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How To Prepare Your Organization For Digital Transformation?

Digital technology has impacted every aspect of our lives from elections to the way we interact with friends and family. There’s an area that has been affected by digital technology the fastest – the business world. Q1 2021 hedge fund letters, conferences and more The average enterprise company uses 1,295 saas applications. If this isn’t […]

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This story originally appeared on ValueWalk

Digital technology has impacted every aspect of our lives from elections to the way we interact with friends and family. There’s an area that has been affected by digital technology the fastest – the business world.

geralt / Pixabay via Valuewalk

Q1 2021 hedge fund letters, conferences and more

The average enterprise company uses 1,295 saas applications. If this isn’t an example of digital transformation then what is? The challenge is that digital transformation can be a benefit or a drawback depending on how you approach it.

In this guide, you’ll learn more about digital transformation and how to approach it the right way so your organization benefits.

What Is Digital Transformation?

Digital transformation is the change of culture, processes, business model, or domain of an organization or industry. The changes occur through the adoption of digital technologies or digital technology-enabled processes.

Digital transformation has become even more prevalent since the outbreak of COVID-19. Industries that were vehemently against remote work have now become champions. Not by choice but by necessity.

Technologies that were irrelevant eighteen months prior have become indispensable. Yes, this is an extreme example but even if there wasn’t a global pandemic, it would be happening.

Beyond just using the latest technology and upgrading your systems, digital transformation can be considered part of your organizational culture. You’re willing to do away with legacy infrastructure and standardized processes no matter how ingrained they are in the organization.

The goal is to enable your people to work smarter and more efficiently. It allows you to continue to provide value to your team, your stakeholders, and your customers while staying competitive in the market.

That’s a goal businesses have had since the beginning of time. It is just called digital transformation now.

How To Prepare For Digital Transformation?

There are four key steps in any digital transformation initiative. These can be further subdivided but this guide will focus on a high-level overview so you can get to work on your own preparations.

  1. Evaluate Your Business Model

Not all business models are designed to hold up in a digital-first world. If you’re not proactive about the way you do business, you may realize all too late that you’re a relic of the past.

Companies like Blockbuster once employed tens of thousands of people and earned billions of dollars. In 2010, it declared bankruptcy, and today it’s been reduced to a single store and a handful of employees.

Another example would be GameStop. Despite its stock frenzy at the beginning of 2021, the company has been dwindling for years. It hasn’t been able to keep up with the digital transformation happening in its industry.

It doesn’t matter. Digital transformation will overtake every single industry and slow-moving giants will be consumed if they’re unable to adapt. Whether you’ve started a private LLC with fewer than 20 employees or a larger corporation with hundreds, you’re at risk of being disrupted.

This isn’t to paint a dreary picture, it’s the reality of our world. The first step when preparing for digital transformation is understanding whether or not your business model will be viable in the next 5, 10, or 20 years.

Look around at direct and indirect competitors. Are they moving their services delivery to the cloud in what was once a hyper-local industry? Are there slight variations on your business model that seem insignificant now but may grow to form a larger part of the industry as a whole?

These are the questions that need to be answered when evaluating your business model. If you see any threats, consider launching smaller initiatives to test the waters. Blockbuster may have saved itself if it would have launched a small DVD rental business or a simple streaming service. Don’t be Blockbuster.

  1. Build A Roadmap

As with any initiative, there needs to be a plan of action to get you from point A to point B. It may be even more important with digital transformation because it can feel like you’re making progress when you’re really not.

For example, you may move from a paper-based system to a digital one but are you unlocking efficiencies? Is it saving you money? Are you automating tasks? If the answer is no then what benefit is digitizing the process bringing you?

A roadmap clarifies what you stand to gain from digital transformation and forces you to prioritize one aspect over another based on its impact or importance.

When creating the plan of action, don’t only think about the technology or process itself, consider the dependencies involved. Do you need training, will you have to interact with vendors or customers differently, will it play nicely with other systems you have in place?

Once you’ve figured out what all the moving pieces are, you’ll have a much better timeline for implementation.

  1. Shortlist Technology Tools

After you have a rough outline of your roadmap, it’s a good idea to start looking at digital technologies that’ll meet your needs.

Sometimes, you’ll be making huge shifts like incorporating work process automation or robotic process automation tools. At other times, you may be incorporating tools that are less pronounced but increase your efficiency like project management software.

Sean Kelly Co-founder of BookRetreats says, "We've been a remote company since day one and the best tool that has allowed us to do this is Google Drive. It's free, easy to use, and incredibly easy to share. No matter where our employees are in the world, they can access everything they need to no matter from what device. The best part is that it's free, which was so valuable to us as a self-funded start-up company."

Whatever the case, start by identifying the technology categories you’ll stand to gain the most benefit from. Consider the core tools you’ll use, how they’ll work together, whether they have APIs that allow them to be connected, the amount of training required to get your team to proficiency, etc.

For example, does your project management tool work with your CRM and your work process automation tool? Does your electronic signature creator integrate directly with your CRM?

  1. Execute

When you’re ready, the last step is to execute. Even though the business world is moving quickly, don’t think you have to rush the rollout of your initiatives. It’s sobering to note that 70% of digital transformation initiatives fail to meet stated goals.

According to the study cited above, there are many reasons for these failures. Employee engagement is low, lack of accountability, poor collaboration, a lack of support from management, etc. These are just various symptoms of the same thing – poor execution.

Before you launch your own initiative, no matter how humble or ambitious, get the right buy-in from your employees, management, and stakeholders. It’s not always a question of resources – it’s often a question of willpower.