Defining Digital Transformation and Making a Plan to Improve
If you’re not familiar with the term “digital transformation,” you may already know the concept by a different name. Other phrases may ring a bell, such as:
- Taking advantage of digital solutions
- Going paperless
- Changing from physical to online/cloud-based systems
- Changing the way customers access your business
- Digitizing and unifying each aspect of your business
- Automating functions with AI and technology
- Using technology to stay ahead of competition
- Using technology to create a more secure business framework
Think of the term “digital transformation” as shorthand for the endless ways that you can use digital technologies to evolve your business. While today’s SMBs are tuned into the digital revolution and know that digital technology is impacting their businesses and industries, what interrupts SMB adoption is often lack of a well-defined digital business strategy.
Each business owner will have their own reasons for converting to a digital model. From improving decision-making to improving employee productivity, many SMBs cite several reasons for why they’re migrating to the digital life.
Defining Your Digital Transformation Strategy
As part of the demystification of digital transformation, it’s important to note that making a change doesn’t require you to move every process to the cloud, nor does it require you to invest millions of dollars in new tech. The most effective digital transformations leverage existing infrastructure and find maximum value in any improvement.
Digital transformation is not an all-or-nothing concept. Many organizations take a multi-year journey, tackling the initiatives they believe are most critical right away and creating a road map to accomplish the rest within a reasonable budget that works for their business.
What’s important for defining your transformation strategy is what your company can gain from a shift. Begin by:
- Identifying what specifically needs to change or what can be improved
- Researching a new solution
- Performing a cost/benefit analysis of the investment required to make the change
- Budgeting for the training and implementation period
- Making a plan for implementation and training
There you have it, a definition of your digital transformation that can be put into an email and approved. Now let’s talk about how to sell the idea to your higher ups.
How to Pitch a Transformation to Your Boss?
Adopting a technology-forward business model sounds like a lot of effort and risk up front, especially to your boss who must keep the company profitable and mitigate stakeholder concerns.
When it comes to proposing a company-wide change that impacts every team member in some way, you need to think about long-term gain.
To communicate the benefits of long-term gain you have to play a long-term game.
You need data, projections and reports to assure your boss the change is going to be profitable and that it’s going to stick.
Make a business case. Look ahead and be strategic but let the numbers do the talking. And whatever you do, make sure the numbers add up. Include business metrics as well as financial data, calculations for when your transformation will start being profitable and timelines for every obvious facet.
Once you have definitive figures for your plan it’s time to prepare your presentation.
When you’re speaking about a concept that’s relatively new, you need to avoid jargon. Not all senior-level team members are “tech people.” Help them understand what’s happening without going into unnecessary levels of detail. Metaphors are your friends.
To supplement your argument, involve senior stakeholders who can bring additional ideas and considerations to strengthen your presentation.
So, what does a bulletproof presentation include?
SMB Resources for Digital Transformation
How are SMBs planning to transform these different aspects of their businesses? It depends on the what areas you’re interested in developing. For instance, if adding a new sales channel and improving new employee recruitment are top areas in which you plan to invest, there are likely existing solutions to automate repetitive tasks and improve decision-making for you.
However, given budget and resource constraints, SMBs still need to plan carefully to get digital transformation initiatives off the ground, whether you’re investing a totally new solution or augmenting an existing one.
On the budgeting front, 58% of SMBs plan to fund digital transformation initiatives from existing IT budgets, and 34% say they don’t have enough money to adequately fund their goals.
Other key obstacles that SMBs need help to overcome involve integrating new technologies with older ones; lack of goal-setting; lack of IT skills/staff; and determining what solutions will best help to achieve goals.
Our technology roadmap will help you identify processes that are lagging or could use improvement.
How Do You Measure Success With a Digital Transformation?
Like any business strategy, your shift to digital should account for your bigger business plan.
A digital transformation will completely shift the way you do business and thus to measure success, you need to look beyond traditional KPIs and focus on digital metrics.
To truly benefit from a transformation, you need to develop the capabilities to track them results real-time and provide you with a plan on how to capitalize on them, including how to:
- Establish the appropriate technological infrastructure, i.e., algorithms, databases and data visualization to measure business metrics.
- Set plans to act based on the insights gained from analyses of digital data.
- Create adaptable dashboards that can display real-time information for all essential company and customer metrics.
At a process level, you need to create digital KPIs that you can measure and manage in your daily operations.
How to Create Digital KPIs
Since all transformations are unique, your goals and metrics need to be unique as well.
To create a digital KPI, ask these 5 key questions:
- What is being measured? (An example might be the percentage of customer interactions that are virtual/digital)
- Where are we today?
- What is our target goal?
- What is our desired business outcome/benefit? (For example, 50% better customer outcomes and 20% lower cost)
- What is our balance point? (I.e., where do you draw the line)
The balance point is the threshold that it makes sense for your company to be digital. Out of 100%, how digital does your company need to be to remain competitive?
While there are different tactics your business could employ for your digital transformation, there is one common denominator for what drives a digital strategy and that’s a better experience for your customer.
The companies that are successful in digital are those who put the customer at the center of everything they do. No matter how the technology continues to evolve, the brands that focus on the customer will know the best ways to transform moving forward.
Digital transformation projects fail when they're too ambitious or too shortsighted.
What most companies don’t realize is that eventually all processes will be digital. But you need to think about what changes are possible for your company and which are necessary now.
For a SMB that can’t afford to fully chop, flip and reinvent all processes, the trick is to create plans for one transformation at a time with the goal of making them work with future changes. Your transformation should accord to the flexibility of your business – its readiness to use new solutions and the teams you can put in place to manage it.
That said, don’t bite off more than you can chew with your first transformation.
Since digital transformation is a long-term game, to effectively instill the value of transformation, you need to involve the entire company in the process, not just leadership and IT.
The most effective way to achieve company-wide change is by instituting dedicated groups devoted to digital transformation, planning, executing and monitoring.
The Next Steps to Your Digital Transformation
Transformations can be divided into groups based on where you’re instituting them and what your business stands to gain from execution:
Free Software to Enable Your Digital Transformation for SMBs
From free file sharing websites to integrated blockchain technology, there are thousands of software systems and technologies you can introduce to make the shift to digital processes.
Since SMBs don’t have the resources enterprise-level organizations use to invest in digital transformation, we’ve assembled a roundup of free resources to help pave the way for your digital business.
Get Started Today
If you're ready to commit to digital transformation, contact Switchfast today. We've helped dozens of small- and mid-sized businesses plan and execute transformations, big and small, to improve productivity and make the most of their technology investments.
We'll work together to map your existing technology, identify what updates can be most useful to your company, your employees and most of all – your customers.