Are you Planning to Execute a Digital Transformation Strategy? — Here’s what you need to know.
Digital transformation strategy has been made, investments allocated, budgets approved, and management has given a formal go-ahead for executing a plan that is expected to make a radical change to business. It is time now for plans to move to reality.
The pace of digital transformation is increasing at a phenomenal rate. Technology has played a key role in helping some of the businesses survive these nearly one and half years of disruption. While Pandemic will subside, digital transformation is here to stay. So, it is highly likely that most will be in a digital transformation initiative. Transformation can be daunting but an early understanding of the key drivers goes a long way in delivering a successful transformation project. Three key areas are essential to be aware of before delving into the execution phase.
Understanding Management’s Strategic objectives
Large Transformation projects are driven top-down. It is therefore essential to understand the business objectives behind the proposed transformation. The objectives handed down to the execution team are usually at a high level. It is executing teams’ task to convert them to measurable Performance Indicators (KPIs). Management/Board is a distinct entity. But Individual stakeholders in the board can have alternate or at worst contradicting objectives. Setting early success criteria helps set expectations right. A board sponsor who is the mentor for the Project is highly desirable.
Understanding ROI calculations — Details can be enlightening
Often Boards make decisions on investing in any project based on Return of Investment (ROI) calculations. A typical ROI calculation has a cost and benefit components. While cost components are easy to understand, it is the benefit assumptions that require a deeper understanding. They are an indicator of Processes and departments that are expected to be impacted by the transformation. ROI calculations can give an insight into what the expectations are from the Transformation project.
Understanding Technology — Nothing is foolproof.
Technology is an underlying layer in any digital transformation. It may be relatively easy to grasp the required change in processes, Organization, Data or any combination of all these elements. But technology is an external factor that’s being introduced in the process. Experience within the organization may be limited. The understanding underlying technology that will drive the digital transformation is critical. More importantly, no technology is foolproof, understanding its constraints, accuracy and points of failure is worth the time spent.
Digital Transformation in any organization is a complex task involving Technology, Processes, Data and Organization change. The transformation journey will be fraught with risks and challenges. Those can be effectively project managed with the right setup. But clarity on Objectives, ROI and Technology are the foundations for the rest to come.