This article was originally written for and published in CEOWorld.
In a landscape marked by constantly evolving customer needs, supply chains, and competitive stakes, businesses face a critical imperative: they must expand and adapt to meet ever-changing conditions, and they must do so quickly. Anyone who tells you business transformation is easy was either not directly involved in the process, or flat-out delusional.
The world has changed for product companies whose success relies on fast development cycles, high product quality, and increased customer satisfaction. They are in the fight of their lives as revenue growth becomes increasingly reliant on addressing ever-changing buyer expectations and market conditions.
Increasingly, buyers are focusing on product outcomes rather than product specs. They research and buy across multiple sources and expect a consistent purchase experience across every channel. They want that consistent experience to continue over the product’s lifetime, thanks to connected devices, subscription models, and integrated experiences. Loyalty is more and more fleeting with consumers showing a propensity to switch brands when companies don’t get it right the first time.
Many product companies are struggling to meet these demands because their business strategy and supporting technology were built for a different time with different needs. So why don’t more companies embrace business transformation and change the status quo? Because it’s difficult.
Focusing on the fear of a bad outcome prevents companies from reaping huge benefits. Here are five steps to make an inevitably complex process a little more clear.
Step 1: Identify the Why
To identify the purpose of digital transformation initiatives, companies should align transformation goals and desired outcomes with specific business needs. This begins with assessing the current state of the organization and understanding the challenges your company faces in particular—such as your specific industry, market, and customer demands.
For example, a company struggling with existing supplier management has different needs than a company that wants to expand to new geographic markets. It may sound intuitive, but it’s surprising how many companies fail to identify a clear vision of what they want to be, and how they want to achieve it.
By analyzing existing processes and engaging stakeholders, companies can prioritize and align transformation goals with long-term corporate vision. It’s important to remain adaptable and iterative, as digital transformation is an ongoing journey that requires continuous refinement.
Companies that follow this approach will ensure digital transformation efforts are purposeful and geared toward driving growth, efficiency, and customer satisfaction.
Step 2: Assemble Your Power Team
Your transformation journey begins with assembling the right team. Critical roles to include:
- An Executive Sponsor. The primary liaison between senior leadership and the project team. This role ensures company alignment so the project team understands corporate expectations and goals, and executives understand the progress and timeline.
- A Champion. Someone who owns the overall project, runs the day-to-day deliverables, and is the key point of contact. This person is responsible for gathering requirements, identifying internal and external partners, project planning and strategy, and execution.
- Key Business Stakeholders. A cross-functional group that represents the interests of all impacted teams. Consisting of at least one representative from each team impacted by the project, this group provides valuable insight into departmental needs and how the project will affect each team. It’s important to identify a cross-section of business stakeholders, otherwise, you risk missing a significant benefit or negative impact to a particular team.
Choose wisely and act swiftly. Your team is the engine of your transformation, and every moment counts.
Step 3: Elevate IT to Strategic Leaders
In this era of digital transformation, IT is vital to business success. Technology has become a great enabler, but the options can be overwhelming. Get it right and you are riding Cloud 9. Get it wrong and you will fail.
That’s why business leaders and IT leaders need to partner from the very beginning. Once business leaders land on their desired goals, IT leaders can identify how tech stacks will help deliver them.
The best CIOs do this in a strategic way, asking business counterparts about current and future needs, desired outcomes, and gaps to fill. An IT leader who can bridge the gap between technology and business is worth their weight in gold. Identify this person early in your business transformation effort, and partner with them as closely as you can.
Step 4: Right-Size the Project
The scope of your project should align with your resources and ambitions. Whether you opt for a comprehensive ‘rip and replace’ overhaul or a smaller ‘ start anywhere, go anywhere’ project, set clear expectations and deliverables.
A rip and replace approach consists of removing current technology and replacing it with new solutions. This is the riskiest and costliest approach to transformation because many times it requires significant resources that would otherwise be focused on revenue growth. On the other hand, this is also the fastest way to reap the benefits of business transformation. The tradeoff is more short-term cost in exchange for earlier delivery of the upside benefits.
Most companies pursue this option simply because they have to. Sometimes it’s contractually driven, such as when a division is spun off from a larger company and is required to install a new tech stack. Other times, it’s because legacy technology is no longer meeting the needs of the business, and the pain is so great that a big change can no longer be put off.
It’s important to note if you are considering a legacy replacement because of increased complexities, data inconsistencies, and mounting maintenance costs, this is a warning sign that your existing system is already failing. The decision to overhaul the entire legacy infrastructure indicates that the current software is likely incompatible, inefficient, or unable to keep up with the organization’s evolving needs. And this will only get worse as the pace of change accelerates and the shortcomings of your existing tech stack begin to inflict real pain due to required workarounds or its flat-out inability to meet needs.
The ‘start anywhere, go anywhere’ approach works for companies that are aware of their need to change and are able to continually adopt a business transformation mindset that ensures they remain competitive over time. These companies opt for a smaller base project and evolve from there. Some benefits of this approach are:
- Fewer moving parts make the project easier to manage.
- Faster ROI, which frees up additional investment and resources for subsequent stages.
- Lessons learned and established best practices to prepare for the next evolution.
- Success begets success. If you ask a company to change everything, you’ll get resistance, But if you ask a company to update a process after you have successfully updated 3 other processes, it’ll be much easier to get a yes.
Remember, there’s no one-size-fits-all approach to transformation. Choose the path that suits your business, and do it now. The market won’t wait for you.
Step 5: Execute Your Digital Transformation Framework
Now that you’ve identified the why, assembled your team, recruited IT, and know the size of the project, you’re ready to execute the digital transformation project.
Ask yourself and your leadership team the following questions to serve as the compass for digital transformation efforts:
- What Is The Desired Outcome For The Customer, Patient, Or Buyer?
- What Products And Services Will Deliver That Desired Outcome?
- What Teams And People Are Needed To Deliver Those Products And Services?
- What Processes Are Needed To Support Those Teams?
- What Technology Is Needed To Make Those Processes A Reality?
Companies that follow this framework understand that technology is the enabler, not the end game. This concept holds for all business transformations. Ultimately, companies want to offer customers a better experience, grow revenue, and increase profit margins. If you start with those goals in mind, the path to business transformation success will be much easier.
Remember, business transformation is not a luxury; it’s a necessity in today’s fast-paced, ever-changing market. Don’t delay. Start your transformation journey today. The survival and success of your business depend on it.
Read real success stories with real results using the steps outlined above in the Proven Framework for Business Transformation ebook. Get your free copy.
