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How To Execute Digital Transformation

Oct 26, 2023 Rory Traynor Updated On: January 24, 2024
How To Execute Digital Transformation

Digital transformation is top of the agenda for many company directors, with over 50% of European companies holding it as one of their chief priorities according to a recent study by the European Investment Bank

Digital transformation is not a new idea and was starting to become somewhat of a buzzword before COVID-19, but since the pandemic, it is now something that many consider essential not just to a company’s success but to its survival.

Not only has the pandemic changed consumer buying habits, with a huge rise in not just online shopping but in the delivery of services (e.g. online fitness classes), it has also altered how employees wish to work and rendered previously effective business processes redundant. As companies rush to embrace the digital revolution and transform into the businesses of tomorrow, many directors are struggling not just with how to start and enact digital transformation, but also with deciding what to change.

What is digital transformation?

Digital transformation is a term that is commonly thrown around and has become somewhat of a catchall term. This is largely because digital transformation is a broad process that takes place across the entirety of a business, at every level, especially leadership. It is the process of a business changing how it employs digital technologies, strategies and individuals throughout every level and department, to work more efficiently, effectively and profitably.

The transformation is not just technological but also cultural. Businesses that are adopting digital transformation must challenge their existing processes, procedures and business model - top-level leadership must commit to encouraging and enacting innovation on an ongoing basis.

As such, digital transformation is a continuous process that will be made of many individual transformation projects. 

How to enact digital transformation

What digital transformation looks like exactly will vary from company to company and, as mentioned above, is a constant process made up of many smaller projects, each of which will bring about changes. Ultimately, the first step is for a company’s leadership to commit to digital transformation, not just as a project but as a fundamental change to their company’s culture and business model. After that, individual projects can generally be executed in five steps.

  1. Identification
  2. Consultation
  3. Research and Investigation
  4. Implementation
  5. Operation and innovation

The five steps 

1) Identification

Each digital transformation project should start with one of three things:

  • A problem statement e.g. Our client onboarding takes too long
  • A clear opportunity e.g. Access new customers via introducing digital channels
  • A goal e.g. Reduce costs by streamlining and consolidating software used by the company

Once the issue/opportunity/goal has been identified, senior leaders must then consider what digital transformation means in that context e.g. does a process need to be automated, do employees need additional software to maximise performance? Leaders should then brainstorm possible solutions and avenues to be investigated. 

2) Consultation

 To be successful, digital transformation initiatives need to be not only effective but adopted and supported by staff. Those leading a project should consult with staff to identify pain points and areas which could be improved and to listen to their ideas on how they can be solved or improved. 

All staff members from departments that will be directly affected should be included in the consultation step, as they bring direct experience and expertise, but avenues should exist for any other staff member to submit suggestions and ideas. 

As innovation is a cornerstone in the overall digital transformation of a business, actively consulting staff and creating avenues for them to submit their ideas should take place outside of any individual project and form part of the cultural shift of the company’s management. 

3) Research and Investigation

Once possible improvements and solutions have been identified then how they might be solved and if there is an existing technology that can do this needs to be researched and investigated. If off-the-shelf solutions exist these need to be investigated and the most suitable identified. If a solution does not exist as a pre-existing product then an investigation should turn to whether it can be created, either by an internal development team or a third-party company. Sometimes what is needed is simply a change to internal processes, rather than any new technology. In that case, review how the process could be adjusted. 

4) Implementation

Once a new software and/or process has been decided on then it needs to be implemented. This is not as simple as just deploying it - staff need adequate training, both before the change and on an ongoing basis.

The key to the success of implementing a new solution is staff adoption and buy-in. Resources should be allocated to support staff with the transition, and the advantages and reasons for the change should be explained to them. If you are introducing new software, most providers will have programs and resources dedicated to this, these should be leveraged where possible.

5) Operation, Monitoring and Innovation

Once the solution has been successfully implemented and is part of your normal business process, then its performance needs to be monitored. Leaders should watch for if it achieved the desired results and if there have been any unexpected benefits.  

Continued innovation is an essential part of digital transformation and leaders should consider if there are ways to improve on the solution, if other areas of the business could benefit or if it has created new opportunities. They should also consult with employees for their thoughts on this. 

Transformation is a mindset

By following these steps, you will be able to successfully drive and execute digital transformation throughout your company, however, it is an ongoing process that relies on the human as much as the technological. Leaders need to buy into the idea that modern solutions provide new ways of doing business and that those who do not innovate and adapt will quickly be left behind. 

Companies need to leverage the expertise of their staff and create a culture where staff are encouraged to share their ideas and leaders actually consider them. They will also need to be willing to question every part of the business, and even the various ways business is done, and constantly consider how improvements can be made.

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Published by Rory Traynor October 26, 2023

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