How to develop digital transformation strategy in 2024?

Digital transformation keeps emerging businesses competitive and legacy companies relevant. More often than not, organizations confuse digital transformation for digitization, which only converts analog systems into digital ones. On the other hand, digital transformation involves implementing technologies to eliminate manual processes and redundant tasks. 

However, implementing a digital transformation strategy into your existing workflows requires time, technical expertise, and a budget. 

10 steps to implement your digital transformation strategy in 2024

Here’s a 10-step digital transformation plan to automate workflows for your business. 

Step 1: Set clear goals

C-suite executives need to break down their vision of digital transformation into smaller missions with achievable goals. These goals are backed by concrete initiatives to help the assigned departments work towards measurable outcomes. 

The mission statements need to be:

i) Clear and concise

Be articulate about how the mission supports the overall digital transformation strategy. Every department involved should be held accountable for their role in the digital transformation. Set up clear KPIs so everyone can track progress. 

ii) Valuable 

Each mission should add more measurable value to the existing enterprise processes. 

iii) Holistic

Mission statements should address problems across organizational departments.

Step 2: Understand your business objectives

Digital transformation strategy development starts by connecting siloed departments and unifying their fragmented workflows.

Don’t make the mistake of implementing software without assessing your requirements and internal workflows.

Case in point: Let’s assume you’re planning to implement a document extraction system at an insurance company that manually extracts customer information. 

The challenges would be:-

• Time-consuming and error-prone manual data extraction
• Lack of data digitization workflow 
• Inability to automate data flow to downstream apps 

In heavily regulated industries such as insurance, banking, healthcare, and lending, the key features you should look for are:-

• Data validation and verification 
• Extraction of data from unstructured, semi, and structured forms 
• Audit trail 
• Automated categorization, classification, and storage of documents 
• Compliance with regulations such as HIPAA and GDPR 
• Cloud storage 

The choice of tool depends on industry requirements as well as the overall business goals. 

But how do you identify the inefficiencies in an organization and the right digital solutions for them? 

A SWOT analysis framework for digital transformation segregates the existing workflows into four sections, namely- strengths, weaknesses, opportunities, and threats. The strategic planning matrix helps the leadership isolate problem areas and search for solutions. 

Step 3. Assess the current state of technology 

Assess the current state of the technology in the organization before planning the next steps for digital transformation. Here’s how to do so: 

i) Map current digital initiatives

Map out the ongoing digital initiatives to get a comprehensive view of all the workflows in place. Categorize various projects, technologies, and workflows in action and plan for future implementations. For a structured and efficient process, leverage the capabilities of the schedule planner to save time and effort.

ii) Evaluate the existing infrastructure

Check whether the existing infrastructure is capable of handling incoming changes. 

Continuing with our previous example, the insurance company experienced an increased inflow of digital documents after implementing an IDP system. 

Traditional and local data storage systems will fail to accommodate this increased bandwidth due to a lack of scalability options. A modern cloud storage system, with the option to expand the storage system, is more suitable for such cases. 

iii) Analyze the corporate culture

- Are the employees willing to accept changes? 

- Are the stakeholders interested in automating digital transformation? 

It becomes your responsibility to first educate employees that the digitization of processes will not steal their jobs but instead make them more productive.

Communicate with your leadership that the initial investment in digital infrastructure pays off in the long run.

Step 4. Knowledge sharing and succession planning 

According to the McKinsey report, around 70% of all digital transformation strategies failed to reach the outlined goals. Here are a few things organizations should do to be a part of the other 30%. 

i) Buy-in from the stakeholder 

A stakeholder-led digitalization strategy gains the support of its main beneficiaries from the outset. They share their needs and offer recommendations for software solutions, which reduces research time. 

ii) Knowledge sharing 

A detailed knowledge base and a parallel training program increase the adoption rate of the new software. Hire software developers to offer mentoring and coaching to upskill technically challenged employees. Incorporating mentoring software can further streamline the learning process, providing continuous support and personalized guidance to employees as they navigate new software tools

iii) Succession planning 

Training programs prevent knowledge drain from the organization when an experienced employee leaves the company. A knowledge base updated with critical leadership tasks prepares others to absorb their responsibilities. A succession plan ensures the transformation process is not hindered, even during employee transition periods. 

Step 5. Define key performance indicators (KPIs)

KPIs outline what needs to be delivered and set expectations for how well it should perform. 

But what metrics should you measure to ensure the success of your digitalization strategy? Should you select developmental, financial, customer-focused, or project management KPIs? 

In most cases, you’ll be using a mix of these KPIs to reflect the progress of your project.

