Digital Transformation - a 7-Step Road Map for Success (Part 2)

Posted by Rick Yvanovich

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We have discovered the first 3 steps of the road map to Digital Transformation in the previous blog post. In today’s post, we will discuss the next 2 steps.

Digital Transformation - a 7-Step Road Map for Success

Step 4 - Communication

The digital vision and strategy then need to be sold to employees and other key stakeholders. One of the best approaches is to brand it as a product. For instance, ING named their digital strategy “Accelerating Think Forward”, or Allianz announced their intention to become “Digital by default”.

Companies can also utilise other familiar tools, corporate vision and mission statements, and come up with their digital vision and mission statements. Or better yet, make no distinction between the “non-digital” and digital statements.                                                                         

Such messages should be repeated on a regular basis to reassure stakeholders of the company’s commitment to digitalisation. For instance, John Flannery, the newly appointed CEO of General Electric, on November 13, 2017 delivered a speech to the investors in which he insisted going digital is still the future of GE. “The main message from me about digital is a much more focused strategy. We are still deeply committed to it (digitalisation),” he said.


Step 5 – Gaining Traction with Lighthouse Projects

Now with the commitment, strategy, buy-in, and digital teams in place, it is time to actually start your digital projects.

Rather than embark on an all-in, high-stakes digitalisation project, you should aim for quick wins with lighthouse projects that can quickly yield payoffs in order to secure support from key stakeholders and maximise the overall transformation’s prospects for success.

For these first digital initiatives, to which areas should you direct your effort in order to achieve the biggest impacts? McKinsey’s five dimensions of digitalisation could provide companies with a framework to better decide where to make their digital investments.

Read more: Why most Digital Transformation Projects Fail

According to McKinsey, there are 5 dimensions of Digital Transformation that you can invest in:

  • Marketing and Distribution. For example: Retailers integrate Apple Pay or Samsung Pay. Companies apply data analytics to better understand customer insights.
  • Product and Services. For example: Taxi companies are launching their own taxi-hailing apps to compete with Uber, Grab, or Lyft. Tire manufacturers embed sensors to tires to collect information about their conditions and predict wear and tear.
  • Processes. For example: Companies adopt social collaboration tools like Yammer, Slack, Jira, etc.
  • Ecosystems. For example: Companies develop, test, and launch applications on cloud platforms like AWS, Azure or GCP (Google Cloud Platform).
  • Supply Chains. For example: Companies outsource their delivery services to ride-sharing companies. Retailers apply data analytics on thousands of SKUs to forecast demand.

According to McKinsey’s 2016 digital survey, the Marketing and Distribution dimension attracts the most investments from companies. It is followed by Product and Services, Processes, Ecosystems, and Supply Chains, respectively.

This does not necessarily mean you have to start your digitalisation journey with a customer-facing initiative. As McKinsey has noted, companies could probably be overlooking other dimensions of digitalisation, such as supply chains, that can yield significant savings and profits.

Video: CIO of Ferrari talks about their ERP implementation

At the end of the day, this step is all about prioritisation. Based on the strategy, available capabilities, resources, cost-benefit analysis, and discussions with key stakeholders, you need to come up with a list of changes you want to implement first.

Once you have decided on your first initiatives, you can leverage on-demand, low-cost technology to execute these initiatives.

As previously mentioned, technology is increasingly commoditised. Companies do not need to reinvent the wheel when it comes to digitalisation. Instead, they can buy or rent technologies as services from other digital giants such as Microsoft, Google, Apple, or Amazon. 

One simple example is when companies move their data to the cloud using file-hosting and sharing services like Microsoft OneDrive or Dropbox instead of having to store data in their own servers.

Another example is when Lalamove, the “Uber for businesses” start-up, commits to delivering goods anywhere in cities like Bangkok or Ho Chi Minh City in under 1 hour. Small local businesses there suddenly have access to an on-demand, quick delivery service without having to think of any aspect of logistics. All they need is a mobile app.

The implications are undoubtedly profound. Disruptors are not only transforming their industries but also paving the way for other disruptive businesses. Leveraging these available technologies and services could be the shortcut for your Digital Transformation journey, especially for the lighthouse projects.

It does not need to be a highly ambitious or complex initiative; for example, at Box’s new smart headquarter, employees can check into the conference rooms using Amazon Echo smart speakers with Alexa voice control application.

The success of lighthouse projects is a great way to help your transformation gain traction, but in order to make that success sustainable, there are other steps that you must take.

Discover the last 2 steps in our next post or subscribe to our Blog for the latest content about Digital Transformation.

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 Rick Yvanovich
 /Founder & CEO/

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