How to set an end goal for digital transformation
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Posted by: Lucid Content Team
Business reinvention and digital transformation are nothing new. For example, the iconic video game company Nintendo started as a playing card company. Ubiquitous Amazon began life as an online bookseller. Almost bankrupt by the ’90s, Apple reversed its course by making a more intuitive smartphone.
By harnessing the latest digital technologies, it can potentially transform entire business processes, work cultures, and customer experiences within a corporation—all in an effort to deliver added value and meet market requirements. Sometimes, it’s a complete reset.
Yet, a reported 84% of companies fail at digital transformation.
Before a business can follow a digital transformation roadmap, business leaders must first determine an end goal for their transformation, creating a clearer path to action and implementation.
Common digital transformation goals
Just as the reasons for digital transformation can differ greatly from organization to organization, the end goal for transformation can vary. However, many businesses gravitate towards one (or more) of the following end goals.
Optimize processes and operations
Companies often undergo a digital transformation for the purpose of operational improvement. In the early stages of IT, digital transformation involved converting information into code. Now, the emphasis has shifted to creating an agile business structure and automating business processes using AI.
According to a recent Harvard Business Review study, roughly 60% of companies have been able to transcend their previous achievements by switching to cloud-based apps. Bypassing the limitations of siloed information and on-premises software, they found it easier to gain both organizational efficiency and insights with transformative results.
Transformation goals for process optimization often involve rapid decision and learning cycles, the reconfiguration of outdated procedures, and ongoing cost-reduction efforts.
Gain a competitive advantage
The ongoing digital revolution is responsible for the explosion of entirely new business models in recent years. A generation ago, Google or Facebook as a business would have been hard to imagine. Yet, each adhered to a digital transformation roadmap, finding strategies and identifying ways to monetize their unique intellectual properties.
Being positioned as the world’s premier search engine or most popular social network would fulfill the aspirations of most corporations. But companies like these use digital transformation to achieve never-before-seen competitive advantages in their space, using data insights and knowledge base to disrupt the once-staid advertising industry.
Before Uber or Airbnb gained acceptance, access-over-ownership, digital-first business models were merely transformation goals. It’s this pursuit of digital transformation and nonstop innovation which helps distinguish upstart companies from the competition.
Increase top-line growth
For small businesses and Fortune 500 companies alike, the goal of digital transformation is to increase gross sales or revenue.
Technology can streamline customer interactions and transform how users or customers purchase items and make payments. For example, medical clinics can utilize Zoom or Microsoft Teams for their telemedicine services while insurance companies can use mobile apps to submit claims.
In these examples, digitally transforming the customer experience allows businesses to “see” more patients and submit more claims, therefore contributing to the top-line.
Homie harnessed digital transformation to simplify the process of buying a home, ultimately saving their customers money by acting as buying brokers, listing agents, and mortgage lenders. This integration of services is wholly contingent on digital technology. The savings realized by Homie’s customers, home sellers and buyers alike, also contribute to the top-line growth of the business—in itself, a competitive advantage.
Improve the customer experience
Many organizations will set a goal to improve the customer experience. But, often, there are subgoals that are even more specific that can help a business understand exactly how to improve the customer experience, such as:
- Deploy high-quality code and products.
- Get to continuous deployment.
- Implement SCIM.
- Create a user-friendly mobile app.
- Automate manual processes.
Essentially, digital transformation is a means to achieving your business goals and subgoals. For example, Homie wanted to provide a better experience to home buyers and sellers. So they examined the “old way” of buying and selling, asked why there wasn’t a better way to do it, and set goals and subgoals to create a new and disruptive process and platform.
As part of their larger goal to create a better customer experience, they created a sub-goal to provide buyers and sellers with more transparency and control over the process (among other sub-goals). They leveraged—and created—new technology to achieve these sub-goals that contributed to the high-level goal.
When digital transformation takes hold, companies can truly improve the customer experience. Companies may use technology to improve how customers interact or implement internal tools that result in less time processing paperwork and tackling other repetitive tasks, allowing employees to focus on customer-centric activities, such as interacting with customers, fulfilling specific requests, and offering hands-on assistance.
Make sure that a full digital transformation is really what your organization needs—and not just an update to your broken processes.Learn more
Starting points for transformational goal-setting
There is no magic formula for setting digital transformation goals. Every business is different, each with its unique set of needs, approach to addressing change, and ability to achieve the goals.
That being said, here are three possible starting points for your transformation goals:
Connected technologies: Harnessing dedicated digital platforms like the cloud or the Internet of Things (IoT) can help make data more accessible and transparent.
