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Between 70-95% of all digital transformations fail. Here are five steps to take before starting a digital transformation that will set the initiative up for success.
1. Identify key performance indicators of digital transformation success
You won’t know if your transformation succeeded unless you set specific key performance indicators (KPIs) ahead of time. Some of the most common are return on investment, cost reduction, productivity increase, market share and competitive advantage.
Measure and track these KPIs throughout the initiative. Assess whether your progress is helping or hurting them, and adjust the transformation as needed.
2. Build both strategic and tactical plans
Look forward two-to-three years and decide what you want your business to be. This strategic plan will help guide the overall structure of your digital transformation and prioritize larger projects.
At the same time, create a tactical roadmap for the first six-to-12 months. This plan is more detailed and includes specific action items for each department to perform in the digital transformation.
Working together, these two visions will allow you to meet an overall goal, while remaining agile enough to course correct or incorporate emerging technologies along with way.
3. Get top-down buy in
A department head, or even a CIO, might be the person to implement a digital transformation. But without buy in from the CEO, it will likely fail.
This top-down buy in is so important because the transformation will touch on all pillars of your business: people, technology and process. Without the vision, blessing and direction of the CEO, departments can become defensive and resist changes they deem unwarranted or unnecessary. If the CEO isn’t invested in the original plan, they will be likely to manage to the quarter and change the long-term plan to meet immediate needs. This disruption will doom your transformation efforts.
4. Identify low-hanging fruit
As with any long-term project, it’s key to build momentum early in a digital transformation. Identify several key areas where you can make an immediate impact. This will help raise buy-in levels throughout the organization. It will help establish the best internal processes for your transformation, while also demonstrating early return on investment.
5. Find a digital transformation partner who’s been through it all before
Most businesses are going through a digital transformation for the first time. As a result, they may lack knowledge of best practices.
Find a partner who has helped like-minded or structured organizations transform. This partner should be able to talk strategy with your CEO, understand the transformations’ drivers or motivators, create that two-to-three year plan and help craft the KPIs and measurements for the initiative.
They should also be capable of getting their hands dirty. They should help create that one-year tactical plan and implement it with development and implementation services. The partner should be as nimble and be able to pivot as your business goals/objectives change or new/better technologies become available.
You can find more information on how to prevent digital transformation failure in this podcast.