Building a Successful Digital Transformation Roadmap
Laying the Foundation for Digital Success
Digital transformation will be a top priority for boardroom executives during 2016. Here are some data points:
- 125,000 enterprises expect revenue from their digital initiatives to increase by 80% by 2020 (Gartner)
- Digital transformation initiatives will more than double by 2020, from 22% to almost 50% (IDC)
- Only 27% of businesses have a coherent digital strategy for creating customer value in place (Forrester)
Are you ready for digital transformation? Do you have a digital transformation roadmap? Does it lay a solid foundation for a successful transition to your future digital business? In order to succeed, you need to start with a current assessment, identify gaps and define the actions and resources required to fill those gaps along the four paths of people, process, technology and content.
Today’s business leaders are faced with an overwhelming number of choices for digital marketing and customer engagement and must bring together numerous disciplines to best serve the customer and realize meaningful business impact. Organizations need to understand their maturity stage in each of these disciplines and develop a governance framework for managing the transition to a fully digitized enterprise. A maturity model can be used to identify areas for investment that offer the greatest return and to support the development of a comprehensive enterprise roadmap to guide future digital marketing initiatives.
Most companies know that digital transformation is vital to survival, but digital transformation can mean different things to different people, so it helps to start out with a definition. In its 2014 State of Digital Transformation report, the Altimeter Group defines digital transformation as “the realignment of, or new investment in, technology and business models to more effectively engage digital customers at every touchpoint in the customer experience lifecycle.”
Of the companies Altimeter surveyed for this report, 88 percent were involved in a formal digital transformation effort. But only 25 percent had completely mapped out the customer journey or achieved a clear understanding of all the new digital touchpoints that their customers are using. In spite of this, 42 percent of were making technology investments anyway.
The results of the study suggest that many companies are making either tactical or isolated investments in digital technology in the absence of a formal, overarching strategy for how the business can optimize the customer experience. To fully achieve successful digital transformation, companies must build a digital vision and strategy, as well as create an information architecture to guide technology choices and to fully leverage investments.
Digital Roadmap Components
A digital roadmap is an approach to defining and managing a digital transformation effort. It provides a structured way to move through the many programs needed to realize success.
The roadmap begins with an assessment of the digital maturity of the business today, and moves on to a definition of a future vision. Once the assessment and vision are completed, then it becomes possible to identify the systemic gaps that need to be filled. Then those steps can be built into the roadmap.
Building a Digital Transformation Roadmap
A digital roadmap is divided into four major tracks: people, process, technology, and content.
The People Track is about realizing that superior customer experience starts by establishing a customer-centric culture in the organization. In addition, the people track addresses the role of business partners in achieving the vision, personalizing the way buyers engage with the brand both before and after the purchase, and then involving everybody in the company through cross-functional collaboration.
The Process Track is about maximizing organizational efficiency, and achieving scalability for the new digital business model. This track requires a complete customer lifecycle analysis, including developing a map of the customer journey. You must understand how every buyer persona engages with your brand during every step of the customer experience lifecycle. Then it becomes possible to build contextualized digital marketing campaigns that are much consistently effective, because they are providing buyers with exactly what they need at the moment they need it.
On the Technology Track, the focus is on building an integrated information infrastructure, which serves as a foundation for integrating data across silos. It also is the foundation that enables all the information management platforms to interact, and allows for the predictive data analytics that drive growth. It is important to keep in mind that your technology strategy is one part hardware one part software in one part information science. A contextualized information architecture is critically important for structuring data and content while tagging them with the appropriate metadata for defining relationships between classes of information.
Your information architecture should reflect the landscape of your business. This requires close collaboration between the business stakeholders in your organization and the IT practitioners that will build an infrastructure to deliver business value - Business value that comes in the form of personalized customer experiences and marketing programs, accurate business insights and more efficient business processes.
Finally, the Content Track is focused on managing both internal enterprise information and customer facing content, ensuring that it is accurate, findable by your audience, personalized, and contextualized. Context helps determine how information is organized. This evaluation needs to be done across all digital assets, so that product information is organized contextually to reflect buyer preferences. Enterprise search and external site search are optimized to make the most relevant content findable. Data governance processes will ensure data quality and accuracy.
Getting some quick wins that show business impact will help obtain support throughout the transition. Transformation programs may be massive and take place over multiple years, but understanding the ROI for each phase helps keep a multi-year journey on track. With a structured approach, all of the moving parts can be managed and progress sustained throughout this journey.
Avoid Digital Fragmentation
One consequence of the lack of foundational planning is that organizations end up with too many disconnected initiatives, or “digital fragmentation.” These initiatives need to be unified before an organization can realize the full potential of its digital vision. This can be a difficult process because each initiative often has its own business justification and funding.
The problem with fragmented initiatives is they are often not well aligned with the company’s strategic goals. They may be a reaction to short-term marketplace events, rather than a true reflection of long-term business goals. Without a digital roadmap, organizations run the risk of buying technologies without a clear understanding of their role in driving top-level business outcomes.
Organizations that experience the greatest digital transformation success start with vision and strategy. They asses their current state capabilities. They know where the gaps are and then they chart the roadmap. The roadmap includes all of the people, process, technology, and content changes that need to be made.
Start with Vision and Strategy
Having the right vision and getting the organization to agree on the objectives for transformation, without getting into implementation details is critically important. The right vision gets everybody on the same page and the right strategy for getting there creates understanding for how to realize that vision. A digital transformation roadmap aligns technology resources and programs to the business growth strategy of the firm. Only then can the the team get to a point where it can start to talk about implementing technologies, implementing business processes, hiring people with the right skills, and building organizations.
Upscale retailer Nordstrom is often described by industry observers as a leader in digital experience. Nordstrom had a very clear picture in mind when it set out on a multi-year digital transformation initiative. In their vision of a digital future, a customer could walk up to an associate in any store and the associate would have access to all information about that customer—their prior purchases, profiles, preferences, wish lists, recently viewed products—so that the associate could support that customer with an ideal in-store experience.
Nordstrom’s goal was, and is, to support a seamless transition of the digital customer experience from the online environment to the in-store experience. This would enable attending to the needs of a customer at a register, on a point-of-sale display, a company kiosk and also on their own mobile device. That means enabling the integration of customer data across all of those touchpoints.
Knowing the desired end result provides insight about the necessary steps to take along the way and how to arrive at that result. Vision is key to differentiating between adequate digital transformations and truly outstanding and successful digital transformations.
Focus on the Customer
Digital transformation is a journey will impact every part of your organization. It starts with a fundamental concept of being customer centric in everything you do. As you begin to manage the complexities of organizational change, process improvement, technology integration and content management, remember to make the customer experience a primary objective.
With that frame of mind, objectively assess your current state, create your future vision, identify systemic gaps, and structure your digital transformation initiative along the four tracks of people, process, technology, and content.
Be sure to set achievable business goals and measurable metrics to manage the process and to continuously assess your progress. In the end, you will position your business to deliver a digital customer experience that will attract more buyers, maximize digital revenues, maintain customer loyalty and differentiate your brand in the competitive marketplace.