Autonomous technologies: The integration of AI and advanced machine learning allows companies to use sales data to target the right customer for new products. Automation often takes the form of proprietary CRM systems that allow an organization to analyze and manage key interactions with past, present, and prospective customers, paving the path to specific goals and better customer journeys.
Programmable technologies: Companies like Best Buy let others deliver value via application programming interfaces (APIs) to build new revenue-share programs.
Of course, your digital transformation goals don’t have to be limited to these starting points. Transformation goals require buy-in from a variety of stakeholders, such as:
Senior management: These individuals are influential in promoting digital transformation throughout an organization and securing the necessary funding.
IT department: The group can minimize potential system roadblocks and enable the integration of key technologies to streamline new processes.
Finance team: Digital transformation can increase revenue streams and help eliminate fraud, both of which affect the bottom line and are of interest to finance.
Talent and human resources: In the pursuit to attract and retain talent, those in HR are often at the forefront of digital technologies and act to champion change.
Marketing department: Holding sway over external and internal customers, marketing plays a major role in reassuring others of the need for transformation.
Frontline employees: Without awareness and endorsement from the employees who interact directly with customers, the adoption of digital transformation is nil.
Because digital transformation requires participation at all levels of the organization, it is critical to secure buy-in from the start, assuring that each stakeholder understands what they can contribute to the initiative and recognize what their departments stand to gain.
Guide your goals with essential questions
Throughout any digital transformation, there is necessary groundwork to ensure the goals set are attainable and that execution goes as planned. This thoughtful goal-setting and preparation is what separates lasting change from unrealized ambitions.
To set your goals, gather the necessary stakeholders and discuss the following questions together:
Who will need to be involved in the decision-making process? Committing to specific digital transformation goals will likely require approval and buy-in by more than one department leader.
What will we need to do differently to meet our transformation goals? Take a realistic look at the time, dedication, and resources will it take to enact change.
What obstacles are holding us back from digital transformation? Hurdles to change can vary from budgetary constraints to the lack of network infrastructure.
Which transformation goals are the most important to achieve now? Like most big undertakings, digital transformation demands a prioritization of goals.
Do we need a total transformation, digital improvement, or just a better process? Carefully assess your needs and set a clear goal so you don’t overspend on new applications or do more than is needed.
Answering these questions will bestow your company’s digital transformation with much needed clarity and context.
Assess your company’s digital maturity
Research indicates that 87% of businesses believe that digital technologies will disrupt their industries, yet only 44% feel adequately prepared for those projected disruptions. Not surprisingly, few companies are digitally mature. Where does your company fit in?
As the saying goes, “Before you can know where to go, first understand where you are.”
When assessing the digital maturity of a business, take the following into consideration:
- What is the focus or strategy behind your digital transformation?
- What capabilities are needed before achieving transformation?
- What are your current limitations, weaknesses, or blind spots?
- Looking closely at your organization’s current business model, are there areas in which its digital capabilities dictate greater prioritization based on its transformation ambitions?
For example, according to the Deloitte Digital Maturity Model, if your company is highly dependent on partners to deliver, it will be more important to focus on having a mature platform-based infrastructure to facilitate an open ecosystem for go-to market partners.
Use your assessment to drive action and initiate digital transformation sooner than later.
Measure the progress of your digital adoption
Digital transformation affects every aspect of a business. This is why its implementation demands alignment and collaboration from all departments to set goals, execute, and achieve lasting success.
Yet, one survey shows almost 50% of CEOs have no metric to measure transformation.
Although there are several methodologies to determine progress and efficacy of your efforts, when establishing KPIs, keep it as simple as possible. For example, you can:
- Measure digital adoption by comparing the software licenses purchased against the number of employees who are actually using the software.
- See how your company’s digital adoption affects productivity. If gauging a customer support AI’s impact, check if total help-desk inquiries decreased.
- Look for revenue attributed to digital adoption. If a recent offer requires the downloading and use of an app, there should be a related sales increase.
Whichever metrics you choose to measure, it’s imperative to always quantify the results.
While there are many goals of digital transformation, digital maturity is the end goal of transformation—the ability to continuously adapt and respond to new technologies, with the knowledge and tools to assess what’s needed and how to respond (if at all) with technology. Digital transformation and digital maturity are continuous processes that include ongoing goal-setting and revising.
More than just implementing the latest tools and technology to digitize operations, your digital transformation goals should be rooted in delivering a unique and valuable experience to customers as efficiently as possible when it comes to time, resources, and cost.
Once your digital transformation efforts are fully adopted and begin to yield results, it will forever change how your organization views and conducts business.
Have a goal ready? Good.<br>
Now develop the rest of your digital transformation strategy.
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