There's no doubt about it: The era of digital transformation -- which in a nutshell amounts to the infusion of digital technology into every aspect of the business process -- is here. But while news feeds are ripe with stories about how digitization is disrupting industries from healthcare to education, there are still leaders who fail to grasp the powerful impact innovation is having on customer experience, competitive viability, and operational efficiency.
And while some playful hallmarks of the digital era (i.e. Snapchat, Pokémon Go) might seem trendy, those who think of the shift as a fad should think again. "Just look at the S&P 500," said John Marcante, CIO of Vanguard. "In 1958, U.S. corporations remained on that index for an average of 61 years, according to the American Enterprise Foundation. By 2011, it was 18 years."
Today, as he points out, brands have approximately a two-week run rate on the S&P. Naturally, he credited technology for this shift, and said "...companies that want to succeed must understand how to merge technology with strategy."
The most common roadblock to embracing digitization is often gaining buy-in from the C-suite. While a recent Grant Thornton survey of executives showed more than 75 percent felt digital transformation was critical to company growth, a 2017 Harvey Nash/KPMG CIO survey found 43 percent of CIOs named resistance to change as a key dealbreaker for winning digital strategies.
But if you're looking to make the case for innovation to your executive team, fear not. By doing your homework, providing a thoughtful ROI analysis, and mapping out a solid change-management process, you can help leadership buy into a digitization plan built from a meaningful strategy. This two-part series will drill down on those three key areas to prepare you for "making the sale."
Do your homework first
When it comes to championing digitization, it's important to get inside the heads of key decision makers. You might be surprised to find that your executives are balking at innovation for reasons not even on your radar.
"The challenge for the C-suite isn't so much that the transformation is digital, [but] that digital technologies are enabling entirely new business models and cost structures," said Michael Kanazawa of EY Consulting. "The disruptive nature of 'going digital' is what is difficult for the C-suite, because it means triggering transformational shifts in the business and significant amounts of change for the entire organization."
That's why when forming your pitch, it's critical to help executives understand the cause-and-effect relationship between innovation and customer success, operational efficiency, and business growth, said Connie Moore in a Forrester report.
With that in mind, you'll want to make sure to drive the following points home when selling the benefits of digital transformation:
Why it will boost customer experience: For instance, SAP's Digital Transformation Executive Study stated that "70 percent of leaders have seen significant or transformational value from digital transformation in customer satisfaction and engagement." In your own organization, illustrate how digital transformation could potentially deepen engagement with customers or help create a more personalized experience for them.
How it will help drive business growth: In a recent Forrester study, executives predicted nearly half of their revenue will be driven by digital by the year 2020. What's more, a 2017 Gartner survey stated 56 percent of CEOs who have taken a "digital-first" approach to business say their efforts are already improving profits.
Demonstrate how, by way of streamlining workflows and improving the customer experience, this undertaking will help your organization not only attract and retain customers, but also possibly eliminate costly tools or ancillary services you're currently using.
What makes it key to building operational efficiency: Research shows businesses both small and large are being handicapped by legacy systems. In one survey, 90 percent of IT decision-makers claimed dated technology was hobbling productivity.
This is exactly what digital transformation takes aim at. Organizations that have undergone the digital transformation process experience better communication and collaboration among their teams and various departments, as well as customer communications, because everyone is operating from one central source of truth rather than various systems cobbled together.
In the second part of this two-part series, we'll dive into how to talk return on investment and build a roadmap for how you purport to implement your organization's digital transformation.