Digital transformation strategy is crucial for every organization of all sizes ranging from small to big enterprises. But what factors that are exactly forcing these organizations to digitally transform themselves. The popular opinion is that positive changes in company’s culture, streamline of business operations, and improved performance. Businesses see the need to change according to the era, with the advancement of technology everywhere and the fact that human lives become more and more interconnected and dependent on technology.
Why most companies fail to digitally transform themselves?
According to GuideSpark, two-thirds of businesses are aware that they have to transform digitally by 2020 in order to stay competitive. Businesses are completely aware of this requirements in order to stay in the competition, however digital transformation is not easy, many businesses have failed to adopt the digital transformation. As stated on CNBC news , GE (General Electric), Ford, and P & G failed at digital transformation, $900 billion was wasted on failed programs. The biggest reason for the failure is the company failed to effectively communicate their goals, strategy, purpose, and outlook with the employees.
Although the majority of businesses are aware and trying to be a technology-enabled company, a staggering number of 70% companies have failed to achieve digital transformation. GE created a new digital business unit but they were focused on size instead of quality, Ford started a new digital services that is separate from the rest of the company instead of integrating digital solutions, and Protect and Gamble did not consider the competition or impending economic crash. These companies have failed at digital transformation but they tried again and got better success.
It’s important to note that the failure of digital transformation doesn’t ultimately end the company’s journey, learn from the mistakes and analyze what the company does to avoid the same mistakes again is the right attitude. But first, Let’s take a look at why these companies failed in more detail. In 2018, GE started the initiative to digitally transform the company by asserting itself in the digital software space by building a huge IoT platform, adding sensors to product, and transforming the business model to industrial product. Then the company created a new business unit called GE digital in 2015, the goal was to leverage data turning GE into a digital power house.
However, despite pouring billions of dollars into the transformation, the company’s stock price continued to fall, and the company was stuck with the focus on having to report to shareholders. The lessons learned from this case is the company have to focus on quality not the quantity, the company was too big to try transforming the whole organization at once, lastly the company also didn’t have any strategic focus in any area.
How to successfully digitally transform your company?
In order to digitally transform successfully, the company is expected to have a thorough plan and clarity of goals. There are five main elements of digital transformation strategy which will help any company able to digitally transform with less risk of failing.
Assess your company situation
It’s not easy to start the transformation, especially when the leaders don’t know the company’s situation. In order to develop a great digital transformation strategy, the company should know where the company stands, how the culture and values like, etc. assessing your company’s situation is also important to identify what area needs to be improved and focused on. The assessment process includes outlining a clear structure of process and roles, assessing the skill set of the employees, and finding out businesses weaknesses and pain points.
The key success of digital transformation is when the strategy is aligned with business goals and mission. Companies are recommended to follow the format ‘why, what, and how’ to develop goals set. Ask the fundamental questions like why the company needs to transform digitally, what needs to be transformed, and how can the business transform. By working each goal through with the help of above questions, businesses are able to define smart objectives and address business needs.
Pilot testing is a verification process that is undertaken before the real launch, it’s done to ensure major functionality. It helps businesses give real insight of the program and identify the readiness of the strategy, whether some areas need some adjustments or it’s ready for digital transformation. This stage includes defining clear outcomes for the pilot test, creating a testing group consisting of employees, collecting the feedback, concluding the test by deciding whether there’s anything to be improved or the strategy is ready. Digital transformation is not gonna be easy as it involves major changes.
By creating a roadmap, your company will be able to have a more detailed vision towards digital transformation. Developing a specific strategy to achieve your company’s goals is very crucial. This stage includes reframing the company's infrastructure, the lack of skills and knowledge regarding digital transformation of employees, upgrading technology stack, defining key goals and priorities, and identifying key strategies for each stage of digital transformation.
Be ready for the cultural changes
Last but not least, one key element that will determine successfulness of digital transformation is the organization’s culture. Organization’s culture will definitely have to change, adjusting with the digital transformation that is happening in organizations. Digital transformation is not just about integrating different technologies, but also about changing employees' mindset. Based on Team International past experience, there's approaches to change organizational culture. Firstly, by showcasing the importance of significant change in organizational culture, making employees understand and aware the changes is needed in order to grow together with the market. Secondly, showing the employees slowly but steadily, let employees experiment with fresh ideas, utilize technology, motivate them to be innovative and adaptable.
Digital Transformation is a must even though there’s a high risk of failing and a high level of uncomfortableness that enterprise has gone through, but the result is worth it. It’s possible to achieve with thorough planning and deep research on digital transformation. Getting a professional agent to help doesn’t sound bad either. Volantis has helped many organizations from various industries accelerate digital transformation through AI, Machine Learning, Big Data, and other advanced technologies. Please contact us for free consultation,click here