Is it time for digital transformation at your company?
You have every right to be cautious.
Many enterprise digital transformation strategies today start with a bang but end up in the trash can, with companies out millions of dollars and nothing to show for it but regret.
If recent findings by Adlib are anything to go by, then the rate of failure for digital initiatives is frightening as only 26% of them end up successful.
Just let it sink in for a moment.
That means for every 10 companies implementing digital transformation programs, at least 7 of them are destined to fail.
How can you ensure your project is in the successful minority?
I’ll be answering this question and more, as we steer around common pitfalls to creating a digital initiative for your business that changes the narrative.
In this article, we’ll unlock the secrets of the ultimate guide to a winning digital transformation strategy for enterprises
Let’s get started.
1. What is digital transformation?
What is digital transformation to you?
Naturally, one business’ idea of digital transformation can vary wildly from the other. That’s because we all have different workflows and how we go about operations.
However, the general digital transformation definition is that it is the strategic implementation of various digital technologies into your workflow.
The goal can be to improve an existing operational system, or to change it entirely, which is especially the case when you’re transitioning from heavily analog processes.
It’s often the case today that the terms digital transformation and digitization are used interchangeably, which is quite inaccurate.
Digitization is only a part of digital transformation and strictly refers to switching to digital forms from analog preliminaries.
For example, that could be the process of purely moving from paper-based documents to digital files. It could also involve moving from analog media, such as vinyl records, to digital media like MP3s.
The digital transformation meaning, conversely, is a much broader concept.
It is the complete strategy involved in the calculated adoption of digital technologies. This also covers a change of business culture, including a shift in hierarchy and policies, to make room for the intelligent opportunities that these technologies provide.
2. Digital Transformation Domains
Often multi-faceted, a standard digital transformation framework encompasses a variety of pillars or aspects which may also vary depending on your business’s model.
Typically though, the five critical areas of digital transformation include:
2.1 Customer experience
With the rapid evolution of digital technologies, consumer habits are similarly changing at a fast pace.
For example, according to a 2020 Walker study, price has taken the back seat today as your customers’ experience becomes the most important brand evaluation metric.
So customer handling processes are undoubtedly among crucial digital transformation components.
These encompass all touchpoints between your business and its market base, which could be anything from social media to door-to-door sales strategies. Every part of the omnichannel customer service experience you provide should be up for evaluation.
2.2 Data management
What are your data management processes like?
Perhaps your business relies on traditional legacy systems which silo information in one department and hide it from others.
Maybe you haven’t even gotten around to implementing a content migration strategy.
Data management is among the core elements of digital transformation, with there being a need to integrate data sources with intelligent technology for better analysis and protection.
Consequently, your business should evaluate its information model. This provides guidance on data management transformation that is holistic and seamlessly connects various parts of your operations.
2.3 Value creation
Are you sure your workflows are perfectly efficient?
While many businesses get through a financial year with considerable profits, those numbers still could be better.
A lot of resource waste occurs in between ineffective work processes, which are typically dependent on manual data remediation strategies. Additionally, it could be that your business is not achieving its true revenue potential because of inefficiency.
Therefore, digital transformation should also focus on areas with huge value-adding potential.
Case in point, one Fortune 100 company which was able to prevent $100 million losses in revenue.
Previously the company relied on conventional data capture tactics, which were much slower and experienced lots of delays.
With a better way to sort data via an intelligent document processing software, the company is now able to squeeze out maximum value from its workflow.
2.4 Competition analysis
Competition is strife in today’s business world, no matter your line of work.
Currently, over 4 in every 10 small businesses use business intelligence tools, going by a Grandview market study. So if you aren’t, you risk getting left behind.
Companies everywhere are jostling for similar markets, and at the end of the day, it’s survival of the fittest.
For this reason, competition analysis should be part of the digital transformation domains that you prioritize.
Specifically, this can take a focus on sales and marketing strategies, and how digital technologies can improve these to give you an edge over the competition.
Unlocking big data analytics is one way to do that.
By enabling your business to better cut into the heart of important market data, digital transformation programs can help identify opportunities to beat the competition by tapping into opportunity gaps.
2.5 Innovation potential
Modern digital technologies have many creative use cases that businesses can consider to innovate various operations.
