A digital transformation is not a one-off project, but instead is a continual process of digitisation. It brings huge benefits in revenue, efficiency and competitiveness. However, recent research indicates that implementing digital transformation is creating significant challenges for organisations. Currently, “88% of IT decision makers are facing costly project delays” with the cost of those delays totalling millions for some organisations.
This risk can be mitigated. We find in our work on digital transformation projects that organisations which incorporate certain key components into a project can maximise their chance of success.
Here’s our run-down of the strategic elements that we’ve seen bring success.
1. Accurate data and analytics
Accurate data is woven throughout a successful digital transformation project. Every digital interaction made by an organisation generates data, and this information often highlights ways to generate growth and improve efficiency. Data also enables an organisation to monitor – and then fine tune – the digital transformation project itself.
An organisation can face multiple issues with its data, including information siloed across different systems or business units, poor data quality and lack of joined-up customer data. A successful digital transformation will capture and harness the data generated by an organisation and its external ecosystem. Where data is currently locked into different systems or is insufficiently analysed, the data analytics component of a transformation will integrate and convert the data into actionable insights, informing decision-making and generating appropriate actions.
A successful digital transformation is likely to include a range of data management components:
- A defined data strategy identifying the tools, processes and skills required to integrate and analyse the organisation’s data successfully
- A data quality plan to ensure that the data is accurate
- A solid data engineering plan to implement the integration, sharing and analysis of the data
- Analysis of the needs of the data’s users to provide access to meaningful data and, most importantly, insights.
2. An empowered and agile culture
Digital transformation isn’t just about implementing new technology. It often requires a change of culture to put data-driven decision-making at the heart of the organisation. It can mean listening to users and understanding their needs. It often entails an understanding of how to drive adoption of new technology and processes within the organisation.
Planning a digital transformation should start with understanding the requirements of everyone in the ecosystem, including customers and staff. But a culture of transformation can also have a significant impact on the viability and success of the project. Employees need to feel empowered to voice not only their needs but any perceived risks with the transformation project. In particular, it should be straightforward for employees to raise comments or concerns about the project. Staff should also be empowered to make the necessary decisions about their element of the project. If employees feel positive about the changes heading their way, the transformation is likely to be faster and easier to implement, with reduced risk.
This Accenture case study on the demise of Blockbuster illustrates the importance of culture during a time of technological change: The Role of Culture in Digital Transformation.
3. Integrated technology
Our Discovery service helps organisations to scope the technology required for their particular project. This is important because technology powers the overall digital transformation journey. Everything from artificial intelligence to cloud computing is a tool that an organisation can use to increase its efficiency and effectiveness. The key is to understand how a particular technology can contribute to the transformation project. The challenge is the complexity of adapting a new technology to the organisation, particularly when most organisations have legacy systems that can be difficult to change or replace.
An effective use of technology during digital transformation includes:
- A focus on the organisation and its users, with defined digital user journeys and user-centric design
- Systems that are future-proofed to support new functions and upgrades
- A flexible, open architecture connected with easily-accessible APIs
- An agile approach to delivery, keeping up-to-speed with technological developments and changing user needs
- Well-defined testing, development and deployment processes to minimise risk
- Data and analytics pipelines that provide actionable insights to not only the transformation team, but other users within the ecosystem
- Security and privacy protocols built into the core system instead of as add-ons
- Partnership with experienced vendors to develop capabilities that are too resource-intensive to create in-house.
4. Effective skillsets
Digital transformation requires a range of technical and people skills.
Expertise in the systems and software deployed during the transformation is crucial, whether for in-house development or when commissioning services from a partner. There also needs to be an understanding of the organisation’s legacy systems.
Expertise in process improvement is required to identify the processes that need improving and to create new ones; to identify where incremental improvements are enough or when a major redesign is needed.
Expertise in organisational change, including leadership and change management skills. There will be the need to align and refocus the different parts of the organisation, and to convince employees of their new roles, new procedures and new focus on data. It is important to embrace the human side of digital transformation, in addition to the technical.
Our Discover-Deliver-Evolve approach ensures a continuous retention of skills: the team carrying out the initial Discovery phase is part of the Delivery team too, maintaining knowledge throughout the project.
5. Defined results
Our methodology ensures that we deliver the technical elements of a client’s project in fortnightly sprints, enabling continual testing to provide feedback and refine the technology’s design. But in addition, every digital transformation project should include measurement at major milestones, from start to finish. This tracks whether or not the key stages are successful and to identify areas for improvement. For most organisations, it will also be necessary to use key performance indicators (KPIs) to ensure that the transformation is achieving a positive return on investment.
Example KPIs for a digital transformation project include:
Financial KPIs: Often one of the main aims of a digital transformation project is to boost profitability by increasing efficiencies and reducing costs, improving the customer experience and identifying new opportunities. Often these measures become the first analysis of the financial effects of the project. For instance, the project can be evaluated by assessing expenditure on items such as new technology, staff, training, and comparing this with the amount of revenue generated as each phase of the project is completed.
Employee KPIs: Carrying out regular employee satisfaction surveys can identify shifts in productivity and morale. To this can be added statistics on employee retention. In addition, developing the skills of new and existing employees can be a big investment during a transformation project; KPIs can be used to compare expenditure on training and development with employee satisfaction rates and the adoption KPIs listed below.
Adoption KPIs: It is important to measure the extent to which users are engaging with new technology and systems. KPIs can include: percentage adoption rates; the number of active users; the number of users who continue to use the new technology on an on-going basis versus those who revert to previous practices; and the time spent using a particular tool or feature.
Customer KPIs: Given the importance of the customer experience in a digital transformation process, it is essential that the marketing team measures customer activity. Potential KPIs include net promoter scores (how likely someone is to recommend your organisation) and customer satisfaction scores.
Project management KPIs: Finally, the project itself, including its milestones, can be measured using KPIs such as adherence to deadlines and to budgets.
This article from McKinsey provides further examples of digital transformation KPIs: Five metrics for CEOs to measure digital success.
Right now, we’re working with organisations in multiple sectors on their digital transformation projects. Find out how we can help you.
