What Is a Digital Transformation Strategy – Step by Step Guide

Nidhi Raghuvanshi

Senior Writer

Creating Successful digital transformation

In post-COVID reality, more and more businesses are looking to create a consistent digital transformation (DT) strategy to ensure agility and resilience. Data has become a critical enabler for companies to operate within the information age. In a world where the economy is evolving, actionable intelligence has become the new currency. As business process transformation becomes a sign of the times, some organizations are still hesitant to implement new digital technologies.

Looking for Digital Workplace Software? Check out SoftwareSignatureeSuggest’s list of the best Digital Workplace Software solutions.

Today, businesses are facing two options — either adapt to a new digital landscape by learning to implement new digital tools or risk losing to competition. Choosing the former results in a list of questions that need answering. 

This blog will explore how to implement and manage digital transformation. What steps must organizations take to develop a consistent and, most importantly, working digital transformation strategy? What digital tools will benefit businesses the most? Is business process automation the key to a successful digital transformation?

What is Digital Transformation?

digital transformation

Source: Pixabay

Let’s start with a digital transformation definition.

In a general sense, digital transformation is implementing digital technologies across various business processes to improve efficiency and drive business value and innovation. Contrary to popular belief, digital transformation is not only limited to the digitization of existing methods and the use of new digital tools. Digital transformation is meant to help products, processes, and organizations evolve using new digital technologies. 

Digital transformation is often associated with business process automation, software bots, A.I., machine learning, the Internet of Things, etc. In the wave of business process transformation, business users with no technical background, known as citizen developers, are taking their first steps in building applications and automating workflows with new digital tools.

Digitisation vs Digitalisation

Before we start, let’s break down the digitization vs digitalisation definitions:

  • Digitization implies the conversion of all analog information into a digital format. A typical example of digitization is scanning paper documents to save them as digital files.
  • Digitalization is the direct consequence of digitization. The more digitized information an organization can operate, the faster it becomes accessible to all departments. That said, digitalization implies that digital data becomes instantly accessible from anywhere at any time.  

Digitization and digitalization help organizations use digital tools to transform their routine processes that rely on physical paperwork. Taking a step towards digital transformation means a business must review its operations and activities to ensure that it can implement new digital technologies and a stack of digital assets. 

What Is a Digital Transformation Strategy?

what is a digital transformation strategy

A digital transformation strategy is a plan for using digital tools in your company across engineering, manufacturing, and service operations. Implementing a digital strategy often results in profound business process transformation across multiple departments. To put together a digital transformation strategy for your organization:

  • Start with a thorough assessment of your situation using an agile lens. 
  • Next, find potential barriers to your business and your competition. 
  • Afterward, identify a clear purpose, vision, and priority goals for the digital transformation, and a detailed strategy is developed for each step. 
  • Specify the technologies required to achieve this business process transformation, but avoid focusing solely on details.

Today, we see more businesses adopting digital-based operational models focusing primarily on their digital strategy to overcome challenges. According to Gartner, digital transformation is changing products and services, and digital technologies, such as business process automation software and A.I., that support business process transformation will become core competencies.

Companies must adapt to the ever-changing market trends, consumer behavior, and competitive landscape. At the same time, business leaders must consider integrating Agile into an evolving work world by developing a culture of creativity and transforming projects and products.

Why Do You Need A Digital Transformation Strategy?

With so much fuss about digital transformation, the legitimate question for many businesses that still need to jump on the digital evolution bandwagon is whether all companies need to transform digitally. In fact, only some organizations may be feeling the need for business process transformation for various reasons. In the face of the pandemic, many organizations adopted new digital technologies, such as eSignature, and business process automation, and incorporated them into their day-to-day routine. 

Although digitizing existing services is essential, it’s not digital transformation. Piecemeal solutions rarely result in sustaining competitive advantage or operational efficiency. Businesses that don’t have a full-fledged digital transformation strategy and efficient digital tools to support it are putting themselves in a risky position. In other words, they are falling at risk of disruption even more than those businesses with no intention of digitally transforming.