Considering a multinational manufacturer, digital transformation enables operational innovation straight from the factory, i.e., sorting work, product testing, etc., through to how goods pass across the supply chain, e.g., delivery methods.
In such a scenario, digital technologies can be leveraged in practically all of these processes. For instance, Cobots can come in handy for sorting work, OCR technology can help with product testing and inventory management, while autonomous drones could improve shipping.
The point is to identify typically iterative tasks in your workflow that digital technologies can automate.
For example, if document processing for client onboarding is hogging your resources, an AI-powered content intelligence solution will offer relief.
In a nutshell, you’ll need to review your operational model for such kinds of innovative opportunities.
3. Why is Digital Transformation Important?
Digital transformation unlocks many advantages for organizations when implemented correctly. It has the potential to not only uplift business processes and quality of service but many other areas as well.
That said, here are three benefits of digital transformation:
3.1 It is key to a better customer experience
Customers are your business’ number one priority.
A Gartner survey substantiates this with findings that at least 66% of marketers attest to customer experience being the biggest point of competition for businesses today.
Digital transformation can unlock data-driven insights to better help you make a difference where it matters most.
If your business collects immense heaps of data, analysis can be hard with manual data handling strategies. Digital technologies offer the answer to unlocking business intelligence.
By making sense of both structured and unstructured data sources, such as social media content, you can spur organizational progress through a better understanding of consumer needs and preferences.
3.2 It helps you better manage business resources
If you depend on numerous applications to power your workflow, then you understand the struggle to simultaneously manage all these resources.
With dispersed databases and software across your enterprise, keeping an eye on all your resources can be a drain, and you’re bound to occasionally slip up.
Digital transformation can bring together all these software, databases, and applications under one roof, typically through an ERP system.
Via a central repository, you can control various aspects of your business. Moreover, it becomes even easier to find opportunities for process innovation across various areas and boost efficiency, which is yet another of the many advantages of digital transformation.
3.3 It improves your data privacy and security
Data breaches are a common occurrence in today’s risky digital world, making another case for the importance of digital transformation.
In addition to worrying about cybercriminals, you also need to think about regulatory penalties that come with the lackadaisical protection of consumer data.
To get around these data privacy and compliance issues, the solution lies in digitally transforming your data handling and management processes.
More specifically, with cloud content intelligence solutions such, you can unearth customer PII buried in data silos across various departments.
Then you can further take action to protect personal data by deleting what you don’t need, or masking/encrypting sensitive information that runs through your processes every day.
4. Digital Transformation Examples
While the statistics might paint a grim picture of overwhelming failure, there have been cases where companies have gone the distance and reached the digital transformation finish line with a plomb.
Without further ado, here are 3 impressive digital transformation success stories to spur you on:
4.1 Retail banker uses Adlib Software for faster policy ingestion
Technology upgrades don’t always go according to plan.
That was the case for a huge UK-based retail company that found itself locked out of millions of mortgage files after they didn’t properly think through their digital transformation roadmap.
Previously reliant on old legacy systems from the past century, the company had to go back to these to access original mortgage letters from customers.
However, the solution wasn’t as straightforward as they thought, and there was an incompatibility between the new processing platform and the old legacy systems.
A staggering 3.6 million documents become inaccessible as a result, leading to huge concerns of non-compliance with regulators.
Faced with either risking regulatory penalties or resorting to manual data remediation strategies that could take years, the bank opted to invest in Adlib software to turn around the situation quickly.
Substantiated by a proof of concept, the bank established that the content intelligent platform was capable of meeting their project goals in due time.
As a result, the entirety of 3.6 million documents was successfully transferred to the new processing system. This is thanks to Adlib’s ability to use machine learning to extract and classify the old AmiPro documents, making it one of the standouts of these digital transformation examples.
The bank is now able to offer better customer service, and meet compliance regulations, as staff can easily find mortgage-related documents.
4.2 Insurance company improves policy processing with intelligent data
Poor document searchability and long processing times plague insurance companies.
Given 24,000 delays in data capturing methodologies, one Fortune 100 Insurance provider was feeling the heat of relying on manual workflows.
The company was receiving files in a wide range of formats, and since these included both images, text, and a couple of different other types, it involved strenuous manual processing to sort this data.
According to the digital transformation case study, the company lost close to $100 million dollars in revenue, due to the start-to-stop nature of the data capturing process.
