The Digital Transformation Roadmap Part 3 -Setting Priorities in Digital Transformation & Picking the Problems That Matter Most

In our last two articles, we explored the foundations of digital transformation (DX), including the importance of having a clear, shared vision. Once that vision is in place, the next step is to start prioritizing your digital transformation efforts. But with so many potential projects and technologies available, how do you know where to begin? How do you pick the right battles?

In The Digital Transformation Roadmap, David L. Rogers emphasizes that digital transformation is not about doing everything at once. It's about focusing on the initiatives that align most closely with your business strategy and deliver the most value. In this article, we’ll explore how successful organizations set priorities and choose the right problems to solve, all while staying agile and adaptable to change. Throughout, we’ll incorporate real-world examples to illustrate these principles in action.

The Risk of Doing Too Much

One of the most common mistakes organizations make during digital transformation is spreading their resources too thin. With so many new technologies available—artificial intelligence, blockchain, cloud computing, and the Internet of Things—there’s a temptation to dive into all of them at once. However, this approach often leads to failure. As Rogers points out, the key to success lies in prioritization.

Let’s consider the case of General Electric (GE). In the early 2010s, GE embarked on a massive digital transformation under then-CEO Jeff Immelt. The company aimed to become a leader in industrial software while maintaining its dominance in traditional industries like aviation and healthcare. GE invested billions in developing software platforms, analytics, and IoT technologies. However, by trying to tackle too many initiatives simultaneously, GE found itself overstretched. Its digital transformation initiatives ultimately failed to deliver the expected results, and the company had to scale back significantly.

This example highlights the danger of trying to do everything at once. Even large, well-resourced companies like GE must prioritize. When digital initiatives lack focus, resources are diluted, and the impact is diminished.

Aligning with Business Strategy

A successful digital transformation must always be aligned with your organization’s strategic goals. Every digital initiative should support the broader objectives of your business, whether it’s improving customer experience, driving operational efficiency, or fostering innovation. This alignment ensures that digital efforts are contributing to long-term business success rather than being isolated technology projects.

Take Amazon, for example. The company’s digital transformation efforts have always been tightly aligned with its core business strategy: enhancing customer experience. One of Amazon’s early innovations was its one-click ordering system, which streamlined the purchasing process for customers. Later, Amazon introduced personalized recommendations based on customers’ browsing and purchasing histories. These initiatives weren’t driven by technology for technology’s sake; they were designed to meet the strategic goal of making shopping easier and more personalized for customers.

By aligning its digital initiatives with its business strategy, Amazon was able to deliver tangible value to its customers while simultaneously driving revenue growth.

Delivering Tangible Value

A key principle in setting priorities is focusing on initiatives that will deliver measurable value, both in the short and long term. Organizations that can show early wins are more likely to build momentum and gain support for further digital initiatives.

Consider Domino’s Pizza. In the early 2010s, Domino’s was struggling, with its brand and product seen as inferior to competitors. However, the company undertook a digital transformation that prioritized customer experience. One of its key initiatives was the development of a digital ordering platform and the introduction of the "Domino’s Tracker" app, which allowed customers to track their orders in real-time. This innovation had an immediate and tangible impact: online orders skyrocketed, and customer satisfaction improved. Domino’s focus on delivering value through digital technology helped the company regain market share and grow its brand.

This is a perfect example of how digital transformation can deliver tangible results when prioritized correctly. By addressing customer pain points and focusing on initiatives that had a clear impact on revenue, Domino’s was able to turn its business around.

Balancing Feasibility and Impact

While it’s important to aim for high-impact digital initiatives, it’s equally crucial to balance these ambitions with feasibility. Not every idea can be implemented immediately, and some initiatives may require significant changes to processes, technology, or organizational structure.

Ford’s initial attempts at digital transformation provide a valuable lesson here. When Ford first introduced connected car technologies, it struggled to manage the technical complexities and high costs associated with these innovations. Ford realized that it needed to start smaller, focusing on more feasible projects such as upgrading in-car connectivity and developing user-friendly apps. By scaling down its initial ambitions and focusing on feasible initiatives, Ford was able to lay the groundwork for more complex digital projects in the future.

The lesson is clear: while high-impact projects are essential, they must be balanced with what’s achievable in the near term. Starting with smaller, feasible initiatives can create a foundation for more ambitious digital transformations down the line.

Focusing on Customer Needs

Digital transformation isn’t just about improving internal operations; it’s also about creating better experiences for your customers. Understanding and addressing customer pain points should be a key factor when prioritizing digital initiatives.

Starbucks offers a great example of this customer-centric approach. Early on, Starbucks identified that its mobile ordering system was causing in-store congestion and long wait times, leading to customer dissatisfaction. In response, Starbucks refined its mobile app, introducing features like order scheduling and curbside pickup. These innovations directly addressed customer pain points, resulting in higher satisfaction and increased digital engagement. Starbucks didn’t focus on the technology itself but on how it could use technology to improve the customer experience.

When picking problems to solve, always ask yourself: How will this initiative make things better for our customers? By addressing customer needs, digital initiatives can have a lasting impact and help to strengthen the relationship between the company and its consumers.

Evaluating the Potential Impact

Not all problems are worth solving, even if they seem pressing. It’s essential to evaluate the potential impact of each problem before investing in a solution. Rogers suggests asking questions such as:

• How will solving this problem contribute to business growth?
• Will it improve efficiency, reduce costs, or increase customer satisfaction?
• Will the benefits outweigh the costs of solving this problem?

Netflix offers a great example of focusing on high-impact digital solutions. The company’s use of data-driven personalization—recommending content based on viewing history—has been a key driver of its success. This initiative wasn’t just about improving the user interface; it was about creating a more personalized experience that kept viewers engaged and retained more customers. Netflix understood that solving the right problem—improving user retention through personalization—would have a massive impact on its business.

Prioritizing Innovation

Finally, while solving current problems is essential, digital transformation also presents an opportunity to innovate. It’s important to look for new ways to create value, whether that’s through new products, services, or business models. Companies that prioritize innovation during their digital transformation are often the ones that stay ahead of the competition.

Tesla provides an excellent example of this forward-thinking approach. Rather than just improving existing processes, Tesla introduced over-the-air software updates for its vehicles. This innovation allowed Tesla customers to receive new features and bug fixes without having to visit a service center. By prioritizing innovation, Tesla didn’t just solve current problems—it created a new way of delivering value to customers, setting a new standard in the automotive industry.

Conclusion

In this third article, we’ve explored how organizations can set priorities in digital transformation and choose the problems that matter most. As we’ve seen from examples like Amazon, Domino’s, and Tesla, successful digital transformation isn’t about doing everything at once. It’s about aligning digital initiatives with strategic goals, delivering tangible value, and balancing impact with feasibility. By focusing on the most critical problems—especially those that improve customer experience—organizations can ensure their digital transformation efforts deliver meaningful results.

In the next article, we’ll explore how to manage growth at scale and structure governance to support digital innovation. Stay tuned as we continue our journey into the world of digital transformation.

The concepts and frameworks discussed in this article are based on David L. Rogers’ book, The Digital Transformation Roadmap. Links:

• Buy the book on Amazon
• Subscribe to the author’s newsletter