With the right planning, leadership and skills, companies can use digital transformation to drive improved revenues and customer satisfaction in the year ahead.
By
Rahul Sing and Shehzad Amin, West Monroe Partners
Published: 24 Nov 2020
As 2020 winds down and enterprises look to 2021 to drive economic recovery and improvement, it's clear that digital transformation is here to stay. Many IT teams successfully accelerated digital initiatives during the pandemic to drive efficiencies and support work-from-home models at scale. As there is no end to the pandemic in sight and the need for flexible, collaborative technologies is only becoming stronger, these organizations and others are continuing to use the benefits of digital transformation to drive expanded efficiencies and valuable insights.
With the proper strategies and capabilities in place, enterprises can use digital transformation to pull the right levers for intended business outcomes. The following are five critical digital transformation success factors for making these initiatives work as a key business enabler in 2021.
1. Get leadership house in order
A major key in succeeding with digital transformation efforts is having the right leaders in place who can set a vision and a roadmap that the organization can get behind. These individuals must have a clear understanding of both the business and digital technologies.
Successful digital leaders will need to find ways to encourage their teams to challenge the status quo and take risks knowing full well that not everything the team does will be successful. Leaders must also work cross-functionally -- and with relevant external partners -- to enable their digital transformation teams to cut across organizational boundaries as this enables better adoption of digital technologies.
2. Formulate and align strategy
Digital transformation requires a strategy that goes beyond IT's vision of what technologies to implement. Rather, it must answer the question of how technology will help the company deliver a differentiated product or offering to the marketplace. IT leaders should be able to demonstrate how their strategy is enabling key business growth objectives.
In today's world, the rate of innovation in technology and disruption of business models is exponentially higher than ever, making it a challenge to develop an IT strategy that will stay relevant for three to five years. A crucial digital transformation success factor is to reassess the roadmap in year two or three to ensure the IT strategy is still relevant, and course correct if necessary due to tech disruption or business model evolution. Being nimble and adaptable is integral to a successful strategy.
With the proper strategies and capabilities in place, enterprises can use digital transformation to pull the right levers for intended business outcomes.
3. Put data to work
Digital transformation initiatives often involve analyzing vast amounts of structured and unstructured data in order to gain rapid insights. Organizations can then use the insights gleaned to inform digitization priorities and strategies, as well as automate and improve workflows.
Reporting and process improvements can be helpful success factors of digital transformation, but greater value can be found in incorporating big data into the mix, including IoT data from various devices, phones and machine sensors. This enables a wider net of automation across all operations and the opportunity to drive new efficiencies and business models. It also gives companies the ability to respond to customer needs in near real time, as well as utilize predictive analytics to anticipate new needs.
4. Form an "A" team
In order to drive intended digital transformation outcomes -- whether by using the cloud to reduce operating costs or implementing a new SaaS offering to glean deeper customer insights -- organizations must bring together institutional knowledge and strong process-oriented problem-solving skill sets.
Typically, a "two-in-a-box" approach works well by pairing individuals who are familiar with the business work flow and associated rationale with an expert, process-oriented problem solver who engages the constituents -- i.e., users of a process -- to determine what will or will not work. There are many ways to transform, but only a few of them result in desired outcomes driven by transformations that are adopted uniformly with the right combination of skill sets.
5. Maximize investment value
Funding decisions around digital transformation projects tend to vary among companies. However, the pandemic has placed new demands on work environments, driving faster overall digital transformation adoption, particularly when it comes to technologies enabling remote work.
In contrast, there are also IT departments dealing with expanding pressures to cut costs. Due to this dual dynamic, one of the more crucial digital transformation success factors is that enterprises thoroughly evaluate the value of the initiatives to ensure maximized investment value and returns.
About the author: Rahul Singh is a senior director at West Monroe, a national business and technology consulting firm. He brings more than two decades of experience in driving IT strategy, innovation and IT delivery and leading complex global transformation initiatives for global organizations. West Monroe senior manager Shehzad Amin also contributed to this article.
