The concept of digital transformation is not a new one, as technology has been used to augment business functions since the dawn of the computer age. However, these days, digital transformation means different things to different companies, requiring each company to tailor their integration of technology in a way that increases productivity and improves communication with internal and external parties.
Personally, I like the Altimeter Group’s definition of digital transformation, since it is the most appropriate for modern market-focused usage: “The realignment of, or new investment in, technology and business models to more effectively engage digital customers at every touch-point in the customer experience lifecycle.” In most cases, the goals of digital transformation include better engagement with digital customers, greater collaboration with internal resources, and improved efficiency.
It is interesting to note that Altimeter’s report indicated that 88 percent of the executives and digital strategists surveyed answered in the affirmative when asked if their company was undergoing digital transformation in 2014. However, only 25 percent completely mapped out the customer journey in the last year and had a clear understanding of new digital touch-points (whether Big Data, social media, mobile computing, or other). This gap leads me to believe that many companies will be disappointed with the results of their digital transformation, since it is hard to get where you are going without a good map.
With that in mind, before you rush headlong into digital transformation, I recommend that you sit down and set yourself up for success by planning each decision carefully and brainstorming with department heads for a common solution that improves all company processes. The advantages of digital transformation are huge, but only if you have a clear vision for the future state of your business and a strategy to get there.
Digital Transformation Starts at the Top
I’ve seen many companies jump into digital transformation because the chief executive officer (CEO) says that it is a priority, yet they miss out on the full benefits because there is no further executive engagement.
When it comes to transformation (digital or otherwise), initial and ongoing executive sponsorship is essential. Without this support and oversight, department heads are unlikely to take the lead in any digital transformation project, nor will they typically deal with budgetary constraints for what is essentially an unsanctioned project.
Therefore, executives at the highest level need to take the lead and issue clear instructions to department heads, i.e., “This need to happen sooner rather than later.” Roles and responsibilities should be clearly defined from the beginning, and a project plan set up to keep everyone on track. A reference architecture with responsibility maps and representation from each business unit is also critical.
Each department should be encouraged to build a project team to brainstorm on the benefits of digital transformation. The team leaders can then pass on progress reports and insights to a senior-level executive team. Incidentally, this is the ideal time to improve existing processes, since digitally transforming flawed processes is a wasted exercise.
The CMO Should Drive Digital Transformation Requirements
Executive sponsorship is also key to eliminating perceived territorial or budgetary disputes between departments. Some companies believe the chief information officer (CIO) should control the entire digital transformation process. In my opinion, since the core objectives include better engagement with digital customers (which in turn translates to higher revenue and increased profits,) it is the chief marketing officer (CMO) who should define the requirements. In fact, as indicated by the Altimeter Group report, the top four digital transformation initiatives are related to increasing the efficiency/effectiveness of businesses digital platforms, website mobile site/applications, social media, and customer-facing technology systems. All of these are tied to marketing in some way.
Even though the CMO may not know the technical complexities involved, he or she can identify shortcomings in existing processes and request IT solutions to fix them. In this way, IT comes up with a solution that works for the business, and indicates how much it will cost. Since the task involved is a marketing function, the chargeback should fall on the marketing budget.
As increasing productivity is the goal, it is in everyone’s best interest to achieve this objective by any means necessary. In some cases, it is likely that IT outsourcing will be required, as Big Data and cloud expertise are not always available in-house. Of course, once IT has completed their tasks, it falls on Marketing to leverage the investment properly.
What Type Of Digital Transformation Do You Need?
Digital transformation is part of a larger business transformation program and each company will implement it according to their own requirements, which could include some or all of the following:
- Big data and its use
- Data security
- Data privacy legislative and compliance issues
- BYOD and e-discovery
- Social Media
- Mobile Computing
- Cloud Features for sales, support or internal use
Companies need to recognize that digital transformation is a paradigm shift that spans all levels of the business. All departments are included to maximize success and allow for a smooth transition in your digital processes.
Preparation is the key to success in any transformative initiative. Throughout the process, always keep your customers in mind. After all, you are taking the journey together. This way, everyone can enjoy the ride.
This article was first published on Forbes.com.