Emerging digital businesses are reshaping the landscape of many industries, from transportation and hospitality, to construction and manufacturing.
As established companies respond to the pressure to compete with these digital-only companies, they are finding that their enterprise IT organizations also need to evolve both their implementation strategies and core aspects of their cultures.
Fortunately, the models of success used by early adopters often provide blueprints that more established companies can follow to implement their own strategies more quickly and efficiently.
5 Digital Transformation Strategies
Here are five strategies that embody best practices emerging from IT organizations that find themselves on the front lines of bringing today’s digital transformation innovations to their legacy enterprises:
1. Create a Staged Roadmap
By establishing and working against a roadmap with clear milestones, enterprises can achieve early success, while gaining support for their broader digital transformation initiatives. For example, a company wanting to use technology to move customers more easily between products might take an incremental approach, first building a cloud platform to integrate disparate systems, and then using APIs to create innovative new channels for customer interaction.
To support such an evolution, the company might work against a digital transformation roadmap aimed at reaching three horizons:
- Horizon 0: protect existing business capabilities and run them as effectively as possible.
- Horizon 1: incrementally improve existing capabilities.
- Horizon 2: launch digital “moon shots” with the potential to take the business to new heights.
2. Popularize the Proof of Concept
Successful digital transformation initiatives typically start with one project led by a small team, that can serve as a cornerstone for future initiatives. This approach enables project leaders to build confidence in the overall effort by showing concrete results early on.
Notably, successful projects will start with an initial proof of concept (POC) aimed at testing the viability of both the business concept and the technology implementation. Such testing gives teams a quick way to correct any shortcomings before they become stumbling blocks.
In fact, in an agile environment, if the initial POC takes longer than two weeks, it should serve as an alert in and of itself that the team needs to revisit the coding, architecture, supporting technology — and possibly even the overarching business idea. But in the process of revising those inputs, don’t be surprised if your team’s investment in developing a truly viable POC ends up requiring just as much iteration as the entire implementation.
After all, it’s always important to remember that revisiting and revising early assumptions is a vital part of creating a culture that celebrates learning from failure. That’s because many early failures sow the seeds of future innovation, while attempts to build solutions correctly right out the gate can lead people to be overly conservative, thus limiting their creativity.
3. Cultivate the Team
Having the right mindset is critical to engaging in a digital transformation. The active role that fast-moving technologies play in driving digital businesses means that many employees will need to build new skills.
For example, one IT organization moves team members around to demonstrate success and evangelize the new approaches that led to that success. Meanwhile, the CIO at another enterprise might implement an effective strategy for transforming teams by tailoring different approaches to different categories of employees.
In both cases — and others like them — successful organizations rely on individuals with both the skills and motivation to help lead their colleagues in the process of digital transformation. Those organizations then work to change the mindsets of people who have the skills but lack the motivation, as well as build the expertise of motivated team members who currently lack the necessary skills.
4. Create an Internal Open Source Culture
Enterprises can end up stifling innovation and agility when they take protection of source code too far by restricting access to particular teams on particular projects. By contrast, the most successful digital businesses create cultures that adopt aspects of open source culture and techniques.
That’s because by committing to the open sharing of knowledge and experience via source code or APIs, they boost innovation and agility across their organizations’ different teams. They encourage employees outside the core team to make the overall project better by spontaneously contributing new ideas, approaches and solutions. They motivate teams and spur innovation by following the open source model of meritocracy that transparently recognizes people with the best ideas.
5. Use Small Groups to Bring Big Ideas to Market
As companies across industries evolve into digital businesses, they are replacing traditional, hierarchical enterprise IT structures with team structures taken from the playbooks of highly successful tech companies.
Common attributes of these teams — also known as squads or pods — are a common purpose, close relationships with customers, and autonomy in deciding how to accomplish their goals. The best models capitalize on the synergies of mixing technical and business leaders in the pod to empower teams with the knowledge and decision-making mindset and tools to innovate more quickly.
Pioneering Skills and Evolving Models
Digital transformation is a continual journey that touches on every aspect of an organization. Leading-edge IT executives within both new and traditional businesses are pioneering the skills to evolve and support this new model in exciting new ways. IT professionals who incorporate the lessons of these innovators will be well-positioned to support their own organizations’ evolution toward digital business transformation.