In the last two years, the topic of Digital Transformation has exploded. Interest levels in these two words have been driven up significantly by recent large-scale market disrupters such as Uber, Netflix, and Amazon – making even the biggest businesses take notice and question the stability of their future. The cause of this accelerated digital disruption is borne out of a new breed of consumers who have, in their pocket, an internet connected computer roughly a thousand times more powerful than Apollo 11.

This has enabled keen entrepreneurs to launch web and mobile applications that solve needs in ways never before possible. For example, Uber didn’t remove the need for a car to drive you to where you want to go. But they did make it significantly more convenient to find, request, and pay for your ride. In fact, despite many complaints (myself included) of Uber drivers not knowing their city as well as traditional taxi drivers, all the other conveniences of Uber have secured it the top spot in 108 countries.

What is Digital Transformation?

Digital transformation in the context of this article doesn’t mean ‘going paperless’ or implementing Marketing Automation. Wikipedia defines Digital Transformation (DX) as enabling new types of innovations and services, not simply enhancing the current business. The concept is driving the next industrial revolution. However for most companies that I’ve come across, digital transformation means looking across their business and making sure the entire customer experience they create matches the evolved expectations of their customer.

Does Digital Transformation Affect My Business?

The short answer is yes. In fact, a recent study of 450 digital transformation leaders said that 89% felt their businesses were being digitally disrupted. I challenge CEOs (and board of directors) to not be blinded and really examine how well they’re doing from a customer experience, sales, and marketing perspective by leveraging digital strategy and tools.

Digital transformation is hard. The same study shows a majority of business expect to fail within four years if their digital transformation goes wrong. Needless to say, the stakes for true digital transformation are high.

Business Leaders: Think About The 7 T’s of Digital Transformation

I recently did a presentation on digital transformation and listed seven areas for business leaders to think about when building a digital transformation plan. Goose Digital also has a Digital Readiness Accelerator whereby we score an organization in these areas to establish a transformation roadmap.

  1. Team
    First and foremost, a successful digital transformation starts with the CEO. It is a top-down initiative that will only get the priority, importance, and permeation across the business if it starts at the top. Then consider the team you will need to help build and execute your digital strategy. You’ll need individuals across the organization to actively participate, so it’s important to identify early on where you may need additional ‘digital’ skill sets to support the business and traditional operations. Key individuals across the executive management team will be involved along with IT, Marketing, Customer Service, and Sales. For example, you may need to hire a contract Chief Digital Officer, shuffle team members into new roles, train, or hire top grade individuals/service providers. 
  2. Tolerance
    This refers to the significant risk that exists for some traditional businesses about to embark on a digital transformation. You’ll need to evaluate the risk associated with the proposed strategy, tactics, and timeline along with the risk associated with not moving forward. Use this analysis to create your tactical plan and timeline that mitigates as much risk as possible. 
  3. Timeline
    How long should a digital transformation take? Great question. It’s not for the faint of heart and transformation experts at McKinsey agree it is a marathon not a sprint. I will often ask clients, “how long did it take to build the business you have today?” The answer to that question usually helps the team understand that this won’t happen overnight. However, depending on the business, it seems like most are aiming for a 3-5 year timeframe. It could happen faster (or take longer), and it’s not like you won’t see (some) bottom line benefits along the way. As such it is incredibly important you have some defined indicators of success. 
  4. Technology
    Digital transformation is not an IT problem, it is a business problem – this is almost always confused at the executive/board level. Business leaders are pointing to IT to solve what is arguably the largest business problem faced by businesses today. Having said that, traditional IT departments will have to have a significant mind-shift in order to empower the level of change (and speed of change) that will be required. At a high level this means breaking the traditional IT paradigms to enable a highly agile, iterative, data driven IT team that truly removes friction to create an engine of growth. IT leaders need to be honest with themselves and their executive team in terms of the very real constraints that they face in their business. Legacy software, systems, processes, and staff could be weighing the business down in a detrimental way. While IT isn’t going to solve your digital transformation problem, without a next generation technology approach your plan is doomed. 
  5. Testing
    The worst thing you can do is a Big Bang approach to your digital transformation. Your Technology team should be using minimum viable products (MVP) and agile methodologies that allow you to come out with strong solutions to test your product, service, and marketing concepts. Your digital team should run multiple experiments to test customer adoption. If something is not working, kill it fast and iterate. Don’t be discouraged if something doesn’t work – this is a good thing because it means you can get closer to the answer. Once something works, rapidly build on it and continue to test it until rolling it out for everyone. 
  6. Tactics
    You’ll develop a high level strategic plan that includes a multi-year view that outlines what success looks like. That plan will need annual tactics broken down by major quarterly milestones. Trust me when I say it will be easy to get overwhelmed with the number of ‘things’ that end up on the tactical plan. Obviously prioritizing tactics is critical, but it will not be easy at first. The best advice is to align your tactical plan under the big strategic headers and have the discipline to challenge things before committing to them. If you can’t draw a clear line back to the strategic priority, it shouldn’t be on the digital transformation tactical plan for the year. 
  7. Tracking
    How do you know you’re getting there? It is important to identify leading indicators of successes. That is, KPIs that show you’re moving in the right direction, but ultimately may not be the end result metrics you use to run the business (Revenue, Gross Margin, EBITDA). For example, these leading indicators could be: % of customers who are early adopters, % of customer service interactions over new channels, or % of orders entered online versus via a sales person. Produce a quarterly board pack that showcases the progress at a high level.

Digital transformation affects everyone and unfortunately many businesses will not make the cut and will fade off into the sunset. Those who will survive, will take a strategic, top-down approach to reinventing themselves. They will put everything on the table and ask the tough questions. And they will make the tough decisions needed to ensure their business meets the evolving needs of the customer.

Contact us for more information on how Goose Digital can help you achieve your digital transformation objectives.