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Getting Digital Transformation Right

By: Stephen Pappas

Digital transformation is more than applying digital technology to create incremental operational efficiencies. A company can digitize a previously manual process to make an existing process better—but that is incremental improvement. Digital transformation is a larger, bet-your-business proposition.

For one thing, digital transformation efforts are intertwined with customer experience (CX) and CX improvement is done using digital technologies. A new survey from Altimeter Group on the State of Digital Transformation finds 54 percent of companies are fast-tracking efforts to improve and integrate omnichannel CX. That same survey found CX to be the second-biggest digital transformation driver, right after capturing growth opportunities in new markets.

Research has shown that although many companies are trying to transform using digital technologies, many of these projects go awry or are abandoned before completion. A survey by Wipro Digital, for example, found that only 50 percent of companies are successfully executing on their digital transformation strategies.

The upshot of these findings is that if a company gets digital transformation efforts wrong, the results can negatively impact CX and make it difficult to obtain and retain customers. Clearly, getting digital transformation right is a business imperative.

Transformation that results in better CX and company growth sounds great, but how do you get there? Which technologies—cloud-based apps, artificial intelligence (AI) or knowledge management (KM)—should be applied? Certainly, trying to custom-build solutions in a best-of-breed fashion can be difficult. Because of this fact, part of the answer lies in finding foundational technologies that can be adapted for multiple digital transformation objectives.

It is a mistake, however, to lead with technology. Issues like getting digital transformation project leadership and breaking efforts down into smaller phases are just as important as the software you’ll leverage. Get the human elements right first, while looking for technology solutions that serve core roles like advanced analytics and knowledge management. 

Digital transformation governance

Since digital transformation efforts are crucial to business success, it’s important to focus first on the project management or governance aspects of digital transformation, including elevating involvement to the highest levels in the company.

Why? Digital transformation, by its nature, isn’t departmental. Transformation that works across channels—and throughout the product lifecycle—needs the backing of top executives and collaboration from multiple departments to succeed.

For example, an outcome such as better customer support across channels might involve chatbots on a website governed by one department but also field service operations led by another group, and product revisions led by another. Coordination between top functional leaders, overseen and driven by a C-level executive, will ensure alignment for the digital transformation objectives.

As for top executive involvement in this initiative, if a company is really out to transform, top leaders must drive the change. Digital transformation leadership may simply become part of a CEO’s job description. In fact, in its Digital Transformation predictions, IDC foresees that by 2022, the chief digital officer title will be on the decline, while 60 percent of CEOs will have spent part of their careers leading digital initiatives.



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