To solve the issue, the company eventually turned to Adlib software to not only increase the rate of policy ingestion but improve customer service at large.
Due to AI-powered OCR technology, they were able to convert various types of documentation into high-definition PDFs.
This simplified the identification and sorting of claim numbers directly into the insurer’s online platform.
Additionally, customer insight became readily available due to the intelligent extraction of data, while audit trails remained clear thereby facilitating regulatory compliance.
4.3 Energy leader fuels digital transformation with content intelligence
Unstructured data continues to be the enemy for oil and gas industries.
CAD drawings and other internal and external data sets are typically locked up in non-searchable formats, ensuring the discovery process is challenging, to say the least.
This was the case for one particular oil and gas company.
Schematics were locked up in dark data and the engineering teams had to go out of their way each time they wanted to reference important data.
Additionally, there was the pressure to move applications to the cloud to enable enterprise-level digital transformation that was easily scalable and built for the long term.
After accessing various software solutions, the company went with Adlib software to improve accessibility to CAD data.
Its ability to dig through dark data and provide easily scalable and searchable structures proved it a viable solution.
This intelligent content extraction ability came in handy to unearth previous unfindable CAD schematics. As a result, they were able to process these documents into high-fidelity PDF files that engineers could look up in an instance.
Decision-making processes consequently improved drastically, making this case study a contender for the best example of digital transformation.
5. Why Digital Transformation Projects Fail
Digital transformation projects are not always successful.
In fact, only 27% of businesses ever get around to deriving any substantial value from such initiatives, going by an Everest Group Study.
To avoid the same fate for your project, here are three common reasons why digital transformation initiatives fail:
5.1 Failing to reengineer core processes
Is your current workflow compatible with new digital technologies?
Many businesses today nosedive into digitalization yet their core workflows are broken and need reengineering. This is substantiated by a Global Digital survey which states 45% of executives believe their company workflows aren’t ready for technology upgrades.
Consider German manufacturer Haribo.
Burdened by an inventory management strategy that was out of touch with the times, Haribo kicked off an immense enterprise resource planning renovation in 2018.
But not too long after, the confectionery company ran into supply chain problems.
Inventory tracking was problematic, and materials consequently experienced delayed arrivals and there was a shortage of products. Sales took a 25% plunge after the transition attempt, and some of Haribo’s subsidiaries reverted to their old workflows.
All these could have been avoided if the company conducted an audit of its processes, and carried out reengineering to ensure the new ERP slotted right in with the infrastructure.
5.2 Not conducting proper vendor due diligence
Typically, you’ll need technology partners to help you see the project through.
Without proper research into your digital transformation partners, important information that could impact your project’s fate may remain hidden.
Washington Community College is a prime example of why digital transformation projects fail due to inadequate research.
The college tried to implement new software to take over student enrollment and other administrative duties, with IT firm Ciber brought in to assist with the task.
Unknown to the institution, Ciber was in huge financial turmoil and filed for bankruptcy in the middle of the transformation, and the project failed.
So just as you would carry out comprehensive due diligence for mergers and acquisitions, do the same for your technology partners.
If the college had done its homework, they probably wouldn’t be in court battling a lawsuit.
5.3 Having unrealistic expectations
Goals are important for the success of any project.
However, these goals should be reasonable.
Businesses set the bar too high either in terms of the pace of implementation or expected business value, which is why digital transformation efforts fail sometimes.
As a result, an otherwise feasible solution ends up failing largely because system integrators have to rush through testing and miss glitches.
Consider Hershey’s who sought to digitally transform operations in 1996.
The chocolate manufacturer wanted to infuse new CRM (customer relationship management) and SCM (supply chain management) software into its workflow.
Rushing to complete its projects before the turn of the millennium, the company wouldn’t budge on a 30-month window. This implementation was in sharp contrast to the recommended period of 48 months.
As a result of hastening the rollout, there were some complications with order processing during peak business season. The company lost out on orders of over $100 million despite having a stocked inventory,
The lesson here is to be patient and realistic with your expectations.
6. How to Develop a Digital Transformation Strategy
What makes a good digital transformation strategy?
I’ll offer a digital transformation guide to take you through the process from scratch to finish, including important milestones in between.
Here are five important digital transformation steps to get you started.
