Creating a Successful Digital Transformation Strategy

Success in today’s high-tech world demands that businesses keep their digital strategies current. Global spending on digital transformation reflects this reality, with companies increasing their investments from $0.96T in 2017 to $1.85T in 2022. Looking ahead, spending on digital transformation is predicted to increase to a massive $3.9T by 2027.

Companies are increasing their digital transformation efforts across the board. But how? And what does an effective digital transformation strategy look like?

We’ll explain everything you need to know to strategize your own digital transformation, from a basic framework to best practices for implementation.

The basics of digital transformation

 Digital transformation is a strategic approach to leveraging technology across all business areas, from customer-facing platforms to backend operations and IT infrastructure. This includes evolving from a traditionally analog business model to a fully integrated digital system that enhances both external interactions and internal efficiencies.

Depending on the digital maturity of your business, the type of digital transformation strategy that you implement may vary. Regardless of the strategy, the idea is that you are leveraging technology to create new solutions that solve customer challenges while meeting your business goals.

For example, for some enterprise businesses, digital transformation is all about moving to the cloud. For others it’s about adding or optimizing digital channels. Other programs, where digital channels are already well developed, may work to enhance them with additional capabilities based on or powered by the Internet of Things (IoT), artificial intelligence (AI), machine learning (ML), augmented reality or big data.

At the heart of all these ideas is the customer or end user. Every new idea, innovation model, and digital technology solution is created to solve a customer’s problem, enhance the user , and create successful business transactions.

So how do you ensure that the changes you make to your digital transformation will be meaningful for your users?

A successful digital transformation strategy meets customers where they are

Digital transformation strategies can take shape in a number of different ways. You may suspect one aspect of your business is ready for a digital shift, or perhaps your organization realizes it’s time for a big change, but you don’t know how to begin. If you’re not sure where to start, put yourself in your customers’ shoes and think about how your efforts can create a more successful digital experience for them. Start by asking yourself:

• What are my customers’ biggest pain points? Do I know what they are? If not, how can I find out?
• How does the market currently rate and review the experiences that customers have with my business?
• Do users find my company’s experiences easy to use?
• Can customers chat with someone on my website when they need help? Will a new digital solution enhance communication?
• Are our channels optimized for digital payment? Should they be?
• Have I created a personalized experience for each customer?
• Why do I want to implement this new digital tool? Will it positively impact my users?

Digital leaders know the answers to these questions and can pivot their digital transformation strategy when customers’ needs change. As new customer pain points arise, digital-forward companies can quickly and seamlessly go back to their digital innovation tactics and adjust, as necessary.

Assess your digital maturity

Understanding your current digital maturity is crucial to charting a path for transformation. Start by evaluating both your business performance and the IT assets supporting your operations. Metrics allow for feedback from the environment and, if set up correctly, should provide a window into current business health. There are many metrics from sources within business through IT, however, metrics such as traffic, customer engagement, operational efficiency, outage reporting (system availably and uptime), ROI on IT investments and revenue growth are some of the key measures that give insight into your organization’s digital progress. Additionally, assessing your IT infrastructure—including cloud capabilities, network architecture, and legacy systems—will reveal where optimization efforts are needed to support future digital initiatives.

As you assess, it’s also important to factor in IT modernization. This involves updating outdated systems, migrating to the cloud, and incorporating scalable and flexible technologies that align with business goals. Tools like Google Analytics, CRM platforms, and business intelligence solutions can help analyze performance and pinpoint areas where your digital and IT assets can be optimized for better alignment with your evolving business objectives.

A competitive analysis is a valuable next step. Benchmark your digital maturity against industry peers to identify where others have modernized more effectively, particularly in areas like IT infrastructure, digital channels, or emerging technologies like AI and machine learning. This analysis can help highlight gaps in your IT strategy and provide actionable insights for improvement, enabling you to not only match but exceed industry standards.

Incorporating IT modernization into your digital maturity assessment ensures that your transformation journey is holistic — integrating both business and technology advancements for sustained growth and innovation.

Lay the groundwork for digital transformation: create a transformation roadmap

Now that you’ve defined your digital transformation goals and assessed the maturity of your digital program, it’s time to create a roadmap. A roadmap is a key part of digital transformation and while we could write a separate book on the process, we’ll share an overview here.

Always begin by defining your scope and objectives. Be aware of “boiling the ocean” and focus on priorities and manageable scope. Within the prioritized and focus area(s) identifying the key areas of the business that will be impacted and engaging with stakeholders across the organization to gather input. It’s important early on to make sure that your plan meets the most pressing needs and opportunities of your customers and internal stakeholders. Clearly defined objectives provide a foundation for the roadmap and guide decision-making throughout the project.

The next phase involves conducting a gap analysis to understand the current state of the organization compared to the desired future state. This analysis helps identify the specific capabilities, technologies, and processes that need to be developed or enhanced. It also highlights potential barriers and risks that could impede progress. The insights gained from the gap analysis inform the prioritization of initiatives and projects. It’s important to consider both short-term wins and long-term strategic goals when prioritizing efforts, ensuring that the roadmap delivers value at different stages of the transformation journey.

