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Gone are the days when digital transformation was a plaything of the IT department.
A new report by Altimeter shows digital transformation enjoying more harmonious, enterprise-wide support across the companies pursuing it. Those doing it best know the goal of digital transformation is not to become more digital, but to stimulate company-wide growth.
Altimeter’s updated definition seeks to include what principal analyst Brian Solis calls its “holistic goals”:
“Digital transformation is the evolving pursuit of innovative and agile business and operational models — fueled by evolving technologies, processes, analytics, and talent capabilities — to create new value and experiences for customers, employees, and stakeholders.”
Their survey of 554 representatives from companies with over 1,000 employees shows the two most important goals of digital transformation:
- Fifty-seven percent cite “integrating all social, mobile, web, commerce, service efforts and investments to deliver an integrated, frictionless, and omnichannel customer experience” as a long term goal; fifty-four percent cite it as a short term one.
- Forty-nine percent seek to “modernize IT infrastructure and technologies with increased agility, flexibility, manageability and security” in the long term; forty-five in the short term.
Integrated, frictionless CX and a stronger, more manageable infrastructure are the primary reasons we’re going digital across all industries. Here’s what retailers can learn from the research about how to approach digital transformation.
Focus on Enterprise-Wide Transformation
While more than half of companies start by focusing their digital transformation efforts on IT, they soon expand into areas like marketing, customer service, or operations. Sixty-two percent of companies still focus their efforts primarily on IT, but 85 percent have expanded their efforts to include departments across the enterprise.
CIOs and CTOs are typically the ones initiating digital transformation, but Altimeter’s research shows CEOs are taking a more active role compared to previous years. CMOs are becoming more cooperative by localizing their efforts within the marketing space instead of battling CIOs for overall leadership. This spells increased cooperation throughout companies, and it’s working.
The most successful transformations are company-wide efforts achieved by getting people on board at every level, from the C-suite to the legal team.
Get All Your Leaders on Board—Even the Board
This even means getting the board on board, if you have one. And that may not be as big a challenge as it used to be. Boards are starting to show up for the digital revolution—albeit still in a limited capacity.
“We didn’t include ‘boards’ in the year prior,” Solis states of their previous research. “The notable presence of boards represents an encouraging sign given that they are notorious for holding back digital transformation efforts,” because they’re typically concerned with guaranteeing growth for shareholders.
If your board members are reluctant, remember they have a reason. Lack of data to prove ROI is respondents’ most frequently cited obstacle to digital transformation. That doesn’t mean the ROI isn’t there. It means we’re in new territory.
If your board is supportive, that’s promising. If your C-suite is aligned to follow the CIO’s lead, you’re ready at the starting line. If all departments and levels of operation are ready for the transformation, it’s time to organize a committee.
Organize a Formal Committee to Steer Your Transformation
If you’ve followed the above steps, you’ve all but completed this one. Let your CIO or CTO lead, but build a committee representing all departments, and support it from the top with resources and strategic planning.
More often than not, companies are now organizing formal committees with executive support to steer the digital transformation process. Data shows digital transformation committees increasingly represent non-IT departments like sales, HR, and product groups. This marks a new level of maturity for digital transformation, and Solis considers it “an extremely promising development that suggests digital transformation maturity is finally taking root.”
You don’t necessarily need to formalize your committee to succeed in digital transformation. But you should at least organize an informal one to help position you for harmonious, enterprise-wide growth.
Digital Transformation is a Response
Forty-one percent of companies embrace digital transformation because of competitive pressure, and 51 percent begin as a way to capitalize on growth opportunities. The common denominator for all of these is they’re embracing digital transformation as a response to market demands.
Don’t plan a digital transformation without attention to detail. Base your strategies on solid customer data and market research. Many companies (41 percent) are still falling short at this step before launching into transformation. Due diligence will help ensure ROI, and will tell you which technologies to embrace for the most effective results.
Focus on Disruptive Technologies Relevant to your CX and Operations
Many companies seem to have relegated technologies like geofencing, drones and 3D printing to the backseat, focusing on more immediately relevant investments like AI, big data, IoT and the cloud.
The technologies you invest in depend on your CX and operations, and should support them directly. Blockchain, for example, is only embraced by 14 percent of respondents, but could be eliminate your company’s need for cloud storage. So just because the cloud is the most popular technology for digitally transforming companies to invest in, as Altimeter’s results show, that doesn’t mean it’s what your company needs. If you start to lose sight of your company’s short and long term goals, your well-organized committee should be there to get you back on track.
The technologies you invest in should be informed by your market research, supportive of your short and long term goals, and embraced by the whole company.
Recap: Transforming Your Retail Enterprise for Digital
Start by analyzing your customer data if you haven’t already, to see what forms digital transformation will take to best serve your enterprise. Organize a committee led by IT and supported by the C-suite to strategize and implement. Outline how digital transformation will impact every department, keeping focus on company-wide long and short term goals. Zero in on the relevant technologies as a directly response to the market pressures you’re facing, and invest in those techs. Give it time, and make sure your efforts are consistently united across all levels of operation.
This is the method evolving across industries for successful digital transformation. The best time to put it into action was yesterday. The second best time is now.
January 25, 2019 at 05:00PM
Forbes – Entrepreneurs