In today’s fast-paced business environment, digital transformation is no longer an option. For companies that want to stay competitive and agile, making the transition to digital operations is a necessity.
But digitalizing operations is no easy feat. It goes beyond implementing new technologies. If you want to succeed, you require a strategic, organization-wide shift across several realms: processes, culture, and skills.
How to go about it? With the five steps described in this guide, you can lay a solid foundation.
1. Flesh out a hands-on digital strategy
Every successful digital transformation starts with a clear and actionable digital strategy. Adopting the latest technologies is part of it, but it doesn’t stop there. A solid strategy helps align technological initiatives with business goals to create value.
Here’s a step-by-step plan that will get you off to a flying start:
· Step 1. Define a digital vision
How do digital trends impact your industry? Make sure you can answer that question, and identify key opportunities. For example, consider how digital solutions can help tackle your biggest challenges or enable new business models.
· Step 2. Set target states
Translate a high-level digital vision into concrete target states that represent clear milestones on your journey to full digitalization (for example, you can define what your organization looks like two, four, and six years down the road). These should cover end-to-end processes, IT architecture, data management, and organizational structures. Make sure you include all aspects and create an integrated view of them:
o Process: What will the new process look like?
o IT: Which applications will we update?
o Data: What data will we capture?
o Organization: How will the organization change?
· Step 3. Create a digital roadmap
Break down the digital vision into a series of actionable steps. Prioritize these based on their potential impact and strategic alignment. This roadmap should guide your teams on what to implement when and how to go about it.
2. Organize your digital transformation around value streams
Make sure you organize your digital transformation around value streams rather than traditional departmental silos. That way, all the teams involved are aligned with creating value for the end customer.
Next, break down your overarching ambition into subgoals, creating chunks that are small enough for a single team to work on. Let’s illustrate this with an example. Suppose one of your business goals is to improve your operational output. In that case, it would make sense to set up your subgoals as follows:
· Overall goal: to increase output by 50% in 2030.
o Subgoal 1: to increase capacity by 20% by hiring 200 FTE.
o Subgoal 2: to increase utilization by 10% by improving planning.
o Subgoal 3: to reduce the overall process time by 20%. This could mean team 1 automates the order intake process, team 2 reduces engineering time by 40%, and so on.
3. Drive transformation through a joining of forces
Multidisciplinary teams are the engines of digital transformation. They bring together a diverse range of expertise and enable agile, cross-functional collaboration.
There are several things you can do to make these teams successful:
· Assemble multifunctional change teams
If you know the scope of your organization, processes, IT, and data, you can adopt an integrated view when developing solutions. The latter isn’t possible if a team only consists of, for example, application developers or data scientists.
· Make sure competence development and resources are centrally organized
This helps ensure both competence development and flexible resource allocation.
· Allow teams to be autonomous
Teams that independently work towards their goals can make fast decisions. By allowing for autonomous teams, you’ll accelerate progress and foster innovations and ownership.
4. Embed ‘digital’ in your culture
Digitalization is as much about culture as it is about technology. If you want digital operations to thrive, create a culture that embraces change, innovation, and continuous improvement.
Here are two concrete steps you can take:
· Step 1. Have leaders commit
Make sure leaders at all levels are committed to the digital transformation journey. Their digital behaviors set an example for employees, so they should champion the change you’re implementing across the organization.
· Step 2. Foster an agile mindset across teams
Encourage people to experiment, learn from failures, and improve using an iterative approach. If you want to sustain momentum and achieve long-term success, this cultural shift is critical.
5. Measure and work in iterations
Only through continuous measurement and iteration, you can ensure your digital transformation stays on track and delivers the desired results. No matter your approach, make sure to include the following two elements:
· Key Performance Indicators (KPIs)
Develop KPIs that align with your digital goals. These should measure your digital initiatives’ progress and their impact on the overall business.
· Continuous feedback loops
Implement mechanisms for regular feedback and review. These allow for quick adjustments to strategies and ensure the transformation stays aligned with evolving business needs.
Digital excellence: an ongoing journey
Digitalizing operations is a complex, multi-faceted endeavor. It requires careful planning, strategic implementation, and commitment to continuous improvement.
To successfully navigate the challenges of digital transformation and unlock significant business value, follow the steps outlined in this blog post.
And remember, the journey to digital excellence is an ongoing one. So, stay agile, keep learning, and be ready to adapt to new technologies and opportunities as they emerge.
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