In today’s increasingly data-driven marketplace, you can’t have innovation without digital transformation (DT).
Take any industry and you’ll find that the market leaders are invariably those who have successfully undergone digital transformation initiatives. To keep up with the competition, you’re likely already considering a digital transformation of your own. But in order to ensure that you’re working toward your objectives as efficiently as possible, it’s critical to understand how DT actually happens, as well as where you currently are in the process.
To help provide rough benchmarks for your digital transformation journey, we’re breaking it down step by step. With this roadmap in hand, you can identify the stage of transformation you’re in and begin outlining what needs to happen next — and the types of leadership, resources, and tech tools that will get you there.
1) Conventional Digitization
In this stage, a business is beginning their digital transformation journey. They are likely taking steps to move away from paperwork and manual processes, but may not yet recognize this as part of a larger transformation. You may be at this stage if you are:
- Relying on a mix of basic automation software and manual workarounds.
- Already using legacy applications with no current plans to change.
- Collecting data, but keeping it separated into channels or in storage.
- Missing KPIs and clear objectives for digital tools.
- Not yet considering a full digital transformation undertaking, but rather modifying individual existing processes.
As illustrated by this step, many businesses are likely already in the beginning stages of digital transformation. Even unconsciously, companies begin setting the foundation for DT when they consider how technology can improve the way their employees work.
This phase is a key entry point for digital transformation. As companies work through this step, they often realize that supplementing existing processes with basic tools is holding back potential innovation and making the business less competitive overall. From here, companies should begin to explore their options to map the best path forward as they consider what full transformation looks like for their business.
2) Siloed Exploration
A natural next step when frustrated by limitations is for individuals or teams within an organization to begin experimenting with new digital systems. Your company may be in this stage if you are:
- Engaging with digital changes, but efforts remain siloed.
- Performing piecemeal testing and evaluation of digital tools.
- Interest is limited to particular teams, departments, or functions and has not yet become an organized, centralized effort.
- Just starting to generate wider interest or concern around digital improvements.
- Figuring out potential opportunities, challenges, pitfalls, and use cases for digital investments.
It’s easy to overlook this stage, but in fact, small groups can often perform less risky and more nimble experimentation than larger teams or the company as a whole. Although these siloed changes don’t yet represent a transformation, these small-scale experiments are invaluable for successfully bringing the business to the next stage in the DT process.
From here, companies should be considering how to be more strategic in unifying their transformation efforts. Priorities from here should involve getting the wider organization on board and beginning to define and formalize transformation efforts.
3) Intentional Strategizing
In this stage, the company has recognized the potential of digital experimentation and is making a coordinated effort to build an overall change strategy. This may describe your company if you are:
- Working to lock down company strategy around digital transformation and allocating resources to grow this initiative.
- Planning strategic investments into the people, processes, and technologies you will need for a full transformation.
- Ensuring C-suite executives and team leaders are on board and educated about the potential of digital transformation.
- Defining your company’s use of data and recognizing data’s fundamental role in the coming transition.
This is a “dream bigger” stage, where those most interested in innovative digital tools work to get others on board and set a strategic foundation for building out digital capabilities. This step is about getting people on board, while the next step is about getting everyone on the same page.
4) Synchronized Efforts
At this point in the digital transformation process, organizational leaders have set the strategic roadmap and made productive investments, enabling teams to collaborate toward defined objectives. You may be in this stage if you are:
- Working well beyond silos, converging digital transformation efforts to develop a new infrastructure model.
- Striving to collect data that provides new insights and finding ways to put this data into action across the organization.
- Identifying and purchasing digital tools, technologies, and platforms that would best suit your objectives.
- Seeing company leadership buy-in across the board and taking the lead in defining what DT will mean for the organization moving forward.
- Supporting the transition with the right components in place — from roles and expertise, to tech tools and processes.
- Unifying all departments across the organization to move toward your new vision.
Individual efforts have given way to collaboration, and numerous teams across the organization have taken deliberate steps toward digital transformation. By this step, the whole company should be enthusiastic about the benefits that DT can bring to the business.
5) Operational Shifts
At this point, the company has made tangible changes, seen shifts in operational efficiency, and produced some quantifiable value for the company. You know you’re at this stage of digital transformation maturity if you are:
- Using sophisticated technologies and tech-enabled protocols, like best-in-class custom software, IoT networks, complex data-gathering tools, and more.
- Operating through unified, dynamic company architectures, allowing the right people to work together seamlessly.
- Largely fulfilling the vision and mission for transformation originally set out by leadership in Step Four (Internal Strategizing).
- Measuring KPIs and achieving goals for organizational efficiency, customer service, and more.
By this stage in the process, the company has implemented digital technologies that give way to new processes and workflows. Models have changed and the business may begin to experience material returns on investment.
6) Transformational Future
The key learning in this phase is that digital transformation is not a destination but a continuous, evolving process. Even if the business has successfully achieved a digital overhaul, leaders need to keep an eye out for further opportunities. You’re piloting the company with a real digital transformation mindset if you are:
- Continuing to stay up-to-date on relevant digital trends and technologies.
- Listening to feedback and fresh ideas from internal stakeholders and team members while responding to customer reactions.
- Fostering and investing in digital expertise throughout the company.
- Considering how to incorporate new digital best practices and tools as they become
- Paying attention to how changing conditions or shifting markets should impact your digital strategy.
- Discovering new revenue streams enabled by new digital practices and transformed operations.
In today’s ever-changing marketplace, your business should always be open to cutting-edge digital technologies that could further improve your processes. At any given point, that could mean considering mobile-first hardware, feature-rich cameras, or IoT sensors that generate new types of data. It could mean implementing custom software platforms that integrate with those new tech tools.
Regardless of the specific technology you’re integrating at any given moment in time, ultimately digital transformation means working toward processes that are best suited to the modern workforce. By following these steps, businesses can begin to redefine standards in their industry and truly lead the pack to stay ahead of the competition.