What Are the Essentials of a Digital Transformation Strategy?

Small businesses, nonprofits and corporations are all embarking on digital transformation campaigns to take advantage of emerging technologies. While the details can be wildly complex and varied, the general goals are usually the same — to capitalize on the power of data, leverage and analyze all available sources of operational intelligence and invest in technologies that make organizations more nimble, effective and cost-conscious.

What are the requirements of a successful digital transformation strategy? It’s an important question we’ll answer in this guide.

What Is a Digital Transformation?

It’s worth establishing a working definition of digital transformation before we explore what goes into a successful digital transformation strategy. Digital transformations look different to different people, organizations, companies and nonprofits.

However, if we wanted to settle on a definition, it would be this — a digital transformation is a technology and culture investment campaign that seeks to make an organization’s key departments, processes and functions more effective, productive, efficient, sustainable and cost-effective to perform.

The technologies involved in digital transformations include:

• Mobile and handheld computing devices
• Internet of Things (IoT) sensors
• Equipment telemetry analysis
• Cloud storage, applications and/or computing
• Machine learning and artificial intelligence (AI)
• Robotic process automation (RPA)
• Blockchain and advanced cryptography
• Digital twins and advance simulations
• Augmented reality (AR) and virtual reality (VR)

It can be daunting for organizations with limited or nonexistent technology stacks to begin the research phase only to find so many applications, services, connected technologies and IT partners available for hire. Narrowing down your vision and isolating the most strategic and timely investments — both in technology and culture — is the point of creating a digital transformation strategy.

What Are the Essential Features of a Digital Transformation Strategy?

Your organization’s digital transformation strategy serves a couple of functions. First, it’s a statement of intentions. It’s an expression of your current mission statement, your goals and what you want to get out of your next investments.

Mounting a digital transformation campaign is your chance to have your technology stack and critical portions of your culture more closely mirror your goals and values than ever. Many technologists see digital transformations as a way to “mature” a company’s focus and drive it forward with a committed, laser-like focus.

Second, your digital transformation strategy is a roadmap. It ensures nobody gets swept away by their enthusiasm for onboarding new technology and takes unnecessary detours. Staying focused and only making strategic investments, when you need them, is an important reminder to carry with you as you continue this journey.

So what features or tenets should this digital transformation strategy have? Without any further delay, here are the most important points it should lay out and some pitfalls to avoid.

1. Understand (And Talk About) the “Why”

Remember that the phrase “digital transformation” itself rings differently to different people. What does it mean to your organization? And — more importantly — why are you going through the trouble of making a strategy?

Every stakeholder should understand why you’re making an effort to digitally transform the organization. This starts with naming goals for each department or singling out a process for transformation. Connect with subject-matter experts in those departments to make sure the efforts are necessary, understood and prepared for.

2. Prepare to Adapt Your Culture

There’s an even deeper cultural aspect of embarking on a digital transformation. Adapting your culture is an important precursor step to actually deploying and configuring your new technologies and processes.

Think about naming a digital transformation liaison in each critical department that you’re investing in. This person should be a good communicator because their job will involve communicating priorities to the C-suite regarding technology and investments, and in turn learning the new tech and concepts and being prepared to bring that knowledge to their teams.

Overall, adapting your culture means creating new avenues with which to collaborate, cooperate and exchange ideas — a kind of knowledge infrastructure that exists independently of the technology infrastructure.

3. Invest Conservatively, With Purpose

It’s important to remember that a digital transformation is a journey — not a one-and-done overnight overhaul. The goals you’re chasing by investing in digital infrastructure should be clear, quantifiable and measurable. Make sure you’ve clearly stated your objectives; digital transformation investments should be made once the case is made, rather than the other way around.

Too many products in the IoT, cloud computing and digital transformational landscape are solutions in search of a problem. Think of your organization as modular. Each department or current pain point is one module. From there, take conservative steps to invest in your infrastructure, starting with your highest-priority or highest-value items.

4. Have a Process for Soliciting Feedback

A hallmark of a successful digital transformation strategy is having a built-in process for soliciting feedback from stakeholders. The goal is to create the sense of a living, breathing commercial organism, where each process naturally leads to its own improvement. There’s a way for process improvement ideas to percolate back to the people who can make it happen, rather than just those empowered to observe it.

Treat your digital transformation as a “meeting of the minds” or a coalition. Make sure the department heads — or the digital transformation liaisons you identified earlier — know about the KPIs you’re using to measure the effectiveness of your investments. Let these be your common language as you determine what’s going well and what needs further refinement over time.

A Digital Transformation Strategy Makes for Strategic Investments

Remember to treat your organization’s digital transformation as a journey to savor rather than a destination. Most of us don’t get in our car and set off in a random direction — we begin our journey with intention and specific, measurable goals and work from there.

Your digital transformation can embody similar ideals. Meshing physical and mechanical processes with digital and usually cloud-based ones brings many opportunities — as well as possible pain points. The goals are efficiency, productivity, waste reduction and cost-effectiveness. Keeping the fundamentals in mind will let you sharpen your strategy and spend your money wisely.