What is Digital Transformation Success and How Do You Maximize It?

by Jack Calhoun, on Dec 14, 2021 1:45:38 PM

70 percent of survey respondents said that their companies either have a digital transformation strategy in place or are working on one. The urgency for understanding and implementing the digital transformation essentials is a rapidly growing priority among C-suite teams and leadership globally.

The Retail Industry During the Pandemic: A Recent Example of Digital Transformation Success

As shoppers sat at home through the doldrums of the COVID-19 pandemic, many brick-and-mortar retail stores struggled maintaining their relevance with their customer base, while digital native retailers thrived.

To keep pace with customer demands, traditional retailers have had to accelerate their digital transformation initiatives, offering better customer experiences from a distance. Demand for implementing e-commerce tools like product catalogues and digital shopping carts to improve customer experience is at an all-time high. As these customer experience initiatives are being flooded with funding, choosing the right platform to support business trends is critical.

It is important that companies maintain their focus on communication, branding, and revenue as they work to scale their e-commerce offerings. In the graph below from the US Department of Commerce and Bank of America, you can see that over the past 10 years, retail sales in the US have been steadily increasing, but in the span of 8 weeks in early 2020, we experienced almost as much growth as the prior decade.

US Ecommerce penetration

Figure 1: E-commerce Penetration across the US, 2009-2020

This exploding demand has propelled the digital transformation of the retail industry and intensified the challenge of competing with industry powerhouses. The problem with the big players (Amazon *cough *cough) is that they win more… faster than everyone else combined.

Amazon is outpacing other major retailers combined

Figure 2: Amazon is outpacing other major retailers combined

In the US, Amazon has almost 2 times the market share of the next 9 largest retailers combined. Amazon has one clear advantage explaining their soaring performance: they operate a strictly digital delivery model, unencumbered by having to manage the two disparate operating models of a physical and online store.

Most leaders and executives have the more difficult task of driving digital transformation success towards a next generation operating model while simultaneously running the existing business model. This process of digitally transforming a traditional business model takes an exuberant amount of time and can fail without the right plan in place.

Not to complicate things further, but there is another twist: most leaders talk about implementing digital transformation initiatives but when it comes to actually delivering on those objectives, Forbes says, “84% of companies fail at digital transformation.” A Harvey Nash/KPMG CIO survey points out that only 41% of companies have an enterprise wide digital strategy, and only 18% of companies rate their use of digital technology as “very effective.”

But why is this the case?

Digital transformation success in any industry can seem obtuse and ambiguous when trying to translate goals into action items. Most consulting firms and internal process improvement teams promise digital transformation and business model innovation but, they struggle with distinguishing between automation of existing processes and delivering true digital transformation.

For example, digital transformation goes beyond using virtual tools like Zoom and Teams to facilitate meetings and messaging. True digital transformation is more than this simple automation, and instead cuts to the heart of why these meetings and messages are being sent in the first place. In the case of a weekly status report meeting from a project manager, you could have a virtual meeting - which costs the organization time and effort by the PM to prepare for - or you could set up a dashboarding tool that pulls live data directly from the project planning system and consolidates it for the executive team. Holding the meeting is using a digital tool to accomplish a current process, but leveraging a dashboard is fundamentally rethinking the process and saving the organization time, effort, and ultimately money - that is successful digital transformation.

I believe transformation projects fail in the first 10 days; they fail at the beginning not the end. Why? Unclear objectives, incorrect sponsorship, resource limitations, ill-defined services, purposeless customer experiences, conflicting priorities – the list goes on.

How to Maximize Your Digital Transformation Success

Let’s level set on the factors of digital transformation success right from the start:

1. Don’t ‘delegate’ transformation and expect results.

If you do, competing priorities will bring these initiatives to a halt before they’ve even begun. This is because each department is working towards different objectives where top-level leadership can assign it top priority and receive the resources the initiative warrants.

2. Set clear, ambitious objectives.

Most key performance indicator (KPI) or objective and key result (OKR) programs are created along departmental lines. This thinking silos departments and causes competing metrics and goals as each department is trying to optimize their performance. Supercharge your OKRs by coordinating individual objectives and then sharing those across the organization.

3. Clearly define, design, and communicate your process model.

You don’t digitize departments – you digitize the processes that drive value at your organization. Cross-functional processes don’t naturally exist between departments; they must be designed and purposefully articulated. The process model is the lifeblood to delivering digital transformation success.

4. Use the customer experience as your guiding light.

You need to have clearly defined services and a way to orchestrate end-to-end customer experiences. Earlier, I mentioned the need for and reliance on technology platforms. Too many transformation projects try to “swap” platforms, hoping for better features, fees, or ease of use. This approach will not transform your business. Your choice of platform technologies should complement what you seek in an innovative new business model that caters to your customers’ needs.

Circling back to Amazon, their model focuses entirely on the customer experience prioritizing speedy shipping, easy returns, and more options that you can dream of. Their digital platform has been designed to achieve their goals.

No matter if your organization is just getting started on your digital transformation journey, or your PMO is in the throws of executing a large initiative, you should take a moment and determine if you’re on the right path. Taking the time to build the right tools and abilities up front will save you time, money, and headaches down the road. And, if you are already executing your transformation project, it isn’t too late to give yourself the best chance of success.

Remember, transformation is about innovation and radical redesign, not automation of how you do things today. You must demand more of your organization, your transformation team, and yourself to be truly successful – don’t get lulled into anything less than true digital transformation.

If you are concerned about your transformation or don’t know where to start, Accelare’s experts are here to help. Whether you need a sounding board to bounce an idea off, a formal evaluation of your program, or help executing a complex project, Accelare can serve as your trusted digital transformation partner. Together we can ensure your program’s success and help you deliver truly profound results.

Topics:Digital TransformationThe Human Digital ExperiencePlatform Design Engineering


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