Starting business digitisation is the first step that will determine its flow and success. For this reason, it’s important to choose the right approach to digital transformation, and in this article we aim to help you with that.
It’s no longer a choice for businesses to decide whether to pursue digital transformation — it’s essential to stay competitive in any modern industry. However, it’s never too late to begin. So, if you’re only now looking to embrace it fully, you’re not hopelessly behind. In fact, you have the advantage of following well-established paths. With several proven approaches, the first step towards transforming your business is choosing the one that’s right for you.
This article examines the existing established approaches and the factors that should influence your decisions. However, remember that our recommendations are general, and each business is unique. If you would like a more detailed assessment tailored to your needs, please get in touch.
Digital maturity is assessed by examining how effectively you incorporate digital technologies across your organisation. Various areas have distinct metrics and benchmarks to help evaluate your company’s current position.
There are various strategies and approaches to assessing digital maturity, and if possible, it’s best to hire a specialist. However, if you need a quick and somewhat superficial report, you can assess it yourself by referencing industry-best quantitative metrics for each area and comparing them to your current data.
At this stage, digital transformation is quite well defined, so there are fundamental concepts you need to understand before starting. Recognising and understanding these will help you choose the approach that best suits your business setup, current circumstances, and future ambitions.
There are seven core areas of digital transformation: customer experience (CX), operational processes, business models, workforce enablement, technology infrastructure, data & analytics, and culture. You need to address all these areas, as, despite seeming very different, they are all closely connected. The challenge is deciding what to prioritise. Ideally, you should progress in all of them simultaneously, but this is a complex task most companies lack the skills or resources for. Therefore, start by breaking each area into smaller categories, which will help you plan your journey in a organised and controlled manner. For example, for operational processes, focus on harnessing real-time data and analytics. Simultaneously, you can aim to foster an agile and innovative mindset within the culture area, making changes easier to implement by enhancing your team’s adaptability.
The right way to approach digital transformation is through gradual, step-by-step changes in the seven core areas. Breaking them into smaller parts helps prevent feeling overwhelmed, especially when juggling multiple tasks. Additionally, progressing more slowly across all areas makes adaptations easier and creates a smoother transition. However, while this is our recommendation, you should ultimately follow a pace that best suits your business.
With digital transformation being an unavoidable step for every business, there are now eight clearly defined strategies. However, two of them are the most prevalent because they suit the majority of organisations: the bottom-up approach and the technology-driven approach. The latter is quite straightforward - it emphasises enhancing capabilities through new tech tools, and although it is more expensive, it can deliver very quick returns on investment.
The bottom-up approach is somewhat more complex as it starts with individual departments or employees. Instead of aiming to transform the entire company at once, you concentrate on specific executives within the teams to be the main adopters of the core area approach. If the process proves successful in its initial phases, you generally begin expanding it to other departments as well. The aim is to gradually bring all teams to the finish line, removing silos and centralising them in a single location.
As the name ‘digital transformation’ suggests, you will need quite a few new digital solutions to support your business's new setup. But with the market so vast and full of options, finding the right tools is challenging. However, it’s still part of figuring out the correct approach, so let’s discuss it.
Even if you’re only beginning your digital transformation journey, you most certainly use some type of digital tool to assist you in your daily tasks. While it might be tempting to discard your old systems when adopting a new approach, hold your horses. If the tool is doing its job and you are generally satisfied with it, your strategy for digital transformation should revolve around it. Consider it a starting point and build upon it, as it provides a solid foundation and heaps of historical data crucial for further optimisation.
One of the key requirements for successful business digitisation is an easily accessible centralised hub. Every new tool you introduce should integrate seamlessly with your existing systems. This approach reduces departmental siloes, making collectively recorded data available to all, which can lead to unexpected opportunities when viewed from different contexts and processed with various perspectives.
Having big ambitions is wonderful, but when selecting the right approach to digital transformation, you must balance them with a touch of realism. Specifically, consider how much financial resources you can allocate and what sustainable scalability means for you. You will need to invest, especially during the early stages, in digital solutions. Since most of these run on a subscription basis, you should ensure you have the funds to cover the entire duration of your contracts. Now, let’s discuss why scaling too quickly might not be advisable.
Scalability is a buzzword we often hear, associated with the idea that faster and larger means better. However, scaling too quickly and excessively can often lead to a business's downfall, as it lacks the opportunity to adapt. If you’ve just undergone digital transformation, rapid scaling can be inefficient and even harmful to your reputation, since you won’t have even a moment to adjust. Therefore, scalability should also be planned carefully and pursued gradually.
Finally, although digital transformation focuses on adopting technology to improve your company’s efficiency, your live employees remain an irreplaceable part of your success. It is therefore crucial that they are aligned and willing to embrace digital transformation. However, it is not always smooth sailing.
One thing to remember is that no matter how thoroughly researched and well-suited your approach to digital transformation is, there’s always a risk of encountering internal opposition. This is especially true with long-serving staff who are accustomed to doing things a certain way and may not see the need for change in their daily routines.
Enforcing rules won’t be effective. It will either foster resentment or cause your workers to revert to their old ways secretly, which could skew the data and prevent you from reaching the KPIs you aim for. The best approach is to highlight the benefits of digital transformation to your employees on an individual basis, rather than focusing solely on what it can do for the business. Consider organising some training sessions to demonstrate how the new approach directly addresses their daily challenges and how it can assist them in their tasks. Also, remain receptive to their concerns and complaints, and collaborate with them to resolve any issues. Most people oppose change because it causes inconvenience. However, if you can show them the opposite, they will not only eventually accept it but may also deliver results that surpass your expectations.
Among the eight core methods, selecting the right approach to digital transformation is challenging. However, the most common and recommended ones are the bottom-up and technology-driven approaches, as they tend to be the smoothest, particularly when following a linear timeline for transforming several core areas at once. The key is to break them into smaller segments. This prevents you from becoming overwhelmed by tackling multiple aspects of the business simultaneously and allows you to plan at a pace that suits your organisation.
Even if you weren’t actively pursuing digital transformation before, it’s likely you are already using digital tools. These can serve as a great starting point for your gradual transition and help shape your overall approach, as they already contain historical data, so don’t rush to discard them. Additionally, adjust your mindset regarding scalability - can you afford to scale quickly, or will you need a more gradual growth? And finally, communicate the benefits of digitisation to your teams on a personalised level to manage internal resistance and facilitate their gradual adaptation. Ultimately, there are no wrong approaches — only the right one for you.
Wondering which one it is? Let us advise you.