Digital Transformation Strategy: Think Big, Act Small

Pete Swabey

A digital transformation strategy should be devised with the big picture in mind but implemented in small, iterative steps.

Digital business is the new norm. According to a survey of more than 800 business and IT leaders across Europe, North America, Latin America, and Asia-Pacific, conducted by The Economist Intelligence Unit (EIU) and sponsored by SAP, only 3% of respondents say their organisation is not engaged in some form of digital initiative.

However, digital business initiatives are rarely guided by an organisation-wide digital transformation strategy. Only one in five respondents say their organisation has implemented a cross-departmental strategic plan, while a further 21% say that while there is a plan, it has yet to be implemented.

This piecemeal approach to transformation undermines success. The EIU study found that 93% of respondents with an organisation-wide digital transformation strategy say their digital initiatives have been highly effective, compared with 63% of those who have not implemented a cross-departmental strategy.

So what should a digital transformation strategy look like, and how should it be implemented?

First, the conversation needs to start at the very highest level of the business. Buy-in from the senior level is critical for investment in digital transformation, in terms of both budget and time. True digital transformation requires rethinking the way an organisation operates, so it needs to be a board-level agenda item with which the CEO, the CFO, and lines of business need to engage.

Technology is an important part of a successful digital transformation programme, but only as an enabler for a business-centric strategy. While CIOs will play a crucial role in selecting and implementing digital technologies, the transformation strategy itself needs to be approached as an organisational issue, not a technological one. A digital transformation strategy should therefore be articulated in terms of business goals, not technological metrics. It should define the organisation’s ideal position within the digital economy, and how that position will be achieved.

Putting it into practice

While it is important to have a strategic overview, organisations need to pick their digital battles tactically. It will not be possible to change everything overnight. Successful transformation programmes will be multi-year projects, with the pursuit of positive digital disruption balanced with the existing legacy organisational infrastructure and the need to “keep the lights on.”

With that in mind, organisations are advised to take an agile and iterative approach to transformation. They need to identify existing processes and practices that will benefit most immediately from digitisation and deliver demonstrable return on investment (ROI). These initiatives should be prioritised and presented to the wider organisation as use cases that demonstrate the bottom-line value of digitisation. This will assist in winning buy-in across the organisation for new ways of doing business and break down cultural resistance to change.

An iterative approach also enables organisations to adopt new technologies as they emerge, keeping them on the bleeding edge of innovation. Technology cycles are becoming shorter, and organisations need to be agile enough to adapt their thinking to new opportunities presented by new technologies. A culture in which constant change is an aspiration, not a problem, should be the goal.

Above all, keep in mind the objectives of investing in digital transformation. The end result should be an organisation that is able to operate faster, more nimbly and more productively in the digital economy, but most importantly one in which people, processes, and technologies are better aligned to serve its customers.

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This article originally appeared on the Economist Intelligence Unit’s blog Digitising IT 

Pete Swabey

About Pete Swabey

Pete Swabey is a senior editor at The Economist Intelligence Unit's thought leadership division in EMEA; he is also global lead for the tech sector. He specializes in technology and has managed research projects on topics including digital transformation, the hyperconnected economy, the future of work, and the evolution of marketing. He has presented this research at a range of conferences and has moderated discussions at a number of The Economist Group's own events. Before joining The Economist Group in October 2013, Pete was editor of enterprise IT magazine and Web site Information Age and head of technology research for business-to-business publisher Vitesse Media.