3 minute read
Four ways to ensure digital transformation success
While most companies know the importance of digital transformation, many are slow to take on and/or complete projects that will take them to this new frontier. Mark Bartlett, from FPX looks at some data that supports this point and what manufacturers can embrace to ensure success.
A recent SAP report found that:
• 55% of businesses are piloting digital transformation programs
• 22% are in the planning stage
• 19% have completed projects, but only in some areas of the business
• Only 3% have completed digital transformation projects across the organization
• 1% haven’t even begun planning
And this problem is especially acute for manufacturers, who tend to fall short in their digital transformation journeys for three main reasons.
First, they tend to prioritize revenue growth over improving the customer experience, despite many studies showing that the customer experience is directly tied to revenue growth. Second, manufacturers focus on building smarter products, but don’t involve customers (their most valuable R&D team) in this process. Third, even when they do focus on the customer experience, they don’t actually involve any customers for feedback and input.
So how do you ensure your business becomes a part of that 3% that actually completes digital transformation projects across the entire organization? In order to ensure your digital transformation project is successful, you need to prioritize the following four factors.
1 – Relentless customer focus.
Meeting the customer where they are, when they’re ready to buy is one of the key capabilities that a digital transformation must provide, and is the backbone behind why the shift to a digital strategy is so necessary in today’s buying environment.
Those with successful digital transformation strategies know this. In fact, 92% of them have processes and strategies in place in order to improve the customer experience, as opposed to only 22% of others.
What’s more, 70% have seen “significant transformational value” in customer engagement and satisfaction, versus just 22% of others. These leaders are also more likely to cite customer empowerment as a key global trend.
2 – Adoption of a digital mindset.
In order for a digital transformation strategy to truly work, the entire organization—from the C-Suite down to the sales staff—has to buy in. It’s called a transformation for a reason. And one of the foundational elements of a true transformation is the adoption of a digital mindset.
This means businesses must rethink business models to avoid piecemeal change and use specific project teams to implement the strategy company-wide. That’s why 56% of leaders have seen their organizational structure change as a result of digital transformation.
This is probably because 96% of these leaders consider digital transformation a core business goal, whereas only 61% of non-leaders have the same view.
3 – Investing in the right technology.
Digital transformation leaders are more likely to invest in “next-gen” technologies, like Big Data and analytics (94%), the Internet of Things (76%), and machine learning (50%).
The key here is to use a system that allows for two innovation tracks. First, enabling updates to the core infrastructure to aim for efficiency and cost reduction. Second, building in innovations and new technology that outstrips the competition.
While every bright new technological innovation may not be the best fit for you, understanding what technology makes sense and can augment or improve existing processes can drive your digital transformation.
4 – Recruiting forward-thinking talent.
These forward-thinking strategies also attract forward-thinking candidates. In fact, 71% of leaders said that their digital transformation efforts made it easier to attract and retain top talent. Moreover, digitalization itself changed their overall talent management efforts.
Last but not least, leaders are more likely to believe that investing in digital technology and skills is most important for driving revenue in the next two years.
Now that you know what makes a digital transformation initiative successful, what perks are these leaders seeing?
SAP found that “leaders who are fully committed to digital transformation across their enterprises are three times more likely to report high levels of value creation from [it].” They also found that:
• 85% say transformation efforts have increased market share
• 80% report it’s increased profitability
• 70% say they’re already seeing increased customer satisfaction
• 64% of employees feel more engaged
• 23% higher revenue growth is expected in the next two years
A digital transformation has to be the top priority for any company looking to thrive in today’s business environment. By using the principles outlined above, organizations can set themselves up for future success.