What Are the Four Critical Areas of Digital Transformation?

According to Magenest, the four key types of digital transformation that businesses should take advantage of are: 

  1. Business process transformation uses digital technologies to automate or enhance existing business processes. Business process transformation can span from data entry automation to general improvements in the decision-making process, etc. 
  2. Business model transformation aims to facilitate business agility and resilience by making operational models flexible and responsive to internal and external challenges.
  3. Domain transformation implies that an organization can effectively transition to a different or adjacent industry using new digital technologies and digital tools. 
  4. Culture transformation aims to change the organizational culture by upskilling or reskilling employees to use new digital technologies. Fostering the citizen developer culture is one way to perform a company’s cultural transformation.

 four key areas of digital transformation

What Is A Digital Transformation Roadmap?

A digital transformation roadmap is a sequence of steps for businesses to follow to achieve short-term and long-term goals by implementing digital technologies. Creating a D.T. roadmap is an essential part of a digital transformation strategy.

The roadmap creation process begins by learning about the business needs and finding gaps in the existing system to build an approach that avoids these gaps. When implementing a D.T. roadmap, there must be a clear understanding of how deep the business process transformation will be and which technologies will better suit the purpose. Contrary to popular belief, the changes might go beyond implementing business process automation and A.I. 

Roadmap to Digital Transformation Strategy: Step-by-Step Guide

Creating a practical roadmap to implement a digital transformation strategy entails several steps:

digital transformation roadmap scheme

1. Identifying Goals and Direction

In this step, the organization’s leadership needs to establish digital transformation’s vision and objective(s). After that, it’s easy to determine the following steps to be taken, help assess the results and improve. It’s crucial to define the digital transformation KPIs to ensure that the effectiveness of a digital transformation strategy is easy to measure once it’s implemented. Business process automation software can help you keep track of the KPIs. 

2. Exploring the Digital Market  

A good digital transformation strategy ensures the highest level of personalization while being customer-centric. With so many new digital technologies in the market, CIOs and teams responsible must explore and analyze market trends to adjust the organization’s digital strategy. All it takes is to choose the right digital tools for business process transformation and customer experience improvement.

3. Getting Ready for Organizational Transformation

Digital transformation must happen organization-wide. Getting everyone in the company on board with the idea is essential for achieving success. Not all employees and stakeholders may be fond of the picture, though. Ensuring the reasons behind the changes are clearly explained can foster collaboration and motivate employees to participate. As a result, the new digital culture often originates from business process transformation encouraged within an organization driving the change. 

4. Creating the Execution Team

A person responsible for executing digital transformation needs to be appointed. In large organizations, this can be a Chief Digital Officer (CDO) or Chief Information Officer (CIO), or even an external team. This team should adopt new digital technologies like business process automation to keep up with the organizational evolution. Ongoing digital transformation requires constant learning and expertise to stick to the roadmap.

5. Investing in Technology

Before leveraging new technologies, the Execution Team should assess and accommodate the existing infrastructure accordingly. Choosing the right digital tools that fit the digital transformation roadmap will help avoid wasting time and money. The Execution Team needs to determine if it aligns with the organization’s goals before investing in new digital technologies, whether it’s business process automation, document workflow automation, or A.I. and augmented reality.

6. Assessing the Results  

Since digital transformation is an ongoing process that leads to an in-depth business process transformation, assessing the results should come after implementing each new solution. Taking a step back, analyzing the metrics, and monitoring the impact before making adjustments are crucial. Most importantly, a digital transformation strategy is not set in stone — It is necessary to make updates based on current market trends and industry conditions.

