Digital transformation is not a magic wand

Digital transformation has become a popular tech trend. Businesses aiming to succeed in today’s digital economy are shifting manual, analogue processes and systems, and transforming them with modern technology. While the goal of streamlining and updating systems and tools may be what attracts decision makers to digital transformation initially, many don’t consider the deeper level of investment required to create a truly connected business. 

Instead, they have been led to believe that digital transformation is a magic trick where they simply wave a digital wand to change a process or two. Poof! Their business is revolutionised. 

Though the digital aspect is an important part of transformation, businesses that view digitisation as a one-step process miss several components that are required to make the transition truly successful.

Benefits of digital transformation

Digital transformation isn’t just about modernising tools and processes, it’s about gaining an edge in the marketplace. A report from Gartner notes that two-thirds of business leaders say they need to digitise to stay competitive. Below are some of the broader business outcomes that digital transformation can support.

• Increased efficiency: digital approaches such as automating business processes reduce redundancy and increase efficiency across a company – helping workers tackle tasks accurately and rapidly.

• Deeper insights: in addition to improving manual tasks, digital transformation also provides business leaders with invaluable insights through real-time data from across the company that might otherwise be siloed. This gives companies comprehensive, actionable information, which helps serve existing customers and advance business objectives. 

• Greater innovation and agility: digital transformation allows companies to let go of slow, outdated legacy systems. In turn, they can be more flexible and responsive using new cloud-based systems. Businesses that adopt new digital tools gain a chance to develop practices that keep pace with market demands.

• Greater profit: Deloitte reported that digitally mature enterprises see industry-leading revenue growth and profit margins – demonstrating the power of digital transformation as a true differentiator.

With the notable benefits of digital transformation, it’s easy to see that it’s an essential element of meeting the demands of today’s economic climate.

Companies with the most successful transformations have gone well beyond simply implementing new technologies. They’ve also adopted a different mindset about what digital transformation actually means. These companies see it as a long-term process that involves each person at the company – not just the primary decision-makers. 

Digital transformation is a mindset, not a magic trick

Though digitising processes and systems is certainly an essential element of modernising a business, it doesn’t solve the whole problem. The core technology purchase is only the first step. The real work of digital transformation is its full implementation, user buy-in and training, and subsequent application integrations. 

This process involves a critical mindset shift that business leaders need to adopt to reap the benefits of their new technology investments. They must understand that digital transformation should be considered a way of life – not a one-and-done system upgrade. 

As an MIT Sloan Management Review and Deloitte’s global study showed, digital transformation isn’t really about technology. It’s about how companies integrate technologies to understand and transform the way they work. In other words, the transformation is ongoing, well after new tools have been introduced. According to McKinsey & Company, 70 percent of digital transformations don’t achieve their desired goals. In order to ensure a transformation is successful, it’s important to think about it as a continuous process, not a one-time change that occurs over a single weekend. 

In order to ensure a transformation is successful, it’s important to think about it as a continuous process”

The human component of the shift cannot be underestimated either. According to a Gartner survey, the top internal roadblock to a business’s successful digital transformation is to overcome ‘culture challenges to accept change.’ All employees, from the frontline to the C-suite, must understand the reasoning behind transformation and how it will improve their roles within the company. In other words, the transformation won’t be as successful if the people affected by the changes don’t understand the ‘why’ that’s driving it. As the Harvard Business Review stated, “To harness people’s full, lasting commitment, they must feel a deep desire, and even responsibility, to change.”

Culture and technology are one in the same in digital transformation. A company’s workforce must play an active role in driving progress and innovation after new technologies are rolled out. Everyone must see the transformation as an ongoing, systematic solution that drives greater transparency, agility, and growth. Achieving these goals is no easy feat, but there are a few best practices that can help business leaders set themselves up for success as they plan their digital transformations.

Ensuring success with digital transformations

Taking a phased approach to digital transformation is one of the surest paths to success. The future effectiveness of the project often hinges on the stages before the transformation begins, which include winning buy-in from key leaders and creating a clear plan to communicate the changes ahead. In addition, transforming the business in phases can be helpful. For example, the company could start with updating financial systems, then move to other areas, such as distribution, once the first is well underway. The following can be used as a high-level guide for ensuring effective transformations.

• Win executive buy-in first: without a C-suite champion for the changes, the project might wither on the vine or lack the support and visibility needed to pull it off.

• Gain broader leadership support: although leaders sign off on the funds to initiate the project, true digital transformation won’t happen without the drive and excitement from leadership throughout the entire organisation. 

• Prepare the path with a culture of change: internal communication around digital transformation is critical. Be sure to secure the perspective of employees on the front lines and share the vision and goals of the changes. In addition, discuss how the changes will benefit the organisation as well as deliver on specific employee needs.

• Preview the changes ahead: explain that beyond using new tools or processes, digital transformation will change the way a company manages data, how it sets and reaches goals, and ultimately how decisions are made. Establish that the transformation will usher in a new approach to work, individually and collectively. 

• Synchronise records, data sources, and systems: the goal of digital transformation is to streamline operations and communications. If an organisation comes through the process with data silos intact, then it has missed one of the larger benefits of the process.

• Make consistent enhancements: technology is always evolving, meaning IT leaders must regularly integrate new capabilities to future-proof the company. After initial implementation, the company may also learn what they want to tweak or adapt to better suit their needs. Having flexibility to do so will ensure the transformation is customised to the company’s evolving needs.

The idea of an overnight, effortless digital transformation does not exist. To truly transform, companies must consider the process as a shift in the way the company works. To do that, the transformation will require a whole-hearted approach that drives interest and buy-in for the project at every level. 

Leadership support from the outset will provide the foundation and vision for the work ahead, while obtaining input from employees who will be using the new systems and technologies can inform the changes as well as how and when implementation unfolds. This will impact how well the new approach is adopted and how it drives employee satisfaction at the same time. Companies that see digital transformation as an ongoing process of reimagining their business will reap its full benefits and be well positioned to succeed in the marketplaces of tomorrow.  

Jon Roskill is CEO at Acumatica