Digital Transformation Leading Practices
Best Practices in Digital Transformation: A Tactical Approach
Digital Transformation Leading Practices
Becoming nearly universal across organizations looking to improve efficiency, delivery and competitiveness, digital transformation is underway in some form in 90% of organizations worldwide, according to a recent survey.
The main driver for digitalization? Customer standards and efficiency. By using digital technology to modify or create new business processes, customer experiences or employee engagement, you can reimagine how you do business to meet and exceed organizational goals.
While there are no set digital transformation standards, as procedures, planning and tool usage may vary, the following are several leading digital transformation practices to consider.
Digital Transformation Procedures
Digital transformation procedures refer to the steps, actions and governance activities that enable organizations to shift to a “digital first” and, in some cases, an “AI first” approach. While the frameworks organizations adopt to drive this transformation may vary, most follow an iterative, cross-functional approach.
Discovery
Discovery is the first phase of digital transformation. It enables you and your team to understand the current state of the organization better and define what you want digital transformation to achieve. Each defined objective should be mapped to a business goal.
Next, review the organization’s current technology state to identify gaps. Take a deep dive by interviewing and researching what competitors are implementing. Lastly, define the metrics that indicate success.
Planning
Once you define your strategic objectives, turn them into actionable plans. First, refine the objectives by adding more business priorities, such as increasing data access or reducing risk. Afterward, all objectives should then be ranked and prioritized. For each objective, detail the resources and technology that will be required to implement and deliver.
Plan your deliveries by adding start dates, milestones and end dates, and by sequencing the prioritized deliverables. Consider leveraging a digital transformation template, such as a project plan, to outline all the steps and deliverables in an agile manner.
Governance
Every project needs a named owner and the team members responsible for delivery. Consider creating a leadership committee to oversee progress and ensure that all necessary people and resources are fully engaged. As a part of the plan for each project, dates should be included to provide updates to the leadership committee.
Another critical aspect of governance is to identify risks and dependencies, along with contingency plans for any delays. Review all risks regularly with the leadership committee.
Design/Redesign
Before implementing any technology, carefully review the processes to be transformed, identifying current bottlenecks and manual steps. Emphasize where automation and integration should take place. Next, choose the right technology that will support your design changes, considering effectiveness, interoperability and scalability.
Proceed with development according to the project plan, in an agile manner, including prototyping, testing and user feedback. Ensure that all architectural principles are maintained for operational consistency and security.
Implementation/Piloting
Following the project plan, implementation and deployments should be in manageable phases and should be immediately followed by a pilot with users. Continuous communication, user engagement and training are essential to ensure adoption.
Lastly, create KPIs that clearly show data-driven progress toward business and organizational objectives. Review these regularly with the leadership committee, and more importantly, with all employees.
Digital Transformation Tools
Today’s digital transformation tools enable your organization to automate workflows and processes to vastly improve your data management capabilities and improve the resiliency of your systems. More importantly, they enable your organization to deliver the projects in your digital transformation plan successfully. Here are a few types to consider:
No-Code and Low-Code Platforms
Although low-code and no-code tools have been around for decades, with tools such as Visual Basic and platforms such as WordPress, improvements in drag-and-drop interfaces and reusable components have enabled organizations to integrate functions and launch capabilities faster. In the cloud, both the business and IT can collaborate in real time to ensure that business use cases are delivered on time.
Enterprise Integration Tools
Enterprise integration tools typically use APIs to expose and access application functions and to connect to enterprise assets such as software and data. These tools serve several vital functions:
Connect systems — Integrate both on-prem and cloud applications, such as CRMs and ERPs, regardless of the underlying technology, to share workflow, processes and data.
Transform data — Translate data from one format to another so systems can understand information from the interconnected applications and systems.
Messaging — Communicate between applications, while ensuring network integrity to coordinate activity between services.
Security enforcement — Enforce security policies and rules, such as encryption and digital signatures, to protect data as it moves between systems.
AI Workflow Automation Tools
Recent advancements in AI-powered applications, tools, and models have given those companies undergoing digital transformation the ability to leverage automated platforms and advanced digital transformation templates. One example of automation is when generative AI leverages business process analysis (BPA) strategy to identify ways to improve workflows and outcomes. The goal is to reduce inefficiencies and improve the customer experience, as well as the experience for employees and business partners.
Data Cloud Platforms
A data cloud platform is a centralized platform for storing, integrating and managing large amounts of data from various sources. The architecture of a data cloud enables the proper handling of both structured and unstructured data, enabling real-time access and analysis by applications and systems across your organization. A good example of using a data cloud would be to store various types of customer data (from disparate systems) to create a cohesive customer profile.
Digital Transformation Regulations
When defining objectives for your organization’s digital transformation, be aware of several regulations, particularly those related to data protection and privacy.
General Data Protection Regulation (GDPR) — a European Union law that governs how organizations process, safeguard and transfer the personal data of people living in the EU and the EEA (European Economic Area). If your organization handles EU or EEA data, ensure that your technical architecture and processes comply with the requirements of the GDPR.
California Consumer Privacy Act (CCPA) — The CCPA is a state law that grants California residents rights and control over their personal information collected by businesses. Become familiar with the CCPA by understanding consumer rights to inform any planned changes to processes and systems as part of your digital transformation.
Industry-specific regulations — Several industry-specific federal laws may also apply to your organization’s digital transformation program: HIPAA and the Graham-Leach-Bliley Act (GLBA). HIPAA sets national standards for protecting sensitive health information, known as PHI, while the GLBA requires financial institutions to maintain the confidentiality and security of consumers’ non-public personal information.
Digital Transformation Leading Practices
Delivering on a digital transformation strategy requires that your organization has strong teams, capabilities and a motivation to change. Below are several capabilities your organization should have in place:
Have a Clear Strategy
Focus your transformation on specific domains — such as functional areas, processes or customer engagement — that generate significant value for the business. For each functional area, start by detailing a pilot project to demonstrate the value, specifying the outcome (e.g., increased speed, increased revenue or increased engagement). Prioritize each functional area, and detail all resources needed to deliver each pilot project before approval.
Using this approach, a road map can be created to detail additional initiatives once the pilot projects are completed. Consider creating or leveraging a digital transformation road map template to help you distill information and create aligned projects.
Leverage Distributed Technology
Technology that is used throughout the organization should enable teams to innovate independently. To design, develop and deliver on the strategic road map, teams should be able to access the data, applications and tools they need when they need them.
A distributed environment can include the use of APIs to both engage and disengage applications, the use of developer tooling to automate and streamline the software development lifecycle, and the capability to automatically provision infrastructure in the cloud to enable iterative deployment.
Have Current, Clean Data
Access to accurate, single-source data — “a single version of the truth” — is crucial to any successful digital transformation. The data architecture framework used in your organization should enable easy access for all teams and define how all data will be continuously assessed and updated as needed. Additionally, all data must be packaged so it can be easily consumed by all applications that require the use of data.
A well-defined data governance structure should be established to oversee this data management function.
Culturally Embrace Change Management
Traditionally, technology adoption was a part of a linear software development lifecycle that included user testing, feedback and training. Since this was not very timely, the business did not necessarily get the value it was looking for. As a result, adoption rates were often lower.
Digital transformation projects follow an iterative process to deliver value more quickly, and resources are identified (when creating the strategic roadmap) to fully support the solutions the so it can scale as needed. Additionally, continuous communication and user feedback make users more willing to embrace changes.
Learn more about digital transformation by exploring these related resources on KnowledgeLeader:
What Is Digital Transformation?
Digital Transformation Cycle in Business Landscape: The Managerial Perspective