Five Challenges of Digital Transformation Roadmap

digital transformation roadmap creation

If a trip requires survival, you must avoid pitfalls. Here’s the list of the key challenges to avoid when putting together a digital transformation roadmap:

A. Inconsistent Monitoring

One of the common traps most organizations fall into is failing to fulfill their monitoring responsibilities. You can determine the rate you monitor a goal’s performance using dedicated digital tools. This can be on a weekly cadence or every other week.

The person responsible for implementing a digital transformation roadmap must keep track of progress by following the pre-defined KPIs. If not, a company will be wasting valuable time, labor, and energy in the process. Without regular monitoring, achieving the goal of business process transformation will not be possible.  

B. Lack of Tools

It is difficult for an organization to handle customer needs and new product features when it has a new way of working on everything. Using the right digital tools and resources can significantly impact achieving digital transformation goals. For instance, leveraging business process management software can help strategic implementation through a single integration of all project and KPI data. This will help the organization coordinate and deliver digital transformation projects more effectively.

C. Poor Risk Management

Organizations should understand that they have a chance to overcome potential risks. Trying to get the best is an effective strategy to get yourself to the final goal. Occasionally, a digital transformation plan can fail, and the organization can fall behind if it happens. This is why the Execution Team in charge of implementing digital transformation must consider internal and external factors that might impede the in-depth business process transformation they aim at.

D. Erroneous Data

If there isn’t enough detail, it’s just a matter of luck. It’s okay for people to try and run, but if you’re misled, you can end up with poor results, such as when a paid promotion campaign fails to include an amount of budget. A digital transformation roadmap must give you a clear path to achieving the final goal, as well as the digital technologies required for success. Today, business process automation has become imperative when it comes to developing a digital strategy and tracking results.

E. Ineffective collaboration

According to an Appian survey, 50% of organizations deem corporate culture and collaboration to be a more significant impediment to digital transformation than digital technologies or associated expenses. At the same time, 27% of organizations cited a need for more cooperation between I.T. and leadership as the main roadblock. When teams and departments across the entire organization aren’t aligned, they cannot perform at their best. This is why efficient digital tools for collaboration are essential to ensure business process transformation and the success of an organization’s digital strategy.

Five Key Benefits of Implementing Digital Transformation Strategy

benefits of the digital transformation strategy

And now, let’s talk about the key benefits of having a digital transformation strategy in place:

A. Improved Data Collection

Information has become universal and central in digital transformation. Data volumes and sources are expanding exponentially. So how can you turn all this information into actionable insights? How to improve organizational performance? Information management needs holistic and integrated approaches for internal or external processes to ensure efficient business process transformation.

Leveraging digital technologies at every step of the customer journey improves customer data collection, storage, analysis, and sharing. At the same time, the ability to capture paper-based data in various ways to enhance processes, empower knowledge workers, and better serve customers requires several steps and integration. 

B. Better Customer Experience

Research suggests that 35% of business executives believe digital transformation is the key to meeting customer expectations. On top of that, the intense implementation of digital technologies during COVID-19 resulted in a shift in customer expectations, thus forming a new kind of modern buyer.

Today, more and more customers are becoming app-native and savvy with digital tools. The capabilities of new digital technologies make customers rate organizations based on their customer experience first. This is why implementing technologies like business process automation is essential to outperform the competition. 

C. Competitive Edge and Increased Profits 

Organizations that have completed digital transformation surpass their competition and significantly improve their bottom line. 38% of executives plan to invest in digital technologies and business process automation to enhance their organization’s competitive edge. Another research suggests that digitally transformed organizations that have implemented cutting-edge digital technologies experience 23% higher revenue growth than other industry companies.

D. Improved Employee Productivity  

A survey conducted by Zensar among the 1,000-plus employees surveyed showed that digital transformation improves employee productivity. 76% of respondents said that having digital technologies in place helped improve their productivity in the workplace.

No wonder, as using a stack of business and productivity applications can improve communication and streamline daily workflows. In addition, 53% of employees believe using advanced digital tools makes them more successful by allowing them to provide better output.

