The COVID-19 pandemic has reignited interest in digital transformation. In fact, a recent survey shows that 80% of organisations plan to accelerate their digital agendas in response to the pandemic.1 Given that the topic has been around for over a decade, why is it that companies need to accelerate their agendas at all?
Our work across sectors has found that many organisations deprioritised key elements of their digital portfolio, challenged by cost or the scale of transformation. Others have not achieved their desired business outcomes, improving digital capability but missing the mark when it comes to truly transforming. In fact, another study found that 70% of digital transformation programmes did not meet their strategic goals.2 Furthermore, the pandemic and the related causal shift in how people interact with businesses has demonstrated that there is more work to be done to fully embed and exploit digital business and service models. So, why is this and how can it be addressed?
Deploy the right digital strategy
We believe the issue is foundational. Many organisations have not deployed the right digital strategies to deliver successful transformation outcomes. Digital strategies of the past are unsuitable to meet the evolving demands of today’s external market forces and the fast pace of technological innovation. With company leaders now readdressing their digital agendas, they should design an adaptive digital strategy, not as a means of dictating ‘the digital answer’, but to manage the process by which digital solutions evolve to achieve a more optimum result.
Here we explore our top suggestions for harnessing the right digital strategy.
1. Embrace a test-and-learn approach to digital strategy, rather than one and done
Embrace continuous improvement as the mindset and approach to your digital transformation. Designing traditional five-year strategies will set you up to fail. The investment it requires will create significant financial hurdles and the strategy itself will become outdated due to the advent of new technology within that time.
Digital transformation lies on a longstanding continuum of technologically driven change. Organisations are much more adept at iterative improvement than ‘big bang’ approaches. Your process will inevitably mean two steps forward and one step back. Embrace it, learn from it and make sure your digital strategy can keep up.
2. Recognise that digitisation is not transformation – your digital strategy should be addressing your biggest challenges
Ensure your organisation is tackling its most pressing challenges. From our experience, while some organisations attempt to tackle too much in one go, others settle for tactical solutions, where they digitise instead of transform. Examples include the addition of digital channels or glossy front-end applications, both done without addressing key customer pain points or redesigning workflows for the digital age.
3. Balance challenge with ruthless pragmatism to achieve momentum and create value
Digital strategies are forward thinking and challenging by nature. Even after prioritising the highest-impact projects, the delivery can be insurmountable or risk disrupting focus on your revenue-earning operations. This is where pragmatism can help. Taking on an achievable agenda can help build momentum for your change journey. Consider minimum viable products (MVPs) or intermediate product or service offerings to break up challenges. Not waiting for final products will also help to accelerate value creation from your digital transformation.
4. Ensure you have a simple business case for your digital transformation
When setting digital strategies, some of the most dreaded activities are business cases. Our experience indicates that transformation programmes should simplify benefits assessment against their most pressing challenges. Any further benefit is a bonus.
Additionally, accept that some projects will not have net positive benefits on their own, especially when addressing significant technical debt. This should not be a problem if your overarching transformation programme is net positive.
How do organisations know they have the right strategy?
We view digital strategy as a spark that fuels your transformation engine. Similar to a car engine, organisations require a spark both at the beginning to build momentum, and throughout the journey to keep on moving. Quarterly or semi-annual reviews of your digital strategy should be baked into your transformation approach.
As we connect with clients to assess the suitability of their digital strategies, we tend to look out for the following problem markers.
- A disproportionate amount of time and budget being placed on digital design as opposed to delivery, indicating the development of long-term strategies that may never see the light of day.
- A lack of consistency by leadership in articulating the organisation’s digital vision and objectives, indicating either an incoherent digital strategy or underlying business case.
- The digital agenda is heavily technology-led, indicating risk to delivering business value.
- Significant effort is placed in governance and reporting as opposed to supporting change, indicating a lack of sufficient prioritisation.
- The digital strategy is not regularly reviewed and adapted, indicating a potential risk when it comes to maintaining market relevance and acknowledging lessons learnt.
Our adaptive digital strategy approach can help you navigate your digital choices and be flexed to suit your organisation’s needs. Contact us today to see how we can help.