From the above example of the insurance company implementing IDP software to replace the manual data extraction process as a part of its digital transformation strategy, the KPIs are:

• Higher accuracy rates
• Higher straight-through-processing rates
• Lower operational costs
• Higher ROI 

Plus, employee adoption rates and project management KPIs paint an accurate picture of the transformation's progress. 

Step 6. Adopt a customer-centric approach

The primary goal of any digital transformation is to provide better services to customers and cultivate long-term relationships with them. A Deloitte customer report suggests that 62% of B2B customers prefer companies with good customer service. 

Customer journey mapping helps C-suite executives understand their pain points and prioritize those areas first to increase customer satisfaction levels (CSAT score). The same report states that companies with higher CSAT scores will lower their marketing costs by 20%. 

For example, financial institutions are notorious for having long wait times for loan approvals, which might agitate customers. An IDP platform with a built-in verification and approval process reduces the approval time and increases customer satisfaction levels. 

Step 7. Technology selection

Select software solutions that address multiple problems to reduce your implementation efforts and improve ROI. 

Here are a few other factors to consider before finalizing software for your digital transformation strategy:

i) Integration 

First, check if the software has easy integration with the existing tech stack. 

A good rule of thumb is to opt for software with a large number of native integrations and API connectors. 

The connectors help enterprises gradually adapt to the new system without completely abandoning their legacy systems, preventing post-digital culture shock. 

ii) Scalability 

The selected platform should move the business away from on-premise infrastructure to a more traditional cloud computing model. Cloud infrastructure has flexible systems that can increase or decrease their bandwidth on demand. This allows the organization to optimize its resource utilization. 

iii) Support

Look for platforms that extend their support beyond initial employee training. An extensive knowledge base and a self-serve portal help employees upskill themselves at their own pace. 

Step 8. Data management

While digital transformation eliminates paper-based processes, there are data management challenges you need to overcome. 

i) Data quality 

Set parameters and filters to manage the quality of the data inflow. Accurate and up-to-date data provides a clear image of the movement of both upstream and downstream data. In simpler terms, data quality management makes sense of the accumulated data, helps with decision-making, and serves as a North Star for future digital initiatives.

ii) Data integration 

Digital transformation increases data sharing between multiple platforms within the enterprise. As a result, select a software solution that converts the collected data into different data formats for easier ingestion and analysis. 

iii) Data accessibility

Consolidating data from legacy and newly implemented systems creates a single source of truth to increase data accessibility. Data audit trails monitor accessibility by outlining who gets access to the data and recording all the changes made to the data, making it easier to identify data breaches. 

Step 9. Security 

Risk levels increase while implementing new technologies due to the increased reliance on third-party applications, such as RPAs, cloud storage, IoT, and many more. A cyber risk study reveals that 82% of C-level executives have experienced data breaches during their digital transformation phase. 

A risk profile assessment of the upcoming changes weighs the benefits against security risks. Accordingly, organizations need to filter out software platforms based on their risk management programs. 

Now, how do I select software to prevent such security risks?

While the threats cannot be completely eliminated, they can be mitigated by using the right tools like a cloud workload protection platform, password managers, and vulnerability assessment software. The software for digital transformation should have:

• SSL encryption to protect against brute force hacking and injection of malicious scripts. 
• Hash key storage for passwords to prevent third-party applications from gaining undue access
• Process to delete user data after initial deletion of the account

Step 10. Compliance 

Data governance frameworks keep the organization compliant with the latest data regulation laws. These frameworks are especially significant for highly regulated organizations dealing with sensitive customer information, like banking, insurance, healthcare, finance, and real estate. 

Compliance laws vary depending on the industry. However, there are 2 data governance laws that, if violated, attract heavy penalties. 

The tools you choose should be compliant with international, national, and industry-level regulations. 

i) General Data Protection Regulation (GDPR)

GDPR appoints the organization as a data controller. In other words, the organization is made responsible for protecting that customer’s data from leaking. Any misutilization of data makes the organization liable for the damages. In some cases, organizations also have to alert customers if there is a data breach. 

ii) California Privacy Rights Act (CCPA)

CCPA gives the customer more rights to prevent organizations from using their personal information to generate revenue. The best way to be CCPA compliant is to notify the customers about their data usage at the point of data collection.

Conclusion

Digitally transforming is a challenging undertaking. Start by seeking the help of technology and strategists to create the first draft. Before putting the plan into action, get stakeholder buy-in. Remember to revisit the original plan periodically to make the necessary changes or additions to keep things moving in the right direction. 

Lastly, use the right tools to automate repetitive tasks and free up your staff’s time for more value-driven activities. 

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