In part one of this series, we talked about the importance of digital transformation and how technology has completely changed the business landscape as we know it. Competitors are popping up nearly overnight, and the ones that have successfully leveraged digital to streamline their organizations and improve the customer experience, are amassing large sections of the market at breakneck speed.
And while digital transformation may be the buzzword du jour, it's something many brands must consider if they are to remain competitive. One of the biggest barriers, as many CIOs and CMOs can attest to, is selling others in the C-suite on such a big undertaking.
So, how can you make the case for digital transformation in your organization? It requires coming to the table prepared (see part one), being able to demonstrate the possible return on the time and monetary investment, and creating a roadmap that illustrates change-management process.
Show them the ROI
According to global market intelligence firm IDC, digital transformation spending will reach $1.7 trillion worldwide by the end of 2019. How are you going to get your execs to contribute to a piece of that pie? Show them innovation's potential return on investment.
"In selling the concept of digitization to your board and executives, adopt a mindset of the venture capitalist, as if you're investing in a brand-new company for the first time," said Daniel Newman, principal analyst and founding partner of Futurum Research and Analysis. "Know where value in your industry is migrating and explain it clearly using data and analytics from your entire industry."
As a VC (and even a CEO for that matter), you'll want to have visibility into the following before embarking on an investment into digitization:
- A current market analysis -- what's going on out there, whether in your industry or technologically, that could disrupt your business
- How digital transformation is impacting your industry's growth trajectory and competitive environment
- The potential cost vs. benefit across various areas of the business (more on that below)
But, it doesn't end there. You'll want to demonstrate you also have a plan in place to measure the effectiveness of the transformation once it's in place.
Thus, monitoring will become crucial once your team has an innovation strategy in place. Digital investment experts at PwC stress establishing "process and governance mechanisms by which [companies] can manage and measure their digital return on investment and innovation," and carrying them across six key areas of the organization: customers, operations, safety and soundness, disruption and innovation, employees, and infrastructure.
By making the case that you have a plan in place for measuring these areas, it will help quell the nerves of those who hold the purse strings in your organization.
Bring a roadmap for success
After you've explained to your executives why innovation is crucial to business growth and shown the potential return on investment, present an initial roadmap for success. "Without effective change management, digital transformation is dead in the water," said Gianni Giacomelli, Global Business Leader of Digital Solutions at Genpact.
With that in mind, be sure your roadmap addresses the key concerns CEOs, COOs and CFOs will have in undertaking a transformative venture. Show them you've thought through how the rollout could be streamlined to reduce impact on the organization.
Key considerations for your preliminary digitization strategy should include plans for how the transformation will impact:
- The customer experience: including customer touchpoints, client analytics, and top-line growth
- Operational processes: such as worker enablement, performance management, and the use of automation
- Business models and ongoing innovation: like the introduction of new products and features, as well as the viability of global operations
Sound overwhelming? Think of digitization as an evolution instead of a revolution and remember, it's okay to start small at first. "When digital transformation is done right," it's like a caterpillar turning into butterfly," said George Westerman of the MIT Sloan Initiative on the Digital Economy. "But when done wrong, all you have is a really fast caterpillar."