Why and how to plan your Digital Transformation

This 7-minute read defines the key drivers of digital transformation impacting business and why companies must transform their operations to the rapidly accelerating digital landscape.?It provides a framework for understanding the components of a successful digital transformation and a guide to plan and sequence your own transformation effort.?This post is relevant for all business types.

1. Why is Digital Transformation (DT) necessary?

Digital forces are rapidly evolving across all facets of product, price, place, and promotion.?Companies who adopt a customer-centric business model that leverages digital tools and processes can better capitalize on increased reach and efficiencies to win in the marketplace.?Successful DT’s in retail include Walmart’s investments in data analytics and online sales that led to supply chain efficiencies and $524BN revenue generated online in 2020 (up 74% from prior year).?At the same, niche players like Harry’s Inc shaving club is taking on industry goliaths with a customer-centric online model that is now expanding to brick and mortar stores.??Polaroid, Blockbuster and Xerox are examples of companies who failed to evolve.?

2. The Digital Transformation Drivers

At its core, DT forces organizations to reengineer themselves to best support the customer/stakeholder.?Just look at how (then upstart) Geico disrupted the insurance industry by reorganizing their business to provide a faster quote (first days now minutes).?But let’s go deeper into the underlying tactical and reputational drivers accelerating this shift to customer centricity.?

2.1 Tactical Drivers: Tactical drivers are easier to recognize and address and can be an excellent starting point for an organization looking to make measurable progress. ?By setting meaningful time/cost/volume based KPIs, the organization can demonstrate progress and generate buy-in quickly.?

• Speed: The most immediate and pervasive driver, digital accelerates all aspects of business.?From supply chain to consumer click behavior and feedback, information on every aspect of the value chain is captured, processed, and generates automated responses in seconds.?While this seems like a dream come true, it brings new challenges as organizations struggle to keep up with the pace of technological advancement.?Scott Brinker of Hubspot has termed this martech’s law, where technology changes at an exponential while organizations change at a logarithmic.?This creates a risk for companies to over-extend themselves on costly tools too complex for existing staff and processes.
• Scale: Digital allows organizations of any size to achieve incredible scale.?Services like Squarespace, AWS, Chimpmail, Stripe, Google Analytics, Shipmonk, and others make it possible to go from 0 to millions of customers without an IT, ops, or fulfillment team.?Digital provides a global storefront and access to massive communities like Amazon Sellers and Sony Playstation, as well as crowd and open source tools and data.
• Data: All these transactions create massive amounts of data.?This data is created and used by the ever more automated production, financial, marketing and service functions.?It also is the required fuel to power more advanced tools like AI, Machine Learning and Robotic Process Automation that are already creating hyperbolic scaling opportunities. ???

2.2 Reputational Drivers: As a result of massive increases in speed, scale and available data, organizations are thrust into an “always watching” world stage and are forced to build competencies and safeguards to ensure they manage reputation with customers, shareholders, suppliers and employees.

• Transparency: The unfettered ability to access and provide data has eliminated the ability for companies to control their own narrative. Customers, employees, investors, all have incredible access to the inner workings, successes and failures. ?
• Accountability: A direct result of the combined effect of increased speed, scale and transparency, digital has changed business accountability forever. Price comparisons, customer reviews, supply chain sustainability rankings, employee reviews, and social channels. Lone influencers change entire product lines, as government and industry regulations reach from supplychain to customer to landfill.

2.3 Business Impacts of Digital Transformation: ?Combine the tactical and reputational drivers together and the impact to organizations and industries is profound.?Across fields as diverse as sports, art, healthcare, education, ?organizations must reorganize their people, process & technology to the new “Customer Centric” Reality.

3. The Digital Transformation Framework

I know what you are thinking.?“Like the world needs another framework…?”?Let me explain why there may be room for one more.?While it’s easy to purchase a new CRM, web, email, or marketing automation platform, it’s infinitely harder to establish the processes, skills and ways of working needed to effectively deploy them effectively in the evolving marketplace and technology stack.?

Enter the DT Framework, a visual guide to many of the capabilities required in recommended sequence.?While encouraging customization to specific organizational needs, the framework forces the following:

• Prioritization: You can’t have everything, where would you put it??Organizations should take George Carlin’s sage advice and define the top priorities to focus on.?
• Alignment: Ensure alignment across the organization and recognize adjacencies and support functions required to deliver on key objectives.?Use process maps and maturity curves to determine how support functions like IT, customer support and finance must also adapt.
• Sequencing: With full understanding of foundational processes and capabilities required, adjust your plan to accommodate for the time and resources needed to enable the larger transformation effort.
• Sustainability: The foundational capabilities built/enhanced during the transformation act ensure the improvements persist.

4. How to use the DT Framework:

Step 1: Conduct an internal digital readiness assessment and customer journey mapping effort help to articulate the “current” and “future” states and define:

·???????Your future state products, services & experiences to deliver

·???????The level or readiness/maturity of current people, processes and technologies to deliver future state

·???????The scope, length and sequence of the digital transformation effort

Step 2: Plan (“Go Slow to Go Fast”)

One of the biggest reasons DT efforts fail to achieve long term objectives is the tendency to jump into solving known issues without spending enough time planning a longer-term roadmap.?Just as NASA needs to sort out the logistics, landing and rescue support before launching a space mission, organizations must establish solid request management, data and platform governance, project management and training capabilities in advance / parallel of the actual transformation workstreams.

To address these issues I recommend using sequencing and stage gating to ensure your plan remains agile and responsive.

Step 3: Sequence your Digital Transformation Initiative: If you are just starting your DT effort, the following sequence is recommended.?If you are farther along on your DT journey, consider any steps you may need to catch up on.?

1. Establish PMO & Governance
2. Assessment & Journey mapping
3. Define Objectives, Gaps & Opportunities
4. Create Roadmap.?Define Stage gates and sequencing
5. Establish/Enhance Foundational Capabilities (as needed)
6. Launch Transformational Workstreams – these are the specific projects the deliver on the project objectives.?They are unique to your organization and often include new platforms, processes and team structures.

Step 4: Define Stage Gates: Sequencing's sister, stage gating ensures required capabilities are accomplished before the dependent workstream can proceed.?This reduces mistakes and burnout and allows team members the space to truly master required foundational skills before taking on higher stakes elements like low-code development.?

For example, an internal team learns about a cool 3rd party website or SEO optimization service and asks their IT team to research and onboard them.?To initiate work on this request, a relevant stage gate behavior requirement could be that the marketing and social team members are familiar with Google Analytics, including basic reports, priority pages and CTA actions and able to define the requirements /outcomes they are looking to solve with the optimization service.?

From here it's up to the organization to continue to iterate on the capabilities and processes necessary to deliver on the strategic objectives Hopefully the reader has deeper insights into why digital transformation is important and how speed, scale, data, transparency and accountability are impacting their own business.?Further, the reader can appreciate the “go slow to go fast” mentality and the importance of planning, sequencing, and stage gating to ensure foundational elements are in place to support the transformation objectives.?I recommend Scott Brinker’s Hacking Marketing for a deeper look at transforming the marketing function. ?

Would love your feedback! Im considering putting time into a more detailed look at each section of the framework, perhaps a book.?Let me know your thoughts by commenting, sharing, or coming back for future entries.?