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Digital Transformation Best Practices

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Digital Transformation Best Practices

The term “digital transformation” (DT) encompasses the holistic framework and the associated strategy designed for integrating technology, business processes, and employee effort to get the maximum value for business customers. In a digitized business model, the “customer journey” is the central focus. While creating the DT framework, the business operators develop business models that are most suitable for achieving their business goals. In a nutshell, digital transformation best practices describe the underlying procedures needed to advance the technology-enabled blueprint for running a particular business operation for maximum value.

The global DT market has been forecasted to grow at a CAGR of 23% between 2019 and 2025.  According to IDG’s CIO Pandemic Business Impact Survey 2020, 59% of surveyed executives said the pandemic accelerated their DT efforts.

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The digital transformation trends to watch this year are renewed focus on cybersecurity, rise of CDPs, rise of contactless solutions, citizen AI, multi-cloud infrastructure, 5G, and data analytics. But how will these trends materialize? By adhering to DT best practices, of course, which form the rest of this post.

Why Do Businesses Need Digital Transformation Best Practices?

In the digital business world, the increasingly demanding customers want more convenience in shopping, and more custom solutions for their shopping needs. The immense pressure to succeed in such a demanding business world has forced organizations to engage in a race for “rapid digital transformation.” McKinsey analysts have made these observations:

  • “Less than 30% of digital transformation initiatives are successful.”
  • The organizations that succeed in implementing DT use more technologies than others.
  • The chances of success in DT are much higher when goals are aligned with a clear strategy before execution.

This is where the need for digital transformation best practices crop up. Without best practices, DT executions are highly likely to fail the test. But then, as Forrester reminds, “DT is not just about technology.” It is actually a combination of many desirable qualities of a digital business: digital first operation, provisioning of rapid change, use of technology for lean operations, and freeing up of talented workers for complex tasks.

The digital transformation of a business can provide location choices to employees. According to both Caprelo, a work relocation company, and Robert Half, the global staffing company, remote work (work from home) is a highly desirable option, and a sizable portion of the employees would reconsider their jobs if required to come back to office. 

This desire to work from a remote location is even higher among working parents. Flexjobs reported in April 2021 that 62% of the surveyed parents mentioned they would quit if required to return to office.

Implementing a Digital Transformation Framework

In the real world of digital businesses,speed is the currency of a successful digital transformation effort. Large enterprises may have multiple DT projects taking place concurrently. In such a scenario, DT team managers may be handling the schedules and performances of many teams at the same time. Add to that, multi-region execution of DT efforts for global companies with varying customer needs.

Gartner has recommended using the following six elements in a digital transformation best practices framework:

  • Creating a digital business center of excellence (COE)
  • Developing and acquiring digital business skills and roles
  • Creating the right mindset and a common understanding
  • Putting effective leaders in charge
  • Developing a digital transformation strategy to handle threats and opportunities
  • Developing new digital business capabilities

Here is a cheat sheet that DT leaders can use to develop a digital transformation framework and a digital transformation strategy.

Digital Transformation: An Aspirant’s Short Guide

In a data-first business, the business operators have so far relied on a successful digital transformation initiative for the operating model to work. While reviewing authoritative guides on digital transformation, one may come across a vast number of guides and checklists from equally reputed sources, but here are 10 basic DT best practices that a newcomer can make use of:

  • Build the appropriate culture for digital transformation: DT initiatives involve risk-taking and experimentation, intense hypothesizing and testing and an effective use of talent. This work culture has to be carefully cultivated in the initial stages.
  • Define the problem you are trying to solve through digital transformation. The starting point of an effective digital transformation strategy is a handful of desirable goals and KPIs.
  • DT is all about teamwork between different departments as multiple disciplines are involved in building the framework and strategy. So, multi-departmental team development and collaboration are foremost concepts in digital transformation projects.
  • Data versioning may be a useful method in recording failure points, so that previous points of failures are not included in new experiments.
  • Develop a digital transformation governance system. In the case of a DT framework, the office of the chief information officer (CIO) will be closely aligned with working teams to ensure overall workflow and goal-setting in each step. The line of business leaders (LBDs) will execute tasks handed down by the office of the CIO within budget and within goals. The digital transformation council usually plays the role of the mediator, channeling communication between CIO office and LBDs.
  • In DT, goals may be set by analyzing customer expectations. This information may be obtained by a combination of technologies like customer data mining, telematics, and behavioral analytics.
  • When bringing in new technology to augment or enhance legacy systems, it is better to conduct thorough cost-benefit analyses before making investment decisions.
  • Comparisons are needed to gauge the effectiveness of DT initiatives. So, creating performance benchmarks of current processes is a good way to compare post-DT performance metrics with pre-DT metrics.
  • Hire the right talent to execute the DT strategy across the enterprise. Metrics evaluations may also include staff performance metrics at the end of a DT lifecycle.
  • A cloud-based analytics dashboard may be the best single-point view to assess process and people performances within a DT framework.


Business Benefits of Digital Transformation Best Practices

Here are four direct benefits attributed to successful digital transformation efforts in a business:

  • Development of newer and better business models
  • Speeding up of business processes (agility)
  • Ideal environment for data-driven decisions (data-first)
  • Enhanced customer experience (CX)

In conclusion, you are requested to review the most critical aspect of a successful DT effort: Data Governance. In a data-first business world, don’t overlook digital strategy as means to reduce risk and regulatory lapses.

Image used under license from Shutterstock.com

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