By now, most business leaders have taken the initial steps to set their digital transformation (DX) strategies in motion. DX has quickly become an imperative for organizations across all industries that are aiming to stay relevant in a tech-driven world. In fact, 89% of all companies have now adopted a digital-first business strategy or plan to do so in the near future, and global spending on DX is predicted to increase to $2.9 trillion by 2025.
On the flip side, businesses that neglect DX initiatives have zero chance of being an upper quartile business in their industries within the next 10 years. Not only that, but they may not be around much longer.
While many are making significant investments in digital strategies, the real challenge lies in ensuring these transformations offer lasting benefits rather than quick fixes. According to a recent survey from consulting firm McKinsey, “Organizations capture less than one-third of the value that [they] expected to see from recent digital transformation and initiatives,” proving that the majority of DX strategies are not built to last. To this end, how can you determine if your digital transformation strategy is built for the long haul? Let’s dive in.
The foundations of sustainable digital transformation
The initial momentum of a digital transformation (DX) plan can quickly fade if it isn’t built on a solid foundation. To create the structure of a lasting strategy, there are critical steps that must be addressed before you begin diving in. When we work with our clients to build DX strategies that can withstand the most rapidly changing environments, we always begin with a discovery phase. This allows us to get to the heart of the largest pain points and most rewarding opportunities. Here are some key things that business leaders should aim to uncover and plan for during a DX-focused discovery:
- Clear objectives: Before creating a map, businesses must have a clear vision and measurable goals. These become the guiding anchors for the path to digital maturity.
- Employee engagement: People talk a lot about customer engagement (as they should!) but often overlook an even more critical engagement touchpoint; that of their employees. Employees must fully understand and support company transformation initiatives in order for the strategy to be successful.
- Customer experience (CX): During the discovery phase, we begin to learn the current engagement level, sentiment, and retention rate of customers. Along with employee buy-in, this critical component is foundational to the longevity of a digital transformation strategy.
- Adaptability: With a rapidly evolving digital landscape, transformations must be built to easily and quickly evolve. A rigid strategy might serve as a temporary bandage to address immediate concerns, but will likely soon become obsolete. Sustainable digital transformation is adaptable and ready to pivot at a moment’s notice.
- Scalability: Can your digital systems and processes scale with your expected business growth and market expansion? A transformation that doesn’t account for scaling will inevitably face bottlenecks, ultimately negating its benefits.
Customer-centric digital transformation required
There’s no denying the hyper-competitive nature of today’s marketplace. Businesses are operating in uncharted territory and they must differentiate more than ever in order to both achieve and sustain customer engagement. The emotional connection and interactions a customer has with your brand will determine whether or not they will become loyal, long-term buyers. Engaged customers, with their existing affinity for the brand, are more likely to try out new offerings and become early adopters, amplifying the success rate of innovative endeavors.
To truly leverage the interplay between customer engagement and innovation, companies must invest in several core tech capabilities. The top digital leaders are more aggressive when it comes to adopting automated processes. Engaging customers fuels innovation, and conversely, innovative practices can enhance engagement. Business leaders who recognize this connection and make it a part of their overarching DX strategy will not only thrive but set new benchmarks in their respective industries.
From streamlined operations and cost savings to enhanced customer experiences and competitive advantages, digital transformation — when thoughtfully and meticulously planned and executed — should provide long-lasting benefits that are designed to adapt to an ever-evolving landscape. However, to ensure these benefits aren’t fleeting, organizations need a digital transformation strategy that’s not just forward-thinking but is also sustainable, durable, and built for the long haul.