Managers and employees at organizations embarking on digital transformation projects find themselves having to deal with a mix of conflicting emotions. On the upside, they are eager to undertake a journey to reimagine their organizations’ existing business processes with the potential reward of not only improving customer and employee experiences, but also of realizing cost savings and maximizing business efficiency. However, those same individuals are also understandably nervous about making such a bold move when so many of their peers have struggled to gain success in their digital transformation endeavors.
The majority of digital transformation projects to date have been doomed to failure. Recent research touts figures of anywhere between 70% and 84% for the percentage of unsuccessful endeavors, in other words, digital transformation projects which have not delivered the hoped-for benefits to improve organizations’ business agility and to better serve the needs of both their customers and their own staff.
So, what’s going so badly wrong for so many organizations? Typically, it’s issues created by not having a well thought out stepwise plan and framework in place for the digital transformation project. If you don’t have a strong sense of what you’re trying to do and why and how you plan to get there, how can you successfully gain buy-in for the endeavor from everyone who needs to be involved?
Based on our knowledge of the market and our customers, we’d like to present five best practices to help put fears and concerns to rest so that organizations can approach their digital transformation with greater confidence that they will achieve a positive outcome.
1. Clearly Define the Problem and Set Priorities
At the start of the project, spend a lot of time with representatives from across the company exploring the reasons why you need to transform the current way your organization operates. Then, having agreed upon and established what these problems are, think through how you plan to solve those issues, and then how to prioritize and time the actions you need to take.
The immediate issue at hand for many organizations is how to better engage with customers and provide them with better, more personalized experiences to help ensure customer retention and loyalty. This is where organizations can use sophisticated analytics to mine their own and third-party data to gain valuable insights into customers’ buying behavior and preferences.
However, limiting a digital transformation to improving customer experience is missing the opportunity to rethink all aspects of your business, including the experience you provide your employees, and how you’re harnessing the capabilities of emerging technologies like AI and machine learning to generate a competitive advantage for your organization.
The inherent challenge most organizations are facing is the ongoing reinvention of industries fueled by concepts such as subscription and rental models. This shift may require companies to change their core business from being product-centric to a stronger focus on delivering services. Additionally, with the goal of customer engagement no longer being a one-off product sale, that relationship changes to building more of a long-term partnership with organizations working to ensure customers renew or expand their subscription services.
For some organizations, a digital transformation project can be the first real opportunity to examine the entirety of your organization’s business processes, some of which may have been implemented in haste to meet an immediate need. Now is the time to increase the automation and orchestration of those business processes to both free up employees from more mundane tasks and to realize cost savings.
2. Identify the Metrics for a Successful Project
There are so many ways to describe digital transformation, so part of your internal initiative project preparation should include agreeing upon a specific definition, which makes sense for your organization’s goals. Having that definition in place will also help with another important area to address from the get-go – how you’re going to track the progress of your digital transformation.
Having metrics in place will help you to build internal confidence in your digital transformation project, which isn’t a one-off project, but which is an ongoing endeavor. Thinking about achievable deliverables is a good way to help structure your digital transformation project. Consider your approach and ask yourself: Do I want to start with a single pilot project to experiment with the validity of the concept? This is likely the case should you need a quick win or two as demonstrated by metrics to gain buy-in across your organization for the project.
Some organizations will opt to transform the business processes of a new business unit or the processes relating to one product line, department, or region. Other companies may embark simultaneously on a series of cross-departmental pilots to reinvent business processes. What’s key to keep in mind is not putting all your effort, both time and money, on improving one single area of operations, without also factoring in all the other business processes which feed in and influence that department.
On the other hand, if your initial focus for the project is enterprise-wide from day one, there is an inherent danger that your digital transformation is going to take time to get underway and to show any noticeable improvements. So, carefully review the pros and cons of these different approaches and put in place measurements around your favored approach so you can show how the digital transformation project is generating positive results for your organization.
3. Get Everyone Onboard, Have a Recognizable Leader
To establish a strong foundation for success, any digital transformation requires a leader who takes responsibility for the project and who can clearly communicate the importance and value of the project to everyone within your organization. This leader should head up and be advised by a cross-functional digital transformation team so they can then draw on all aspects of company-wide knowledge and collaboration. Ideally, the digital transformation leader is a member of the C-suite or has a clear mandate and budget from your organization’s management team.
With digital transformation being an ongoing project, individual employees may not see direct benefits to their specific business area immediately. That’s why it’s so important that you have a public face for your project, someone who can share the “big picture” vision for digital transformation as well as the road map and timeline of how and when improvements to business processes will occur.
As business processes are reimagined, employees’ roles will also evolve, so it’s vital that your digital transformation leader is also making available any required training or upskilling to staff as and when they need that access.
4. Emphasize Flexibility Since Your Destination is Uncertain
It’s important when laying out the road map and metrics for your digital transformation, that you also include the element of uncertainty or the potential derailment of your existing plans. Think of it as factoring in any potential bumps in the road ahead. Make sure that your initial digital transformation conversations address a variety of what-if scenarios, particularly as they relate to the impact of moves by third parties. Encourage staff to share what keeps them up at night about ensuring the continued survival and thriving of your organization.
External forces may mean you need to tweak or more substantively change the direction and focus of your digital transformation project. For instance, customer buying patterns may shift significantly, new entrants may enter your market with disruptive business models or brand-new products and services, or existing competitors may combine forces and present much more of a threat through mergers and acquisitions.
5. Choose Your Digital Transformation Software ‘Vehicle’ and Guides Carefully
As you’re evaluating which technologies to use to effect your digital transformation, think about what set-up will be most important to your organization. For instance, consider if you want to do the majority of your work relying on a single vendor’s technology rather than trying to deal with a mix of point solutions from different vendors.
Are you looking for a digital transformation software “vehicle” that may have more miles on the clock, but which is tried and tested, secure, and reliable versus one that may be newer, but less dependable? When comparing different software vendors and their solutions, ask them for customer references who have already achieved some digital transformation successes and also look at how the software vendors are handling their own digital transformations.
Take advantage of third-party guides who have significant prior experience in digital transformation. So, along with peers who can share their best-practice advice and lessons learned, talk with analysts and consultants who’ve been involved in successful projects.
Customer onboarding is a key aspect of any digital transformation project. The outcome is to create an easy, informative, and highly relevant experience for new customers, while also streamlining back-end processes to be more cost-effective and simple to replicate across multiple delivery channels.
Healthcare insurance company nib, which serves over 1.5 million customers in Australia and New Zealand, is keenly aware of how critical the first 30 days of a new customer engagement can be when churn levels may be high due to the ease of switching plans. Nib has successfully implemented OpenText Exstream solutions to reimagine how it communicates with customers, introducing personalization and responsive design as well as boosting the solution’s scalability and flexibility.
“The speed at which we can now make and deploy changes to customer communications allows us to quickly address feedback and insight that we are receiving from our customers and internal teams,” said Glenn Moore, head of core applications delivery, at nib. “Internal and customer feedback makes it clear that we have achieved a better customer experience.”
Apply the Right Combination of People, Process, and Technology
What we’ve laid out here are steps to help ensure you have the optimal mix of people, process, and technologies in place to realize success with your digital transformation project. OpenText has made significant investments in our customer experience platform to help organizations understand the customer at a new level and drive digital transformation across the enterprise.
As we’ve stressed, digital transformation is an ongoing endeavor to continually refine business process and orchestration with the goal of achieving higher levels of customer and employee satisfaction, lowering costs, and cementing your organization’s position as an agile and innovative market leader.