Accelerating Transformation (Part 4): Six Key Questions to Address in Developing a Digital Strategy
The fourth article in our series on ‘Accelerating Transformation’ provides practical advice on developing an agreed digital vision and strategy for your organisation.
As argued in Part 1, most senior executives now accept that their organisations need to transform digitally. It is somewhat surprising, therefore, that many have not yet developed a coordinated digital strategy or transformation roadmap for ‘getting there’ – a digital strategy and roadmap that matches agreed business goals and outcomes with specific technology solutions.
Back in 2014, Forrester Research reported that only 17% of companies with 1,000 to 10,000 employees had a clear vision and strategy for digital transformation. A more recent study, published earlier this year, suggests that limited progress has been made since then with only 26% of the 1,124 industrial companies surveyed having a ‘well articulated digital transformation strategy.’ While the majority of respondents accepted that digital transformation is critical to the future success of their organisations, most were still adopting a wait-and-see approach.
Similar 2017 results were reported by Didier Bonnet, one of the main authors of the highly acclaimed ‘Leading Digital’ book. Most large companies, according to the author, are struggling to successfully implement digital transformation with the majority of boards having a long way to go before they are mastering the digital challenge.
Digital Planning Pays
Below we present a simple framework for digital strategy development, implementation and performance measurement built around six key questions to address.
With IDC predicting that 70 per cent of digital transformation programmes could fail, the underlying theme of our suggested approach is that ‘Digital Business Planning Pays’. In other words, planning may not guarantee success; however, done properly, it will significantly reduce the likelihood of failure.
Addressing the six key questions listed below will ensure that:
- The digital business actions and initiatives you implement are fully aligned with and supportive of overall business goals and objectives.
- KPIs and targets are agreed for monitoring and evaluating digital business performance, business impact and ROI.
- Competing digital projects are prioritised based on their relative contribution to short and longer-term business objectives, KPIs and targets.
- All key success factors are considered, especially the organisation, people and resource aspects critical to successful strategy implementation.
- Your organisation does not suffer from ‘paralysis by analysis’. By providing an agreed framework to follow, our suggested approach considerably speeds up, rather than slows down, the strategy development and implementation process.
- The recommended approach can be very useful for internal and external communications – a simple framework to present digital business goals, objectives, key actions and initiatives to colleagues, partners and other stakeholders.
Digital Business Planning Pays: The Six Key Questions
- Vision – what is the overall digital vision for your organisation? While this is listed first, agreement on the vision is often best left until after the other stages have been complete.
- Business Objectives – what are the key objectives and targets to be achieved? Are these fully aligned with and supportive of your overall business goals and objectives? What KPIs will be used to measure on-going digital performance and business impact? Have targets been agreed for each KPI?
- Customers – who are your customers? A broad definition should be adopted here covering ALL ‘customers’ of your digital strategy including Existing Customers, Potential Customers, Internal Customers (Staff) and Business Partners. It is important to agree who your ‘Most Valuable’ and ‘Most Growable’ customers are as this will help to prioritise competing initiatives.
- Digital Actions and Initiatives – what digital actions and initiatives do you need to implement to achieve agreed business goals and objectives? Digital actions and initiatives can be listed under the Five Key Pillars of Successful Digital Transformation discussed in a previous blog post – initiatives that enhance the overall customer experience with your organisation, build Digital Operating Advantage, derive actionable insight from data, create a more collaborative and knowledge sharing way of working and, where appropriate, transform your underlying business model. Competing priorities can then be ranked according to their relative contribution to achieving agreed business goals and objectives. For each priority initiative, the approach being recommended here can then be cascaded to ensure alignment with overall business goals.
- Organisation, Resource, People Issues – the main barriers to successful digital transformation are organisation, resource and people related rather than technology. At the strategy development phase, the main obstacles to change should be identified with appropriate measures being introduced to overcome these. The topic of implementing digital transformation will be discussed in more detail in Part 6 of the series.
- Performance Measurement – how will digital transformation performance and business impact be measured?