By Andre Fick, Consulting Director at Acceleration

Everyone is talking about digital transformation. What they mean varies wildly, as our Dr Thomas Oosthuizen discusses in this article on Cutting Through the Digital Transformation Hype and Jargon. The promised benefits are immense. Unfortunately, these have yet to be realised for many businesses. While organisations recognise that digital transformation is essential to keeping brand relevance and future competitiveness, they are struggling to unlock its true value.

What is digital transformation?

We can describe it as the transformation of business activities, processes, competencies and models to fully leverage the changes and opportunities of digital technologies and their impact, in a strategic way. It can fundamentally change, and optimise customer experience, operational processes and business models, touching every aspect of the business. With the widespread availability and adoption of powerful new digital technologies, it has become critical for organisations to incorporate these as they emerge.

Why does digital transformation not work in an organisation?

Ironically, the most powerful aspect of digital technology is often overlooked. These are not merely IT tools - they create a potent new strategic driver within an organisation, informing business objectives and directing methods and approaches.

• Lack of strategic integration

If digital aims are not aligned with overall business objectives, recognising their mutual influence on each other, there is a high risk of failure.

• Lack of holistic planning

Another oversight is to not consider the entire end-to-end process from the outset, and to implement digital technologies in piecemeal fashion. This diminishes their effectiveness and reduces them to mere tools.

• Poor user adoption and change management

A business needs an user change operating model designed specifically for a digitally-focused business transformation.

An approach for successful digital transformation

Knowing the issues that we need to address allows us to segment an effective digital transformation approach into corresponding focus areas.

Strategy definition

A steering team needs to define transformation strategy. This team must represent all key divisions and be managed from the top down.

A strategy-led transformation programme is required, starting with the customer experience. The team needs to examine interaction and channel touchpoints, and the overall customer experience offering. This will become the foundation for a customer-centric transformation.

Implementation planning

The next requirement is an overarching implementation plan that serves the defined strategic objectives.

In support of the strategy a company needs to develop a data model to provide a consistent approach to using data in the marketing context.

Various other blueprints are also required:

• Marketing Technology Reference Architecture – to set a common standard for the acquisition, restructuring or decommissioning of marketing-related technologies and applications.
• Marketing Data Governance Framework – to provide guidance on how data can be used and reduce the risk to the business.
• Digital Operating Model - to provide the business with a clear approach on how it should operate.

Change management

This is probably the biggest point of failure of transformation programmes. Successful digital transformation thus requires proper change management, driven by a multifunctional team.

All stakeholders must be given an appreciation of new processes, systems and technologies. Each person's role needs to be clearly defined, both at the practical level and in terms of purpose and value.

Getting it right

Marriott  used an especially effective change management approach, focused on using technology for engagement, learning and sharing.

Nespresso  is an excellent example of placing customers at the centre of a very successful digital transformation strategy.

These examples show that it can be a simple process - but not necessarily an easy one. Successful digital transformation needs to be embraced as a complete paradigm shift within organisation: fully thought through, meticulously planned and carefully implemented.