6.1 Create business goals
A digital transformation framework without goals makes it difficult to achieve success.
Many projects end up being ineffective because businesses didn’t know what they were working towards.
Goals are the guiding light for any project and offer scope and a roadmap to the ultimate guide to a winning digital transformation strategy for enterprises.
The first step to goal creation lies in identifying the problem you’re hoping to solve for your business.
Are you trying to improve your customer service to reduce churn rates?
That should be clear from the get-go.
6.2 Conduct a business audit
A good digital transformation strategy for success also begins with an audit.
Not a financial audit, rather an assessment of your current business situation. This will involve a deep dive into your company’s values, cultures, and more importantly, policies, to figure out if there will be a digital disruption in any of these areas.
Without an audit, policies risk getting left behind and exposing your business to certain vulnerabilities.
For example, let’s say you’re aiming to transform processes involved when handling customer PII for compliance and privacy reasons.
Consequently, there will also be a need to draft up policies on how these new digital technologies will be handled, in keeping with data laws regarding the use of such devices. That may include thinking about new internal rules concerning access and shareability.
Beyond that, an internal audit serves to also point out roles, processes, and operations important to your digital transformation roadmap.
6.3 Choose technology partners
What digital technologies will you need to achieve your goal?
In the case of reducing churn rates through better customer service, for example, your business may consider a content intelligence software to create a comprehensive database for more targeted marketing.
It’s important to perform this technology evaluation early enough in your digital transformation stages to figure out what digital solutions are feasible. Speaking not only from a budget or monetary perspective but also from a restructuring angle.
For instance, will you need to deconstruct your core operational processes?
The ideal digital technologies should fit into your workflow like the missing piece of a puzzle. However, restructuring is not always a bad thing if the ROI is worth the end result.
6.4 Schedule training programs
Is staff training necessary?
Well, implementing digital transformation is no good if your front-line enforcers aren’t quite sure what’s required of them.
These include the staff who are not only the last link between technology and various touchpoints but also employees at back-end processes.
Therefore, you’ll need to identify important skills, which could be DevOps or cloud security know-how, among others, that come with the implementation of new technology.
Then put in place training programs to compensate for the knowledge deficit, which shouldn’t be a problem considering that 74% of employees are open to learning new, employable skills, according to a PWC report.
Additionally, it may be the case that you’ll need to recruit as well for a data scientist or software engineer.
Communication is also key to a successful digital initiative.
Employees need to feel part of the process and there should be an open floor to air out concerns or suggestions.
6.5 Get started in phases
What is your digital transformation approach?
Phased implementation is important because, first, you don’t want to spread whatever resources you have, be it personnel, budget, etc., too thin.
Secondly, getting started in phases allows you to avoid disrupting huge parts of your workflows at once. Finally, phased digital transformation enables you to test-drive the technology on a smaller group. Challenges, therefore, can be easily remedied before upscaling.
Keeping on with our theme of better customer service, you could divide this up into a couple of segments namely:
- Existing process optimization
- New process digitization and implementation
- Integration of both new and old for a new business model
- Systematic training programs to ensure the success of the new digital ecosystem
Of course, this is just one template and there’s no one-fit-all formula to how to develop a digital transformation strategy that works.
7. How to Measure ROI for Your Digital Transformation Project
How do you know if you’ve made progress?
Gauging success is crucial to determining what’s working out right so you double down on that, as well as what’s not working out so that you cut it out.
So here’s how to measure your digital transformation progress.
7.1 Draft a practical calculation model
In some cases, it’s easy to come up with a formula because certain digital transformation success metrics are fairly easy to quantify.
Let’s say you want to find a better way to carry out your contract analytics. Maybe because you are spending big on outsourcing the process, or maybe since it periodically diverges a lot of employee time.
In a nutshell, you’ve opted for intelligent contract analytics to speed things up.
Now, what you’re spending on outsourcing or business time that goes into the task offers good benchmarks to create a digital transformation ROI calculator.
Simply establish how much value the aforementioned cloud intelligence software offers in comparison to the past.
How many work hours went into traditional contract analytics?
How much time do you spend now after digitalization?
The difference offers a pretty good estimate on your returns. Alternatively, work out how much money you have saved as a result.
Using Adlib’s contract analytics ROI calculator, it’s pretty easy to figure out the value of such a digital transformation project way before you even get started.