With a clear understanding of the gaps and priorities, the focus shifts to developing detailed plans and timelines. This involves defining the key milestones, deliverables, and dependencies for each project. A well-structured timeline helps manage resources effectively and ensures that projects are completed on time. It’s also essential to establish governance structures, such as steering committees or project management offices, to oversee the implementation and provide guidance. Regular progress reviews and adjustments to the roadmap are necessary to keep the project on track and responsive to changing circumstances.

Finally, the roadmap should include ongoing measurement. Defining key performance indicators (KPIs) for each initiative allows the organization to track progress and measure success. Building a culture of continuous improvement and adaptability is crucial, as digital transformation is an ongoing process that requires constant refinement.

Before implementing your roadmap, consider your brand experience

Before your roadmap can be considered final, you must ensure that changes to both customer-facing experiences and backend operations align with the values and vision that define your company. Adding new technologies offers opportunities not only to enhance customer interactions but also to modernize internal systems, improve operational efficiencies, and support staff in delivering a better overall service. However, it’s important to pace your changes to avoid violating company principles and alienating users.

One of the more obvious ways this problem can emerge is becoming a feature factory, meaning you add features without thoroughly considering the why behind them. The slow buildup of extra tools and capabilities can be costly to maintain and can negatively impact your user experience. Even if you manage to avoid impacts to costs, users might gradually abandon your brand due to frustration with their experience.

Preparing for launch: drive adoption of your digital transformation strategy across your organization

As you prepare to integrate new tools and solutions, you’ll need to coordinate between teams and make sure every institutional stakeholder is aligned. In practice, that means gauging staff (and maybe contractor) interests concerning new or potential functionalities. Conduct surveys and make sure you’ve addressed their wants and concerns in some way. For your digital transformation strategy to work, employees need to be on board at all stages of the process, especially the early ones.

Employee engagement and enablement is crucial for the success of just about every digital transformation effort, both on the customer-facing side and behind the scenes. Focus on reskilling employees before and during transformation. Ongoing employee enablement efforts should include:

• Identifying and addressing top concerns about new digital technologies
• Conducting cross-functional training to enable inter-department synergy
• Providing incentives and recognition for adoption
• Investing in effective learning platforms that enable self-guided education
• Offering continuous feedback to staff as they adjust to new responsibilities

As your company incorporates strategic digital solutions, you’ll need to ensure your workforce can contribute and benefit from the transformation.

Digital transformation change management: accept constant change and adapt accordingly

Perhaps the most important element of keeping up with or staying ahead of new technologies is practicing digital transformation change management. This is a strategic approach to accounting for, monitoring, implementing, and responding responsibly to changes.

Change is inevitable in a business context, especially when it comes to technology. Rather than resist change, you should be agile and ready to adapt to changes as they happen, mapping out the knowns and unknowns so that your organization minimizes surprises. The only un-changing reality is change itself.

Monitor and evaluate your digital transformation strategy for transformative impact

A key part of transforming a business digitally is measuring the impacts you’re creating and then iterating on your strategy based on feedback and results. To that end, you’ll need to establish key performance indicators (KPIs) that illustrate success (or failure).

Like integrating new technologies, this is another area where industry-specific concerns can and should shape the metrics you use. For example, in insurance, you might get the most mileage from measuring average transaction times. But in eCommerce, cart abandonment might matter more.

So, rather than specifying a set of KPIs that all businesses should use, we suggest planning for how to generate and operationalize KPIs that work for you.

One of the best ways to accomplish this is to work with an experienced partner.

Pick the right digital transformation consulting partner

The final consideration for staying ahead of the curve with ongoing innovation is selecting the right digital transformation solutions company to partner with you throughout your transformative journey.

To that effect, some of the qualities you should seek out in an advisor include:

• Customer obsession: The most successful companies of the past three decades have been obsessed with their customers’ wants and needs. An effective digital transformation consulting partner will help you tap into that mentality.
• Expertise in digital strategy development: A successful digital transformation strategy often begins with envisioning a “North Star” that will guide your focus and decisions. A strong partner will help you conceptualize, strategize toward, and realize this goal.
• Security and stability: A great partner will also help you achieve your goals while staying compliant with applicable regulations, both industry-specific (e.g., HIPAA) and based on where your client base is located (e.g., GDPR).
• Technical prowess: Your ideal digital transformation consulting partner should also have a history of successful digital integration and implementation. Your best bet is an advisor who has helped companies across industrial and business contexts.

Ultimately, digital transformation aligns business digitization strategies with all other operational, mission, and cultural initiatives. It brings your company online in the most real way possible, maximizing productivity, accessibility, and growth.

Get started with your digital transformation

Creating an effective digital transformation strategy is no easy task. It requires accurately assessing where you’re starting from, implementing digital technology strategically, driving adoption across all institutional stakeholders, and measuring (and adjusting) as necessary.

All of those processes are easier to complete and can lead to better results when undertaken with effective support from a digital transformation consulting partner.

Enter Hexaware.

We offer digital transformation consulting to help companies plan for, execute, adjust, and get the most out of their efforts. We’re ready to collaborate with you to future-proof your business with a digital transformation strategy.

To learn more about how we can help, get in touch today!