The Key to Digital Transformation Success: Prioritizing Strategy Over Technology

Fifty-seven percent of organizations say keeping up with technological advances is their most significant challenge. And with Bloomberg estimating market revenue for generative AI to grow from $40 billion last year to $1.3 trillion by 2032, it’s vital — now more than ever — to approach digital initiatives with careful consideration.

Still, technology innovation is imperative for organizations that want to stay relevant, remain competitive, and increase profitability.

It’s crucial to avoid prioritizing quick fixes over long-term solutions, as this may lead to investing in the wrong technology or solving problems that don’t exist. This reactionary approach to transformation creates a technical debt, which can leave you with insufficient funds to address issues in the future.

Many organizations are starting to face the consequences of jumping into digital initiatives without a clear plan in place.

A true transformation involves focusing on three key areas — people, processes, and technology. Once your processes and people are aligned with your objectives, technology can be introduced as one of many means to achieve your goals.

People

Your employees are the backbone of your organization, and they will be the ones using your technology and driving your processes forward. As such, it's important to consider their needs and capabilities as you build your digital future. Additionally, you must think broader than your own organization and consider how any changes may affect your customers and vendors.

Change Management

Change management is more than a communication plan; it is a framework for preparing, supporting, and equipping individuals in organizations experiencing change. The process of change management provides the following advantages:

It lays out clear goals, helping organizations track progress and measure results.

It makes employees aware of each facet of the change, allowing them to navigate it more efficiently and effectively.

It makes successful innovation possible, clearly demonstrating to organizations the return on investment (ROI) of their efforts.

It’s a process that can be recreated and easily applied in other capacities within an organization.

It’s critical to help employees get on board with any changes you plan to make to ensure acceptance and usage. You must help your team members understand why the change is important, how it helps them improve their processes, and how they can maximize innovation. Otherwise, you might implement an advanced technology your team doesn’t adopt.

Organizational culture is a team effort and buy-in from leadership is just as important as that from employees.

A transformation won’t be successful without leadership support from the executive level. Managers can have insights and a drive to pursue transformation, but if leadership doesn’t support their efforts and work with them through change management, communications with customers and vendors, and expectation setting, the project could easily fail.

Additionally, if leadership keeps themselves out of the loop rather than championing the effort, employees are left to push the initiative out to customers, vendors, and coworkers. This approach tends to have a weaker influence on change. Leaders can be vocal advocates for the initiative via email, in meetings, and otherwise, leveraging their strong influence on change.

Customer Impact

How your transformation can and will impact your customers is a critical consideration. It should guide how you adjust your processes and which technologies you implement. The transformation should address customer needs and how they prefer to interact with your business. Ask yourself these questions:

How will you communicate these changes to your customer base?
Do you need to make drastic changes to meet shifting customer needs, such as a turn toward mobile and digital communication channels?

Vendor Considerations

It is also important to consider how your digital strategy will impact your vendors or suppliers. To ensure positive interactions with these parties throughout the digital transformation process, consider the following:

What changes will make the most positive impact on vendors or partners?
Do these partners or vendors have an action or role in the transformation process?
Have you considered what training or tutorials are needed to share the changes?

Processes

Evaluating your processes for inefficiencies and looking for opportunities to streamline workflows, automate manual tasks, and improve collaboration will help guide your technology selection process. Conducting a business assessment and having clear goals are a vital part of creating a digital strategy.

Business Assessment

To understand your organization’s optimal state, analyze and document the capabilities of your team members, business structure, and existing technology stack.

Analyze your organization’s strengths and weaknesses.

Evaluate team members’ skill sets and capabilities as they pertain to their roles. Is their department under- or overstaffed? Do staff have the necessary expertise? What is their willingness to change?

Assess employees’ processes and the technology they use. What tasks must they perform manually? How efficient are these processes and systems?

Determine the capabilities of the technology systems used today. What is missing to support your business objectives?

Once you have completed your assessments, collaborate with your leadership team to identify inefficiencies, gaps, threats, and opportunities before moving on to goal setting and strategizing.

Goal Setting

Defining clear objectives and mapping out a strategy to achieve them are keys to success. Develop a vision and strategy using the assessments you’ve performed, considering opportunities such as:

Restructuring, retraining, or reallocating resources to address inefficiencies.
Improving processes to reduce waste.
Improving the customer experience by introducing a more seamless technology.

To be sure you don’t interrupt a process that does work as it is, ask yourself the following questions for each potential component of the transformation:

Is there a business need for the way it’s done today?
What is the business value or customer value of doing it this way?

If there’s no need or value for the existing process, it’s a candidate for change.

Implementing Your Strategy

Building a digital future is an ongoing process that requires constant evaluation and adaptation. By taking a holistic approach that considers your people, processes, and technology, you can create a more agile and responsive business that is well-prepared for the challenges and opportunities of the digital age.