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Key Digital Transformation Challenges CMOs Must Overcome Set a clear analytical agenda to measure the effectiveness of digital transformation initiatives and guide the future development.

By Nathan Sinnott

Opinions expressed by Entrepreneur contributors are their own.

violetkaipa | Getty Images

What is Digital transformation? Businesses often go through transformation when they have failed to innovate and evolve. When a business evolves with its market, continually refreshing its products, services and proposition, reaching new customers and growing the value of existing ones, it doesn't need to transform as drastically.

Digital transformation encompasses the wholesale changes made to the foundational components of a business from its operating model to its infrastructure.

  • What the business sells, and to whom.
  • The go to market strategy, and the delivery model.

A digital transformation process touches every function of a business from purchasing, finance, human resources, operations, IT and technology, sales and marketing and every other division in the business to help drive evolution, innovation and viability -- with an aim at enabling the business to thrive.

Related: 16-Step Blueprint to Master Your Digital Marketing in 2016

Digital transformation may be thought as the third stage of embracing digital technologies:

  1. Digital competence
  2. Digital literacy
  3. Digital transformation.

From optimizing digital marketing channels to finding ways apps or software will aid business operations, the digital space is where the greatest amount of innovation and evolution is possible.

Increasingly, chief marketing officers (CMOs) are finding themselves on the front lines, leading the charge to implement digital transformation initiatives. But the process often requires out of the box thinking, ruthless strategic prioritization and the ability to craft and communicate a very big vision. Below I've outlined some of the most common obstacles faced when proposing digital transformation, along with suggestions on how to overcome them.

Important but not urgent.

A lack of urgency is the greatest obstacle businesses face when considering the value of digital transformation. Does the business consider this a strategic priority, or a critical aspect of their growth plans? Executive teams must establish and communicate a clear vision for digital transformation, by outlining what digital means for the business, how digital can benefit each department and individual stakeholders, and the profound impact digital can have on customers. The executive team should be able to define the positive financial impact on the business resulting from such change.

Related: 10 Budget-Conscious Digital Marketing Strategies

Prioritize the customer experience.

Forrester Research defined a customer experience-oriented company as an enterprise that "focuses its strategy, its energy, and its budget on processes that enhance the knowledge of and engagement with customers, and prioritizes these over maintaining traditional competitive barriers." And the statistics speak for themselves, with companies that follow this model outperforming the Standard & Poor's Index over a six-year period. This doesn't come lightly however, with the shift to digital taking place on many business fronts such as internal processes, significant influence on new product development and post sale service models. It's this deep and wide change that has executives, staff, suppliers, partners and most importantly customers feeling the impact of this change, but it's important that strategic decisions around digital transformation focus specifically on how they'll impact customer experience. The customer must be central to all change. CMOs should consider this mantra. Does their organization take a methodical, measurable approach to customer experience and its relationship to digital initiatives? How will digital improvements help enhance customer experience?

Fear of change.

Why fix something that isn't broke hey? Well, sometimes (most of the time) organizations need to have the broken bits laid out bare for them to see, and start to understand that change is necessary.

Digital transformation is a big change, so expect to encounter plenty of fear, which leads to resistance. It's important to outline how digital technologies can benefit both company performance and individual teams. Develop a high-level map of what your organization looks like now and how digital transformation will impact each department. Outline what will it mean for customer service initiatives and what the potential return could be. Outline the "hot" areas that need the most attention early on.

Related: Most Small-Business Owners Buy These 5 Digital Marketing Myths

Avoid fear and resistance through clear communication upfront with a proper plan of why change is needed and how it can be made, and the results it will bring.

Digital transformation and ROI.

The ability to demonstrate ROI is a major aspect of your role when advocating for digital transformation. As CMO, you have high-level insights into which Key Performance Indicators (KPIs) are essential for your business and you must make use of this information to define how continued digital evolution will play a role in reaching these KPIs and deliver long term value to the business. Identify and communicate specific examples and metrics for improved productivity, increasing your market share, and establishing (or maintaining) a leadership position within the industry.

Embrace mobility.

Mobility is more pervasive than ever, with the increasingly rapid evolution of new devices and technology -- placing demands and creating opportunities for businesses and consumers. Smart connected devices are revolutionizing many industries, enabling greater customer intimacy, insight and new revenue sources for businesses to pounce on. Consumers expect to be given the chance to access information and services from a mobile device.

They value the convenience. Make a point of understanding where your business can (and must) adopt a mobile offering. CMOs can start supporting a mobile shift by ensuring they understand how mobile devices impact a customer's journey. How, when and why are your customers using mobile to interact with your brand? And finally, be sure to develop an ongoing monitoring program to continuously measure and optimize mobile engagement and mobile user experience.

Get the right people.

Embarking on a digital transformation initiative requires the right talent. Irrespective of the divisions to be impacted, the systems to be changed and the technology needed, technical talent is key. From developers to communicators that will bridge the gap between the tech and business worlds, hiring the right talent will aid digital transformation immensely.

Managing information.

Going digital means the availability of new information. Some companies as part of this move will experience a step into Big Data territory, with other not so large but still left with significant piles of not previously known insights and access to key information. The sheer level of information can be overwhelming, and knowing where to start can become paralyzing. Ensuring that you have an understanding of first what data is now available, and then what metrics you can track as a result of this newly created source of rich information is key.

Some of the most successful companies see data at the core of everything they do. Real-time market feedback, website analytics and other sources of information become a mirror that helps executives determine how effective their efforts are and what maneuvers need to be made going forward. When insights are tested and then put into practice, it creates effective feedback loops that refine how productive and effective your organization can be. It's absolutely crucial that you set a clear analytical agenda to measure the effectiveness of digital transformation initiatives and guide their development in the future.

Nathan Sinnott

Entrepreneur Leadership Network® Contributor

Founder & CEO of Newpath Web

Nathan Sinnott is a tech geek and entrepreneur. He's the CEO of full-service digital agency and investor in a handful of other businesses and startups. He loves scuba diving, surfing and volunteering for an Australian wildlife foundation, rescuing injured native wildlife.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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