Digital transformation has remained a top strategic priority in recent months. However, even prior to the pandemic, global investment in digital projects was steadily increasing. Indeed, IDC forecasts that investment will reach $7.4 trillion by 2023, with the critical drivers being market competition, rising customer expectations and ongoing business challenges. However, the recent pandemic has accelerated many of these initiatives.
Many companies want to learn how to digitally transform and how to do it fast. However, in most cases, initiatives that are rushed and driven by the desire to keep up with competitors or adopting the latest technology do not necessarily result in success. Given the increasingly volatile environment, where the outcome is still unknown and there is no set timeline for our return to normality, businesses need to establish clear business objectives from the start, before adopting any transformational technology.
Why so many digital transformation initiatives fail
According to Conga research, while 97 percent of companies surveyed worldwide already have a digital transformation strategy in place, only half of these initiatives are considered mostly successful. In fact, in Europe, the success rate is even lower, with only 43 percent of companies experiencing some success with their transformation programs.
The problem lies with how businesses approach digital transformation in the first place. Many strategies are driven by the desire to use and incorporate new technology which then drives, or forms, the basis of their planning, as opposed to identifying clear business goals and reconsidering their current operational model. Covid-19 has only accelerated this issue.
It is important for businesses to remember that, while digital transformation offers many competitive advantages, that does not necessarily mean it is easy to define, plan and execute. Too many business leaders prioritize technology over strategy and do not have a clear understanding of the outcomes that digital transformation can and should drive. It is crucial that companies first establish where they currently stand in their own digital transformation journey, by considering their own digital maturity.
To do this, companies must first evaluate their operational model, assess its suitability, and identify any pain points along the entire business cycle. The key is to arrive at a clear understanding of how and where change needs to occur in order to progress and improve the organization’s overall operability.
Digital maturity refers to how well companies adjust to a digital business environment. Those that recognize the need for change and embrace innovation will likely be further into their transformation journey than those who don’t. With digital maturity comes flexibility, and businesses will be able to readily develop a transformation strategy that enables new approaches and identifies workable methods to implement them successfully.
Companies with a higher degree of digital maturity can often define and identify goals that enable the continued development of the organization. For example, they can more easily recognize when a legacy system, outdated approach or obsolete technology has run its course. Employees within these companies will often find that they work together more effectively across departments; sharing ideas, enabling new structures, methods, or products to develop naturally.
Where to start… the first step in the digital transformation process
Businesses should always start by establishing clear objectives and a strategy – the immediate focus should not be on technology. A business leader can determine the company’s maturity level by re-evaluating the current business model and, ideally, seeking expert advice.
Once they have assessed their business’ overall digital maturity, leaders will have a clear picture of the current state and what the next stage of their company’s digital transformation journey should be – rather than simply guessing, or learning through trial and error. Mostly, this will mean working on, and defining, an essential process that has a strong impact on the success of the company, such as the sales cycle or revenue generation. Of course, creating a strong strategy will also mean addressing the teams who will be involved in the change process. It is vital these employees are on board from the start and realize the need for change, in order to ensure wider adoption across the company.
At the initial stage of the maturity model, processes may be unpredictable, reactive and poorly controlled. In fact, employees may feel bogged down by manual procedures that do not translate well between teams. The next stage involves establishing a strong foundation, one central location for all product and pricing that can be accessed by all employees. If required, there may also be a powerful configurator to simplify the complexities of vast product and pricing. Then businesses need to consider their current system – a stage where any proposals and quotes are automatically created allowing collaboration and intelligent workflow approvals across sales teams and leaders, making for higher efficiency.
Building on this, businesses can then consider automation and the acceleration of certain everyday processes, such as guided selling with intelligent product recommendations and deal-scoring tools. With the increase of automated processes, employees will feel far more productive and have more time and head space to concentrate on their customers. Following this, the next stage will involve exploring the possibilities of further integration between other systems such as CLM, ERP and fulfilment systems for more sophisticated multi-channel management. Before proceeding to the final stage: intelligence. This stage allows businesses to utilize advanced insights and reporting for unparalleled sales performance reviews, making sure that all teams are fully up to speed with each customer’s interaction with the business’ different teams.
Businesses will proceed through these stages of digital maturity at different rates depending on the complexity of their structures and, of course, some will have to go back several stages to tackle problems of efficiency. This is why it is important to reassess the business’ current state, so that leaders can identify ways in which the business could overcome roadblocks and perform far more effectively before building a strategy to suit.
At a basic level, it is all about reconsidering the relationship between people, processes, and data. For example, considering the everyday sales cycle and the number of documents and contracts involved from the first proposal, drafting an initial contract, any last-minute additions and even final sign-off. The less mature a business process is, from a digital perspective, the more complex and problematic the overall process becomes – it will undoubtedly lead to bottlenecks and issues further down the line. Simplifying and streamlining a critical business process is a key part of the strategy that makes transformation projects far more successful.
As recent experience has proven, digital transformation is vital in today’s business world and will only continue to grow. However, with tighter budgets expected in the near term and next year, organizations can no longer afford to waste their investment in new technology. By embracing change, understanding the concept of digital maturity, and continuing to evolve their business, organizations will excel and continue to thrive after the pandemic. Focusing on establishing clear strategies that improve their company’s digital maturity, with the appropriate technology to help deliver these outcomes, leaders will reap the rewards of digital transformation.
Ash Finnegan, Digital Transformation Officer, Conga