Digital transformation is the process of digitising all areas of an organisation, delivering efficiencies and improved customer service. Digital transformation projects are long-term efforts in which the organisation continually adapts its systems. This is driven by ever-changing technology and evolving customer needs.
According to McKinsey, 70% of digital transformation projects fail. The main reasons include lack of investment and lack of engagement within the organisation. Furthermore, those respondents reporting success in their digital transformation efforts estimate that they have achieved just 67% of the potential financial benefits.
Given the difficulties surrounding digital transformation, we have created a process that is proven to make transformations successful. Following this process step-by-step will boost the chance of success in your own digital transformation endeavours.
Digital transformation process Stage 1: Discover
Laying the foundations of a digital transformation is the most important stage. It has a number of components:
- KPIs. Objective setting is the process of defining the organisation’s digital transformation goals. Objectives are required for each stage of the implementation, plus the end result. The chosen KPIs may well be different to the organisation’s traditional objectives, and it is likely that data will need to be migrated out of silos to monitor the transformation process. Check out our article on digital transformation strategy for examples of KPIs.
- Data. Data availability is not only important in setting objectives, but also in making best use of the organisation’s transformation investment. The initial Discover phase maps the data across the organisation to identify gaps, poor data quality and lack of data analysis. This exercise is necessary to ensure that accurate, readily-available data is woven throughout the organisation as an output of the digital transformation. The plan should be for a data architecture that provides easily accessible data for everyone across the organisation who needs it.
- Technology. Digital transformation is an on-going process that requires an agile approach to technology. When so many tools are available, it is important to use the Discover phase to identify technologies that are flexible, with an open architecture, that can be used to future-proof systems and create a user-centric design. This stage of the process ensures that the technologies adopted during the transformation continue to deliver in the long term.
- Skills. A skills audit is an important part of the Discover phase. It determines gaps in technical understanding, domain knowledge, change management and project management. The human side of digital transformation can sometimes be overlooked, particularly when implementing the transformation, and it is vital to ensure that the organisation has the right skills in place to carry out the implementation itself.
Digital transformation process Stage 2: Deliver
Deployment of the digital transformation is an agile process. Given the long-term nature of most digital transformations, our projects start with the organisation’s initial requirements and we firstly deliver a minimum viable product, which is then built upon in an iterative process. A strong start can be made by focusing on particular domains, such as the journey of a specific customer group, or a particular business function, that will deliver significant value to the business.
We find that fortnightly sprints, with the system demonstrated at the end of each sprint, are the best way to maintain agility and buy-in. It’s important to ensure that the project KPIs created during the Discover phase are followed here. Continuous prototyping, feedback and development ensures that stakeholders can help refine the design early on in the project.
We recommend an out-of-the-box approach where possible, using an established software stack (in our case, Microsoft). This minimises risk, streamlines delivery time and ensures that new systems can be easily updated in the future. But some degree of customisation is likely to be necessary, so it is important to choose technologies that enable your team to adapt the technology where needed.
As mentioned earlier, the human component of digital transformation is critical. Mechanisms for employees to voice their needs, perceptions of risks and concerns will improve buy-in and also reduce risk. Implementation is likely to be faster and smoother if the organisation’s employees are on board with the process and deliverables.
Digital transformation process Stage 3: Evolve
At the start of this article, we said that digital transformation is an ongoing process. This is where the Evolve phase steps in. Once the requirements scoped in the Discover stage have been delivered, the organisation needs to be prepared for constant evolution. Following the initial implementation, financial and staff resources are likely to be required for further initiatives. These can include integrating new systems, adding new features and automating more processes. In just one example, we are often asked to add web portals to systems to meet changing customer requirements.
Again, KPIs are important here. Measures can include employee engagement, use of the new technologies and the value created by each initiative.
A successful digital transformation will foster a culture of learning. This is ideal because there is likely to be an on-going training need as systems evolve. We therefore often assist with longer-term training, coaching, and upskilling. This is particularly important with the introduction of new technologies, such as artificial intelligence.
In summary
Due to the complexity of digital transformation, these three stages are not always linear. Instead, our Design-Deliver-Evolve process uses an iterative approach to build successful digital transformations that can evolve as required in the future. This incremental process delivers business value and minimises risk.
Right now, we’re working with organisations in multiple sectors on their digital transformation projects. Find out how we can help you.
