Overcoming digital transformation challenges by developing a vision

A McKinsey report pointed out that only 3 out of every 10 digital transformation projects are successful, which means that 70% of companies are unwilling to change their current strategies, and countless companies do not have full confidence in transformation. It is difficult for us to understand the mentality of companies. In fact, digital transformation does face many huge challenges, such as:

• Management changes

• Integration of new technologies and processes

• Management buy-in

• Complex and aging legacy applications

I have served as a director of digital transformation. Among the many clients I have served, I have found that one of the biggest obstacles to digital transformation is the lack of communication, coordination and execution at all levels of the enterprise. To solve this problem, enterprises need to understand how to create a vision, know what this vision needs to include, and how to formulate or adjust this vision. The formulation of a vision is crucial to the digital transformation of an enterprise.

Why do companies fail in digital transformation?

The actual digital transformation process is full of various mismatches, such as what strategy to adopt, what tools to use, how to start, and the ultimate goal of digitalization. This is a problem that confuses many companies. When there is a huge gap between strategy and execution, companies will falter in the digital transformation process. The root cause of this problem is as pointed out by a survey of Harvard Business Review: only 8% of executives are good at strategy and execution.

At the strategic level, corporate executives need to develop a vision for the project and decide the company's development direction, such as new markets to enter and new channels to open up, based on a balance between the modernization of current systems and processes and the creation of new technologies. The second is the project level. From an IT perspective, the digital transformation project is essentially about having a group of developers, testers, user experience officers, product designers, business analysts, etc. work together to create an application portfolio. These applications can drive business value (that is, create revenue, save costs, increase customer interaction, etc.) and support larger-scale digital transformation projects.

The vision is set by the executives, then communicated to the department heads, who are ultimately responsible for setting the strategy and how the teams execute it. But each department has its own resources, skills, and needs, so the strategy will be different, and the execution of the strategy will also vary greatly. If the strategy implementers have different understandings of the vision, the results and outputs of each department will be different, and ultimately they will work in the wrong way or produce unexpected results. They may take the wrong approach to execution or produce the wrong thing.

Clarify digital transformation strategy

When the vision is clear and can be clearly communicated throughout the organization, it will be much easier to achieve the digital transformation goals. This requires building a "bridge" between the company's management and the executive team, which drives all departments to execute the company's vision by managing the digital transformation process. In other words, the company needs to hire a project leader or project manager to open up and promote cooperation between departments, and this person needs to ensure that the current application portfolio is in compliance with standards and supports the digital transformation strategy of all departments.

Such a “bridge” not only facilitates change management, but also allows everyone to be on board and adapt to the new way of working.

What should a digital transformation strategy include?

Below we will explore what the high-level vision should include in order to effectively implement corporate strategy. If employees in different departments do not understand the goals of digital transformation, it will be difficult to align their pace. With so many tasks to be solved and handled, how can companies balance the vision of the future with the technology or processes of the past? If companies want to double down on effective practices and optimize them, but also want to enter a new market or open up a channel that has never been tried, how can they perfectly balance the two?

optimization

Identify what is currently being done well and improve upon it – the business vision can include improvements to current processes, optimization of various revenue streams, technology or automation that helps reduce costs and increase efficiency, etc. It can also include how to improve the customer experience to spawn additional transformation projects, thereby increasing customer retention.

Transformation

If the company's ambition is to revolutionize a market or industry, it is important to consider all digital products and services that can be reached by the target audience. Of course, without changing the existing products, you can customize a new business model around the product, such as a subscription model or a platform-based model.

Influencing factors

Companies need to consider possible technological innovations, changes in corporate culture, and following of industry development trends based on their vision. Focusing on subsequent practical implementation measures is the key to creating a balanced strategy and also helps to quantify digital transformation methods.

Clear goals

In many cases, being clear about your own goals does not mean being able to tell others how to achieve them. No matter what strategy is being implemented, the key is to put all the pieces in place so that the vision becomes clear, accepted, and uniformly executed, especially for a super-large strategy like digital transformation. Although digital transformation is endless, the goals set by the company should be achievable. While gradually achieving these goals and developing the business, the company should set higher goals in advance and think about the next steps. At the same time, it is also necessary to let participants such as stakeholders, team leaders, project leaders, etc. know the company's next goal.

Read the Gartner® report: How to Set Your Digital Goals