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The digital era has ushered in a time of unprecedented opportunity, where both companies and customer expectations evolve at warp speed. At the heart of this change lies the digital transformation strategy.
From artificial intelligence (AI) to big data, digital transformation does not just leverage the latest tools, but redefines how we do business and deliver value to customers. A 2024 study by McKinsey states, for example, that digital leaders in the insurance industry have experienced growth that is 6 times higher than non-digitized companies.
However, according to Boston Consulting Group (BCG), only about 30% of companies are able to successfully navigate their digital transformation.
What distinguishes a business that embraces and propels digital innovation from one that is unable to tap into digital transformation success?
Silverskills breaks it down with insights from our digital transformation experts.
Around the globe, companies are rewiring their processes to stay competitive in our new digital world. By 2025, the global market for digital transformation is predicted to grow to $1,009.8 billion.
Evidence suggests that the correct digital transformation strategy drives outperformance. For example, according to McKinsey, digital leaders in retail banking saw a yearly Total Shareholder Return (TSR) of 8%, as opposed to 5% for those who did not embrace digitization.
Furthermore, Deloitte states in a report that the right digital transformation strategy can generate up to $1.25 trillion across Fortune 500 companies in market capitalization. However, the wrong strategy can weaken market value by as much as $1.5 trillion.
This indicates a need for well-thought-out and measured digital transformation solutions, instead of treating digitization as a trend that does not require a multifaceted plan.
With the correct digitalization strategy, businesses can reap rewards including increased operational efficiency, meeting changing customer expectations, improved product quality, reduced product development costs, and new revenue streams.
Is your business strategy – including its plans for the upcoming years and core business goals – still relevant in today’s digital landscape? Challenging your current business strategy may be a necessary first step in the digitization journey.
Before embarking on a digital transformation journey, it is crucial to have a deep understanding of your organization’s current digital capabilities.
What are your strengths and weaknesses in terms of digital adoption? What does the digital landscape in your industry look like, and what trends are poised to reshape the competitive landscape?
For instance, if you are in one of the top industries for digitization – service, financial services, and healthcare, according to IDG – you may have a greater need for digital transformation to remain competitive.
Conducting a comprehensive assessment sets the stage for a well-informed strategy.
Your digital transformation should serve specific and well-defined organizational objectives. What are your aspirations for the transformation? Are you seeking to boost operational efficiency, elevate customer experiences, expand into new markets, or achieve a combination of these goals?
Clearly articulating your objectives is the compass that will guide this journey.
A digital transformation strategy is only as effective as the roadmap that brings it to life. It is imperative to outline the steps required to meet your DT goals, complete with timelines, milestones, and specific initiatives.
Resource allocation should be a top priority at this point. This is where you ensure that the necessary funding, talent, and technology are available to execute each phase of the transformation.
To navigate the complexities of digital transformation, we asked our digital transformation experts what they feel are the fundamental imperatives for success.
These best practices serve as the cornerstone of a structured and effective approach to your digital transformation strategy.
Digital transformation is a multidisciplinary endeavor that needs collaboration across various stakeholders, including IT, marketing, operations, and finance. It is especially important to involve the C-suite and board members, as their decisions will play a key role in your digitalization strategy.
Engaging stakeholders early in the planning and implementation process is critical for securing buy-in and alignment across the organization.
When stakeholders feel included from the outset, they are more likely to embrace the change and actively contribute to its success.
Ensuring stakeholder alignment is largely dependent on how clearly you are able to communicate.
Develop a robust communication plan that is transparent and consistent. It should clearly define your objectives and the various digital initiatives including their timelines, purpose, scope, and expected outcomes.
Regularly update your stakeholders on the progress including any successes, challenges and the roadmap ahead.
The modern digital landscape is a dynamic and ever-shifting terrain, where change is not the exception but the norm.
Organizations that are resolutely committed to digital transformation must demonstrate a remarkable capacity to remain nimble in the face of constant technological flux.
Look out for emerging trends and ensure you cultivate a culture that is open to continuously learning and adapting.
The multifaceted nature of digital transformation necessitates the need to bring together a variety of skills, experience, and deep expertise.
Make sure that you identify and nurture your in-house talent with upskilling and training while also augmenting these capabilities with external experts who bring a fresh perspective and specialized knowledge. Conducting a skills audit may be useful for this purpose.
While digital know-how is essential, you should also look for people who can manage and lead change effectively – resistance to change is one of the most significant challenges to digital transformation success.
It is important to track your progress and measure the results of your digital transformation efforts so that you can see what is working and what is not.
Implement key performance indicators (KPIs) to monitor progress and make informed adjustments as needed. Furthermore, foster a culture of accountability with transparent reporting of results.
When stakeholders can see the impact of digital transformation efforts, it not only builds trust but also encourages collective ownership.
Eventually, digital transformation is a journey. It is unlikely to ever be a destination. It is a process of change that requires ongoing commitment from the entire organization.
By following the steps outlined above, you can create a successful digital transformation strategy that will help your business thrive in the digital age.
Equally important are the people who execute this strategy – the human side of digital transformation. A culture of innovation and continuous improvement is needed, where every member of the organization is aligned, motivated, and empowered to contribute to a collective vision of digital excellence.
Silverskills is a digital transformation company that can help you execute your strategy with the tools and approach tailored to your business needs, unlocking your revenue potential.
Talk to our team to learn how we can help you build your digital roadmap with effective governance and customized solutions.
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