4 key aspects to consider before starting your transformation journey
Why is implementing digital transformation so hard?
Companies struggle with implementing digital transformation because it encompassess all aspects of a business. Digital transformation is not just about technology adoption, it’s about multifaceted change that leaders have to manage. Digital transformation refers to changing something that’s core to your business, it would be strange if implementing it would be a piece of cake. Before you start a digital transformation journey in your company, you have to prepare and consider many things: from assessing how your employees will react, to how the change will impact your processes, suppliers and your customers. To make it easier for you to prepare that bumpy road, we summarized 4 key aspects to consider below.
#1 Business strategy as a guide for digital transformation
Leaders understand that digital transformation is a must. Shareholders expect it, and so do customers. And all of this was accelerated due to the COVID-19 crisis. However, leaders must understand digital transformation is a means, not a goal. And that goal is related to your business strategy. Before deciding to undergo digital transformation, ask yourself why you see a need for this change and who can help you validate this need. Only by starting from your business strategy, you can design a digital transformation strategy that has a chance of succeeding. Business strategy is the starting point for the whole digital transformation process.
#2 Identifying and finding essential capabilities
Another reason why it is so hard to implement digital transformation is the lack of understanding of what capabilities are needed on the one hand, and the lack of capabilities on the other hand. These are still two different things. The first refers to the very beginning of your digital transformation project; Once the goals are established, you should ask yourself who will be involved, what skills are needed, what capabilities are required, and what roles will have to be played. But if, as a company, you have no experience at all in digital transformation or digitization, identifying those needs is hard. We often see that organizations immediately look for talent to help them set up their digital transformation project. But they skip the step of asking themselves what capabilities they are actually looking for. How can you write a vacancy for a job you don’t understand, let alone design a proper hiring process?
Secondly, if you succeed in identifying what skills and capabilities you need, you have to find talent owning them. Soon you’ll discover the huge capacity problem almost all companies face these days. Solution architecture, cybersecurity, devops….all essential skills to almost every digital transformation project, but all so scarce…You might have them in house, proper transformation projects also require scale, and sooner or later you’ll face a capacity problem.
Another question to ask yourself is whether or not these skills and capabilities should be strategically owned or developed in house, or whether they should be outsourced. In the latter case, you will also have to make a decision on the engagement model you will choose. From simple consultancy, to project-based models or teams-as-a-service: there are many options, but not all of them will be applicable to your case. The opportunities of collaboration are endless, but difficulties in finding the right partner(s) are definitely common because of the wide variety of engagement models and quality these different parties demonstrate. Feel free to reach out to us, to have a better understanding of how you can leverage ecosystem partners to design and execute your digital strategy successfully.
#3 A thousand solutions and even more suppliers
A third reason why digital transformation is so hard to implement, is because the variety of solutions is so overwhelming. Yes, you understood us well. We are not even speaking about the complexity of those solutions, only about their number. Let’s give an example. Let’s say you are switching to a new ERP system because your current ERP system doesn’t fit your needs anymore. Just a sidenote here, we can discuss the fact whether switching to a new ERP is a digitization or a digital transformation project. But let’s skip that discussion for now and stick to the scope of this post (you can read more about it here).
Let’s assume the ideal scenario, one in which you perfectly know what features your are looking for in that new ERP system. The next step is to investigate the type of software solutions that are already available on the market. You will find a thousand ERP softwares that magically fit your needs perfectly and an even larger number of firms that can implement them for you. Lucky you, we hear you think. Or not. Because now you will have to choose between softwares that all seem perfect. You will have to make this decision based on short demos or trial periods and superficial conversations with specialists that know their - and only their - software like the best and promise it is the holy grail.
This feels overwhelming. When you face this problem, we advise you to first approach a party that has a good overview of the variety of solutions that is available on the market. A generalist party let’s say. They may not be an expert in everything, but they will definitely show you all paths available and advise you on what path to take best. After consulting a generalist party, you can still make your own decision on the supplier and way of collaborating.
#4 People at the center, even if it's about tech
We can’t write this post without speaking of change management. People resist change. Although that is not new to you, we still often forget about it. One common pitfall we often see is treating the transformation project as just another internal project. In an ideal scenario, an internal project is guided by dedicated project managers, has a well-thought budget and is supported by a committed team. All those things are needed for a digital transformation project, but they are not enough. This is because project management is important to implement digital transformation, but even more important is change management. Elaborating on this topic means we have to write another blog post about this (and we definitely will), but let’s just give you a few essentials to not lose out of sigh when implementing digital transformation:
- Making sure people understand the “why” of the transformation project, that they see the value it will bring to them, their team and the organization as a whole
- In depth training and regular support during the transition to new tools and processes
- Empower and incentivize people to use new processes and technologies set up
- Creating a sense of urgency
In this blog post, we tried to create awareness of the complexity of implementing digital transformation. About how it is about much more than just technology adoption, and about how people are - as always - at the center. We hope we did not scare you writing this post (just kidding), but that you have a better understanding and feel more prepared to guide a project like that to create growth for your company. Any thoughts on this blog post? Let us know via our contact page.