5 Pillars of Digital Transformation Strategy

What is Digital Transformation?

Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It's also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.

It's a cultural change that requires organizations to continually challenge the status quo, experiment often, and get comfortable with failure. This sometimes means walking away from long-standing business processes that companies were built upon in favor of relatively new practices that are still being defined.

There are five pillars that large corporations need to achieve success:

  • Vision

  • Customer understanding

  • Technology alignment

  • Metrics and measurement

  • Governance

There’s a great deal of information and learning I could share in each of these pillars—previous drafts of this article turned into a lengthy white paper!—but for now, we’ll just address a few high-level concepts.

1. Vision

Establishing your vision—and a strategy to achieve that vision—is the most challenging pillar. The vision needs to have buy-in from across the company, starting with the CEO. It’s critical to create the foundation by which everyone can agree to prioritize funding and resources, and identify any processes that need to be changed along the way. Digital strategy impacts legal, finance, and—in the case of changing business models—sales and quota structures. Digital transformation impacts everyone from IT and marketing to customer service and sales. Every company has dozens of touchpoints, hundreds of applications and backend systems, and hundreds of legacy processes. Remember, too, that in parallel to the work of establishing your vision, there’s an ongoing business to run and operate. Existing products and services drive immediate revenue targets and are required for companies to keep their commitments to the market.

Creating your vision and strategy starts with getting everyone in the same room. Yes. The same room. Or, in this case, maybe a Zoom meeting! It’s all about getting people to be a part of the thought process. There are different methodologies and workshops for driving out a vision and strategy; you could use Design Thinking or Innovation Games. Evaluate the macro and global trends that will impact your business, walk through a day in the life of your customer, figure out what will help you move forward and what’s holding you back. You’ll be surprised at the alignment that exists and the alignment that’s created by the nature of the face-to-face process. Work together to create a high-level roadmap that addresses near-term wins as well as a path to longer-term wins that begins now with a value that’s realized further out. Derive a mission statement for your digital transformation. Here’s an example: “Our mission is to get the right information, at the right time and place, to the right person (or machine).”

2. Customer understanding

Customers are at the core of every business’s digital transformation. As you create your roadmap and priorities, start with the customer in mind. The initial considerations that came out of your Vision discussion now need to be validated. Your roadmap should be prioritized based on outcomes—near-term wins with customers and cost savings—while working on the new business model. The business model will more than likely take longer to execute, but it needs to be done in parallel.

Begin by addressing customer pain points. Do a detailed analysis of your business. Collect call center data, net promoter scores (NPS) and verbatims, analytics from online and physical stores, and areas with high or increasing costs in your business, like services and manufacturing. Evaluating, correlating, and understanding the pain points should drive your priority. Use your customer advisory councils to correlate and test your findings.

One example might include looking at NPS and verbatims and highlighting something as simple as “we want to be kept informed of the status.” A longer-term pain point to solve might be cycle-time reduction, while a near-term solution could be as simple as notifying a customer about an order status.

Once you’ve identified both the quick wins and the priority areas that will take more time and investment, it’s important to model the new processes and experience. A journey map will give you a visual interpretation of the overall story. It’s the view from one individual’s perspective of their relationship with