Few companies have been committed to digital transformation and now those that haven’t are certainly starting to feel the pain in the digital economy.
To build a digital strategy, you need to build it inside your organisation, not just outside your organisation. It means redefining your company not to be governed or paralysed by the pace of change and technology but to adapt functions to take advantage of the possibility that technology provides.
Before we start on some practical aspects to building your inside-out digital strategy, there are a few fundamentals that need addressing:
1. You will never be successful in transforming an organisation for the digital economy without it being driven from the top. It just won’t ever happen.
2. Work on a compelling vision, with business logic behind it: KPI’s, engagement, governance and don’t sweat the small stuff.
3. Don’t rebuild your organisation; seek to re-model existing processes and functions.
4. This is a management and people program, not an IT-driven one. The technology will do what you need it to do; it’s the people that are most important.
- Employees are collaborating and using social technologies at work and at home, while company policies are archaic and prohibitive and often have not been updated to reflect the digital age.
- Customers have never been more demanding than in this emergent economy and with social media tools at their disposal.
- Pace of business is far faster and creates a pressure to transform the business.
- Significant investments in ERP and CRM systems and other technology get made with only a small proportionate amount of value being driven out of them.
Clearly some companies are transforming their businesses; many are only doing so in part and many are not doing it at all.
Australian retailers are an example of a corporate ignorance of the business critical requirement of a digital transformation strategy. Australian retailers are under fire from new competitors, with Australians shopping with online overseas retailers that invested in digital transformation many years ago.
Also on the competitive front are small dynamic online retailers, who live and breathe digital transformation, embracing low-cost eCommerce solutions, as opposed to the high rents on the high street.
How to build a digital transformation strategy
This is a complex topic, but I can set you in the right direction.
There are three key areas of focus which make up the framework:
- Business model
- Operational process
You must adapt:
- Informed knowledge via analytics and segmentation
- Cross and multichannel experience
- Streamline customer engagement and processes
- Analytics and data
- Modify decision-making systems
- Customer service and self-service
Digital capabilities: governance, policy, training, tools, analytics
Taking a multichannel and technology approach is key to achieving digital transformation while letting the strategic vision drive the technology as opposed to the other way round.
Common implementation challenges:
- Lack of knowledge/fear
- Lack of motivation
- Proving the business case
- Missing skills
- Inflexible process
If you have analysed your strategic assets as recommended in Part 1, you can take this further. What assets do you have covering:
- Sales teams
- Products and content
- Culture and people
- All channels
- Customer information and data
Your asset list should feed into every aspect of the framework above and support it by investment in the digital capabilities platform on which the framework sits.
From here clear KPIs and ROI can be put into a business plan for the organisational transformation program.
The most important ingredient that will underpin all of the above as you transform you and your business for the digital economy: The champion must be from the top of the business, not a bottom up paradigm, who can create and understand the vision. They then must be willing to make the investment required and get the people on side.
Here’s recent McKinsey research for further reading.
Fi Bendall is the managing director of digital and interactive consultancy company Bendalls Group. With over 20 years’ experience, Bendall has worked with global brands including BBC and Virgin, and is an expert in how businesses can approach strategy in the digital world. You can follow her on Twitter at @FiBendall, and can contact her through Bendalls Group.