand-in-hand with successful digital transformation.
Bottom line: Digital transformation isn’t a one-off project or initiative. It’s something that strategically positions for the future. Create a foundation for digital transformation out of business priorities and defined business value.
2. Prepare for cultural change
As we mentioned above, C-suite support and enthusiasm for digital transformation is critical to the cultural change that must happen within over time. Over the last couple of years, digital transformation has shifted to almost exclusively being overseen by C-suite: CEO, CIO, CTO, etc. are all part of DX strategy and budget ownership.
“It’s not technology at the heart of digital transformation, it’s humans”.
It’s natural for there to be resistance to change and scepticism of the “new” so be prepared to address that push-back. Thinking beyond C-suite, developing a team mindset with representatives across the value chain – from IT, OT, sales, marketing, design and more – serves as the start of a strong governance that will execute on the digital transformation strategy. Having a core team of “cheerleaders” that understands the vision behind digital transformation will pay dividends in the long term.
Keep in mind that any transformation will have challenges along the way. Leaders need to nurture a culture where everyone learns from the mistakes and builds on the successes.
Bottom line: As digital transformation initiatives roll out, it will affect the work employees do daily. Identifying projects that truly improve the efficiency, effectiveness or productivity of workers (at any level) is a critical piece to digital transformation.Â
3. Start small, but strategic
Digital transformation is a journey, not an event, and identifying the first “proof of concept” project is crucial. It’s what will set the state for future initiatives – and help get buy-in from leaders and teams.
“It’s called transformation for a reason: it takes time, you’re not going to change everything tomorrow.”
There are two key characteristics to the right project – quantifiable and accelerated time-to-value.
Why? Proving ROI in a short time frame gives the digital transformation momentum. There may be a project that could have a sizeable ROI, but could take a year or so to implement. The best starting initiatives are “quick wins” that can be up and running – and show measurable results within six months or less.
Bottom line: The first digital transformation initiative is critical to proving value and ensuring the long-term success of your strategy. Take the proper steps and time to identify an impactful way to jump start your DX efforts.
4. Map out technology implementation
Leeder has a formula for unsuccessful technology-driven digital transformations:
New Technology + Old Operations = Expensive Old Operations
“If you don’t change the processes and cultures of a company, the employees are just enabled by expensive new things.”
That’s the reason why we’re already in the fourth tenet and are just now delving into the technology side of digital transformation. Just to drive the point home, successful digital transformation does not start with technology – it starts with business strategy.
 With the foundation established in the first three steps, technology becomes a necessary tool, or lever, to help you reach your desired and defined business outcomes for .
“You need to build a vision – a big, fantastic vision to build the business case for digital transformation.”
A common set of DX technologies fundamental to achieving digital transformation includes, amongst other:
- Mobile
- IoT
- Digital Twin
- Robotics
- Cloud
- Artificial Intelligence & Machine Learning
- Augmented Reality
- Additive Manufacturing
One of more of these technologies may be necessary to achieve your initial DX use cases. Some of them may already be in use within , but there are missing pieces preventing real business value from being realised.
With most technology pursuits, outside vendors are necessary (read more about the downside of DIY approach) and should be chosen with a long-term strategy in mind. Finding partners with the right combination of product and expertise often accelerates time-to-value.
Bottom line: Developing a clear roadmap with technology for initial and future initiatives is an essential building block to digital transformation success.
5. Seek out partners with expertise
When examining options for technology and partners, bear in mind the future vision. Key questions to ask:
- Will the technology and vendor support scaling?
- Does the vendor and team share a similar vision for digital transformation?
- Will they be able to support you in your long-term strategy?
- How does it integrate with your existing technology?
- Do they have the right technology and expertise for your specific use case and industry?
- What results have they achieved with similar use cases / applications and with similar companies?
“You have the most perfect technology but not the right partner to implement it. If the people helping you don’t have the experience, knowledge and background in your application, there will be struggles. Those with expertise have learned from previous clients all the things not to do – and that’s very valuable as you execute on your digital transformation strategy.”
Another aspect to this step is avoiding “spot solutions” – in other words, a technology that solves one department’s pain point but is not the right technology or solution to scale across . Having CXO’s involved in DX technology decision-making helps ensure the company-wide strategic vision is not lost.  Look for partners that compliment, augment, and enable your digital transformation vision.
Bottom line: Look to strengthen your core competencies by seeking partners who complement your strengths and understand your business. Finding partners that will accelerate results and drive initiatives forward is critical to achieving digital transformation outcomes.
6. Gather feedback and refine as needed
At this point, we have a vision and a broad-based coalition that supports it, a strategic use case, a technology roadmap, and partners in digital transformation success. Before moving ahead full-throttle, clearly define key performance indicators (KPIs) for each project. Make sure all parties are aware and accountable to what needs to be delivered to call the project a success.
at the same time, create a strong feedback loop with stakeholders to ensure everyone is learning from the experience as the digital transformation strategy unfolds. Understanding that digital transformation is a journey, setting “waypoints” is a means to check in with the progress, adjust and improve.
“New objectives may come along – and that’s OK. Technologies should be flexible and agile enough to respond. With digital transformation, you’re never locked into a physical box.”
Bottom line: One of the hallmarks of an organisation undergoing digital transformation is agility. Putting in place a strategic roadmap is essential but being willing and capable to adjust according to results is the ultimate path to success.
7. Scale and transform
By now, will begin to see results from the initial use cases outlined in the digital transformation strategy. Leverage the success to gain momentum and generate collaboration around the next steps, as well as long-term strategy.
As digital transformation progresses, new ways for digital to transform physical emerge. Consider opportunities to scale horizontally – by applying similar strategies to multiple locations – and vertically by connecting additional technologies.
Bottom line: Transformation looks different to every organisation, that’s what makes the digital transformation strategy so important. It’s a personalised roadmap or where change is most effective for your organisation.
Final Thoughts
One of the misconceptions about digital transformation is it’s a destination – once we do ‘x’ or achieve ‘y’ we’ll be done with it and move on to something else. As industry and business evolve, digital transformation – converging the physical and the digital – will continue to be a critical part of business strategy in order to remain competitive, differentiate products and services, and drive efficiency.