As new technologies emerge and disrupt the marketplace, businesses face one critical choice: adapt or fall behind. A digital transformation strategy is the only way to maintain a competitive advantage. This approach improves your business operations, customer satisfaction, and bottom line.
But how do you determine the proper strategy implementation to integrate new technology? Learn how to implement digital transformation in the steps below.
What is a Digital Transformation Strategy?
First, we define a digital transformation strategy as a plan outlining how a company currently uses technology in its operations and how to adapt to new technologies as they arise. It is an innovation plan that plugs into the overall organizational strategy to drive a business forward.
Digital transformations often involve integrating artificial technology, cloud computing, and data analytics into business operations. However, numerous other technological applications, like 3D printing, blockchain, and virtual reality, require strategic implementation.
Digital Transformation in 5 Steps
Use the guidelines below to inform your digital transformation strategy framework.
Step 1: Set Clear Goals and Objectives
What are the business goals you want to achieve? These may include:
- Increasing revenue
- Decreasing operational costs
- Adapting an agile business philosophy
- Eliminating information silos
- Increasing productivity, etc.
Outline your business objectives, identify knowledge gaps, and understand your market position. This way, you’ll keep your strategic priorities at the core of digital transformation.
Step 2: Evaluate the Current State of Your Business
Understand where your business stands in the current digital environment. A SWOT analysis is an excellent tool for this task. Find out what comprises your present technology infrastructure and its capabilities.
Identify which team members use your technology for which processes and which skill gaps need addressing. Use this information to compare your business with competitors to see how they’re performing with their technology.
Step 3: Develop a Digital Transformation Roadmap
A digital transformation strategy follows project management principles, requiring a clear, linear roadmap to guide the process. Think of it as a journey from X, your current digital tools, to Y, new, innovative technologies. Ensure your roadmap includes the people, processes, technology, and milestones at every step.
Step 4: Build a Team
You’ll need digital transformation experts to work with your team to implement the strategy. Most organizations appoint a digital transformation officer to lead the process, but you can outsource the project entirely. Either way, choose creative, adaptable individuals to lead and guide the digital transformation strategy. The top three digital transformation team members should be:
- C-level management: Business leaders determine the digital transformation budget and objectives and demonstrate a digital-first attitude to encourage the adoption of change.
- Change-specific leaders: Appoint a suitable candidate to lead the digital transformation strategy within each business department.
- Customer-facing leaders: Assign individuals to evaluate your customers’ needs and gather feedback about the new technologies.
Step 5: Identify Your Success Metrics
Which milestones indicate progress for your strategy implementation, and how will you measure them? How will you continuously track and assess the transformation after the implementation phase? An OKR strategy is the ideal methodology for digital transformation success. It breaks down your digitization project into objectives and key results, each with quantifiable metrics that every team member can understand. Adjust your strategic priorities based on your OKRs to improve your outcomes.
Why a Digital Transformation Strategy Matters
Digital transformation requires more than buying new software and training your staff to use it. You need a good strategy incorporating leadership, organizational culture, and change management to implement new technologies successfully. A strategy also enables you to anticipate technological changes in your industry and minimize the impact of disruption.
In addition, a digital transformation strategy enables your company to improve customer experience, streamline operations, and attract the best talent to your team. With a plan, your company can catch up with the competition and avoid losing valuable resources.
Finally, a digital transformation strategy helps you to scale your company efficiently. You can use technology to streamline your operations as a small business and increase your talent, outlets, products, and processes as you grow to an enterprise level.
Examples Across Industries
Let’s look at a digital transformation example from various industries to illustrate this process.
1. Marketing Technology
Every industry’s marketing department increasingly relies on digital technology for its operations. Everything from lead management to online content writing has dedicated software that marketers must learn and integrate. Artificial intelligence (AI) tools also support marketing functions in managing customer feedback, automating digital marketing strategies, and increasing accountability across the organization. As your business grows, prepare to implement a digital transformation strategy for your marketing team.
2. Finance
Mobile banking and loan apps have taken over consumer finance, but this is only one of the numerous digital transformations affecting this industry. AI-driven technologies automate invoices, payrolls, and virtual cards and wallets. Blockchain technology and the metaverse now enable customers to purchase virtual real estate.
3. Logistics
As vehicle manufacturers become more aware of their carbon footprint, new technologies help to develop more efficient vehicles that are less dependent on oil to transport goods. Engineers and designers need cutting-edge technology to create carbon-neutral trucks, autonomous fleets, and hybrid engines. These vehicles incorporate technology interfaces and features drivers must learn for safety and efficiency.
4. E-commerce
Retail businesses are transforming digitally to enable new, innovative customer experiences. A few years ago, designing a shopping app was enough to keep retailers competitive. Today, however, businesses must integrate gamified delivery services, voice ordering, and virtual reality features to improve customer experience.
5. Manufacturing
The manufacturing industry has endless opportunities to innovate and embrace new technology. Some examples include using data analysis tools to create efficient workflows and streamline supply chains, adapting 3D printing to cut costs, and using creative visualization tools for prototype design. These manufacturing technologies apply to numerous verticals, including auto and aerospace, healthcare, and luxury products.
Conclusion
A digital transformation strategy is challenging to develop and implement but worth the effort to keep your business competitive. Adding new technology to your organizational strategy enables your company to remain agile in your industry. You can achieve tremendous business growth in an ever-changing technological landscape. This is the only way to ensure organizational resilience and shareholder confidence.
Nisha Joseph, is the Content Manager for Profit.co. In her current role, she leads the content marketing team with experience in various fields, such as science, education, law, and management. She is a well-rounded individual with diverse interests and skills. LinkedIn and Twitter.
Digital stock image by 13_Phunkod/Shutterstock