E. Increased Business Agility and Resilience

Finally, not only does digital transformation foster business process transformation, but it also helps organizations improve their business agility and resilience.  DT is one of the enablers of speed-to-market improvement and Continuous Improvement (CI) strategies adoption. Using modern-day digital tools accelerated innovation while also facilitating improvement. 

Three Examples of Digital Transformation

Digital transformation requires not only profound business process transformation but also significant cultural changes. This is why an organization might need better alignment, competitive advantage, or even a new customer journey redesigned. Let’s explore the three examples of digital transformation that worked for companies in different industries:

A. UPS

digital transformation examples for logistics and operations

In a new generation, couriers see how vital speed of delivery and data analysis are. Unlike a traditional firm, UPS had an opportunity to develop its company as a new startup. The focus on AI-automated software has facilitated a fast package reordering process. Ultimately, this business process transformation and innovation helped improve customer experiences through an improved supply chain, more immediate delivery, and improved delivery.

B. Caterpillar (CAT)

The world-renowned construction and mining equipment manufacturer has become a hardware and software company choosing the niche of A.I. and digital twins.

CAT implemented digital technologies to increase the lifecycle of their machinery by predicting maintenance and the time of part replacements. Also, they are helping customers automate certain operations performed with CAT machinery. Digitalization largely contributed to CAT reaching a revenue of 50.9 billion USD in 2021. 

C. LEGO

digital transformation examples lego

It’s safe to say that LEGO pioneered digital transformation in 1997 by entering the video game market. Next, the company expanded its digital transformation efforts to 3D printing. Over the years, LEGO innovated the toy industry by introducing new elements and blocks that had sensors. Today, LEGO uses .NET as one of its core digital technologies. It’s a scalable programming framework suitable for building serverless apps.  

Why Should You Implement Digital Transformation Now?

implement digital transformation

Many innovative businesses use Industrial Internet of Things data analytics to make extraordinary things happen. They join others who have an opportunity to establish value-oriented ecosystems. Others will be doing incredible things in a different field or similar. 

Nevertheless, those who ultimately will change the world won’t end up being technologists. It is often difficult and expensive to find I.T. managers in a business where marketing is dominated by marketing and CMO decisions when it comes to digital technologies budgets. The I.T. Industry has significantly benefited from services digitalization with new digital tools in its market and business sectors and understands these needs in a way suited to this niche. 

The Bottom Line:

Digital transformation is critical to a successful business process transformation and corporate culture metamorphosis. Innovative, agile, and successful enterprises do not view digital or product development as finite but as a fundamental part of who they are. Think Amazon, Catan, or a spaceship. This massive company has seemingly endless resources, but they’re just like it due to its culture. Unfazed to fail, they ask questions and learn what they’ve done. As digital technologies advance, companies must become more significant and more digital.

Creating a bridge between the potential of existing digital technologies and the ability for the latest innovations is essential to succeed with digital transformation. While most companies struggle in that department, creating a long-term digital transformation strategy enterprise-wide is the most effective approach. Over the last decade, technological innovations and new digital tools have gained popularity and are gradually becoming fundamental components in our daily lives.

Frequently Asked Questions

Digital transformation is a process of deploying digital technologies across various business processes aimed to improve productivity and efficiency, while also driving business value and innovation.

Digital transformation strategy is a plan for using digital tools in an organization across engineering, manufacturing, and service operations. This strategy describes how businesses must strategically reposition themselves in the digital economy.

The key areas of digital transformation are business process transformation, business model transformation, domain transformation, and culture transformation.

Business process transformation is a long-term optimization of business processes driven by the need to adapt to changing conditions and requirements, as well as meet business goals. Business process transformation must be aligned with a digital transformation strategy followed by an organization.

Google News
subscribe image
Let’s Stay in Touch

Subscribe to our newsletter & never miss our latest news and promotions.

people subscribed+21K people have already subscribed 

Related Articles

sitemap
Share This