Simply generate an estimate from your company’s current revenue, incorporating contracts renewed every year, time spent on each contract, and their level of complexities.
7.2 Measure your end result
For cases that might not be as straightforward as the above, there’s a need for more hands-on measurement tactics.
Let’s go back to the example about reducing customer churn rate.
What are the digital transformation success factors to consider here?
Some important aspects you may be looking at in this scenario include:
- Repeat purchases
- Satisfaction scores
- Customer churn rate
- Customer referrals
As you can see, it’s often a lot more than just about working out profit margins when determining the ROI of your enterprise digital strategy.
You should also be looking at process quality, product quality, and employee engagement improvements.
7.3 Keep on analyzing
Why should you continue measuring ROI?
Because enterprise digital transformation isn’t a one-off destination you arrive at and that’s the end of the story.
It’s a continuous process that your business works at every day, the same way you strive to meet customer demands without fail. There are always new things to aim for.
Additionally, KPIs can change from one phase of the project to the next, thus your digital transformation ROI calculator or methodology will keep changing as well.
For instance, at the initial stages, expenditure on employee training and new software can be dragging down your returns. However, these costs won’t always be there.
According to Google, KPIs that truly matter should be tied to broader business goals instead of fleeting, short-term objectives.
That said, be sure to set realistic expectations as project hype is among the crucial pitfalls of digital initiatives.
8. How to Choose the Right Digital Transformation Partner
The right partners have the experience to get your digital transformation initiative on the right footing, while the wrong ones will only impede your progress.
So as part of this ultimate digital transformation guide let’s look at three crucial criteria to keep in mind.
8.1 Consider technical capability
It’s often the case that your business won’t have all the digital transformation roles and skills it needs for the transformation.
Positions such as analysts, senior software engineers, and architects are usually not roles you’d find in a standard hierarchy, especially if you’re in a non-IT industry.
As a result, you’ll want a partner who can provide the expertise for the required roles. Or, at the least, help you go about recruiting for the necessary positions.
It’s also important to inquire about their technology focus and other important aspects such as workforce models and operational scalability. At the end of the day, you want your specific needs to align with the technical expertise offered by your firm of choice.
8.2 Prioritize content intelligence
No digital initiative can properly run without intelligent data.
Data is the fuel that powers every customer-centric digital drive, and without it, you may not be able to achieve end-to-end automation. As a result, your business will be restricted to small wins, and RPA scaling will prove a cumbersome adventure.
Unstructured data is the biggest stumbling block for digitalization projects. That’s why your perfect digital transformation partner lies in a content intelligence platform.
Break down those data silos hidden in your various systems, and unlock insightful data that is key for project due diligence, especially when it comes to identifying automation opportunities in your workflow.
8.3 Examine the company’s footprint
There’s certainly plenty of digital transformation business partners to choose from.
Be it huge multinational nationals or small-scale entities, the digital arena can feel crowded at times, making it difficult to narrow down your options.
That’s why you’ll want to take a closer at your prospect’s organizational footprint, which entails aspects such as:
- Engagement procedures
- Organizational strategies
- Toolsets and infrastructure
- Security measures and tactics
Additionally, track record is an important factor, and your technology partner of choice should have past use cases to share with you from previous success stories.
That way, you can rest easy with an assurance of expertise.
Even just as important are the escalation paths the company provides. You want a partner with clear communication channels; a partner with fast response times and one that can sort out any issues without delay.
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Are you ready to put in motion your digital transformation strategy?
Remember, the top reasons for enterprise digital strategy failure trace back to three things:
- Unrealistic Expectations
- Unstructured data
- Rigid workflows
Many digital projects fail largely due to avoidable issues, boiling down to poor planning and assessment processes.
To master the ultimate guide to a winning digital transformation strategy for enterprises, set realistic goals early on, and determine if some business process reengineering could hold you back when you get started.
For the third factor, i.e. unstructured data, you’ll want to get this sorted out fast because unstructured data problems only grow bigger by the day.
In that regard, it might be time to implement intelligent data analytics, driven by a content intelligence platform, to rev up your digital initiative.
Lerma is our expert in online education with over a decade of experience. Specializing in e-learning and e-courses. She has reviewed several online training courses and enjoys reviewing e-learning platforms for individuals and organizations.