8 Essential Steps to Make Digital Transformation a Reality

Digital transformation involves the conversion of analog business information and systems, such as paper files and storage cabinets, to modern digital applications and databases. With today’s post-pandemic hybrid workforce, digital transformation helps to prepare for the future by increasing process automation, harnessing the power of big data, and improving employee, customer, and partner experiences.

In many ways, digital transformation has transformed the concepts of time and place by enabling remote interactions around the clock and the globe.

Through digital transformation, business leaders can get heightened visibility across business processes while increasing employee productivity and job satisfaction. Other benefits include improving customer service and realizing greater value from software investments.

Most importantly, successful digital transformation can have a big impact on an organization’s bottom line. Such ‘future-ready’ businesses realize average annual revenue growth of 17% and net profit margins 14% above industry averages, according to a study by the MIT Center for Information Systems Research.

Every digital transformation effort requires prior planning, significant capital investments, long development timelines, and intensive human resources. For these reasons, only 22% of CIOs say their companies are currently ‘digital-ready,’ according to the MIT study. Yet putting off a digital transformation can be more harmful, given the current fast-paced business climate and macroeconomics that demand fast business value outcomes.

Potential problems include stifling growth and innovation, which may allow advanced competitors to leapfrog ahead. Lagging technology can also have negative effects on the customer experience due to outdated applications, services, and processes.

In the following paragraphs, I will break down the digital transformation process into eight steps. The first four involve preparation and readiness, and the next four are about execution and measurement.

Setting a baseline for progress through technology assessments

Before starting any digital transformation, it is critical to define the project parameters and plan the successive stages.

1. Develop an IT roadmap aligned with the contextual goals of the business. An IT roadmap outlines the needs, technologies, and tactics in an overall strategic plan that connects the various investments with overall business objectives. This process should start by communicating the core business needs with CIOs, all IT leaders, and department heads who are technology decision-makers.

Organizations should then map out their future technology investments with benchmarks like product managers planning developments for new products and features. Too often, IT and data analytics teams invest in emerging technologies before defining a clear business use for them.

When considering the development of an IT roadmap, it is crucial to plan out the foundational capabilities that will expedite transformation. The roadmap should also include a plan to phase out applications with redundant capabilities.

It is important for business leaders to define the business challenges and help align technology goals to reach desired outcomes. Treating digital transformation as a technology-driven effort that is not aligned with the business strategy will inevitably lead to failure.

2. Instill an agile approach across operations. IT leaders should embrace an agile methodology throughout the company culture as their core principle to keep pace with constant change. Agility means building a flexible technology framework and infrastructure that can be altered and updated over time.

However, merely being agile within the technology organization isn’t sufficient. It is equally important to cultivate an agile methodology across business organizations to reap the full benefits of agility.

3. Become a data-driven company. Another key goal is to break down data silos and empower organizations with the analytics they need to make better data-driven decisions. For instance, understanding the origins of data silos and devising strategies for enterprise data domains such as Customer and Agency can help facilitate the breakdown of isolated silos to reduce bottlenecks and improve data-driven insights.

4. Invest in tools and processes that are reusable. Organizations should never purchase new technologies just for the sake of owning the latest solutions. IT leaders should instead focus on choosing the most needed software and technology tools, and supporting digital ecosystems that can be applied to many use cases, and ones that integrate natively together through shared APIs.

In addition to investing in tools and processes, organizations must also establish a contemporary architecture, akin to the AWS Well-Architected Framework. This ensures that old practices are not perpetuated under the guise of new tools.

Putting the focus on employee processes and customer outcomes

Digital transformation projects should enable employees and customers to become more productive by automating routine tasks and leveraging innovative technologies to help them reach their goals.

Here are four steps to execute and measure the success of digital transformation initiatives.

5. Invest in customer experiences that meet their needs. When launching customer-facing transformation projects, it pays to listen to what customers have to say about your product or service. Study customer reviews, gather customer feedback, and set up one-on-one meetings with your most valuable partners to understand their expectations.

Another focus area involves enhancing the user experience design for robustness and adopting integrated experiences to replace fragmented tools. This could include incorporating embedded analytics and geospatial capabilities to elevate the customer experience.

6. Upskill and improve workforce digital literacy. More than three in four employees (78%) lack expertise on the tools they use on a daily basis and they could use added training, according to our digital adoption trends report for 2023. Another 84% of employees said there are core features and processes in their software apps that they don’t know how to use.

Companies should support and prioritize enhancing their employees' skills, and allocating resources for upskilling should be strongly supported by the company culture. This issue can be addressed by regularly upskilling employees with employee training sessions, but not all employees need the same level of skills training.

That is why IT leaders should identify what cohorts of employees need additional training through a skills gap analysis assessment that may differ based on employee backgrounds including age, job roles, and career experiences.

7. Monitor the adoption of employee-based applications and customer-facing experiences. The adoption phase is when employees and customers start to realize the value of new technologies, as good habits get instilled into their workflows. Product analytics can help measure user behaviors to monitor effectiveness, spot friction, and identify drop-off areas within digital processes and tools.

Another benefit of monitoring is to catalog all the tools that exist across the organization for duplicative spending on similar capabilities and tools that employees downloaded themselves which can introduce risk and tech sprawl. IT should prevent downloading to reduce user risks and promote the adoption of the corporate solution.

8. Provide performance self-support tools and communicate transparently. Employees often struggle with digital tasks, especially irregular ones such as performance reviews, data audits, or compliance-related duties. More than three in four software users (76%) said it is not easy to find and access the right software training content in the report.

This problem tends to frustrate employees, leading to poor adoption, lower productivity due to independent searches for answers, and many internal IT support tickets. To address this issue, employers should prioritize employee support, including self-service resources.

Also, fostering open lines of communication between IT leaders and employees provides a better contextual understanding of worker challenges and where they need support.

Every digital transformation effort is a journey, not a destination. Each initiative requires a culture of innovation and collaboration to bring together the best people and solutions. Organizations that get digital transformation projects right can outsmart their rivals to drive greater customer satisfaction and steady sales growth that will flow to the bottom line.

About the author:

Khadim Batti is the Co-founder and CEO of Whatfix. Batti co-founded Whatfix with Vara Kumar in 2014 with the mission of empowering individuals and organizations to freely use and experience the maximum benefits of technology.

An entrepreneur at heart with an engineer’s mind, Batti is also giving back to the start-up community by sharing his passion, knowledge, and mentorship with aspiring talent for over a decade and a half.