7 key factors of successful digital transformation in the enterprise

It’s easy to find people who are interested in talking about digital transformation (DX). It’s hard to find people who have experience and knowledge in doing it from the bottom up.  Kevin McGuire (@potentiam_km) is one of those hard to find people.  He built a DX team within a Fortune 100 financial services company from a team of 10, to a team of 70. 

I asked Mr. McGuire what it takes to make DX-type initiatives succeed within large existing organizations.  He gave me the following suggestions.

1.  When a company begins their transformational journey, they must first define the “Business Why” behind the reason for their DX initiatives

In other words, what is the business goal that they wish to achieve.  This process should be driven from the outside in.  Companies need to start from a customer driven perspective to best align their transformation efforts with their customers current and continually evolving needs. For example, do they need to:

• Enter or create new markets
• Enhance the customer service and/or customer facing experience
• Provide new product offerings
• Enhance organizational efficiency
• Protect themselves for competitive companies
• Increased speed of delivery

The reason the “Why” is important is because it allows the DX and the company to visualize future success and enables them to concentrate their efforts and resources in a single cohesive direction.  Measures of success aligned to the “Business Why” must also be defined.  This positions the team to start selling the DX concept within the organization with the intent of removing roadblocks and gaining support.  This internal selling plan has three steps.

1. Clearly define the “Business Why,” as already discussed
2. Define your overall DX strategy and how it can be best marketed internally
3. Clearly and transparently promote your DX initiative to all internal stakeholders with the specific objective of gaining their acceptance and support.

2. You must create a dedicated DX team

The reason a dedicated DX team is required is because the people performing other operational roles, in additional to their DX participation, won’t have the bandwidth to properly commit themselves to the time and mental rigger that DX implementation requires.  This team must also have the correct mix of people, including those who understand:

• The company’s business, industry, and competitive landscape
• Internal company business processes and technical operations
• Cross-industry skills with experience related to the “Business Why”
• Experience implementing the needed types of processes, technology and business changes required to assure DX success

It’s possible that some or all of the people with these skills may be found within the company.  But if not, these people must be brought in from external sources to assure that you have the right skills, knowledge and mix of people in place.

3. Senior management in all effected organizational areas must understand and be supportive of the DX activities

They must be willing to drive this support, through communication, training, hiring, reorganization adjustments, compensation incentives, cultural adjustment and other needed factors down through their organizations.  Without it, your DX initiative will die on the vine.

4.  Your DX initiative should have dedicated strategic funding, not simply a carve-out from your existing operational budget

This is required because DX is a long-term investment, not a short-term operational expense.   Additionally, having separate funding illustrates to those working on DX, and the company at large, the value and importance of DX to senior management.

5. Organizations must balance their traditional operational models with the introduction of new DX driven models and culture

DX implementations are most often revolutionary and can cause conflicts related to existing operational processes and systems.  As a result, the blueprint of how new DX processes and technologies, both procedurally and technically, will interface with the traditional operating model must be defined up front and acknowledged across the organization.  If this is not done, then it will be difficult or impossible to integrate your DX initiatives into your existing and ongoing operations.

6.  You must assure that there is proper oversight from the beginning of your DX initiates from an enterprise risk, cyber security, testing and internal audit perspective

To assure that this is in place, use a “shift left” mentality.  Namely, get these needed business functions involved before you need them.  This early involvement helps assure easier passage through these potential organizational hurdles as you move toward implementation.

7. Consistently monitor and measure success

The metrics for success related to the “Business Why” that was defined at the beginning of the journey, must be tracked and communicated across the organization.  This will ensure that you stay focused, learn and adapt as challenges arise, and validate the approach you are taking.

In closing, the technology you are using to implement DX is only one of the many factors needed for DX success.  Remember that DX at its core is a change in the business first and the movement toward new technologies second.  As a result, these seven key organizational factors are key to your DX success.