The Digital Transformation is one of the biggest challenges for many companies. Formerly well established processes reveal their weaknesses in increasingly digital markets. These weaknesses have a direct impact on the competitiveness of companies, especially when new players mix up established market forces or existing competitors gain significant competitive advantages by successfully adapting to the new challenges.
Many companies are successfully meeting these challenges, but for many companies the digital transformation also acts as a fire accelerator in an already tense market situation.
Digital Transformation – Success Factors
In this article, I highlight ten points that can be regarded as essential prerequisites for a successful transformation to a digital Enterprise.
Every successful company has core competencies. The core competence of very few companies is the successful design of digital transformation. Accordingly, it is important to build up evaluation expertise that helps to identify and evaluate the necessary measures for transformation.
This evaluation expertise concerns different areas:
If the company lacks the awareness of the need for change in general and digital transformation in particular, then it is highly likely that neither the change nor the digital transformation will be successful. Ideally, the necessary insight should be available in all areas of the company, both in management and among employees in all areas.
Processes are an important part of every company. Now it is not rare, especially in large companies that have been on the market for a long time, that the processes have reached a certain age threshold. Accordingly, it is important to note that a 1:1 mapping of these processes into a digital service environment does not necessarily bring the desired success. Especially since digitalization often goes hand in hand with a paradigm shift in work, it is not necessarily only good for users if new service-oriented systems are put over old processes.
Therefore, it is essential for the success of almost all digitization projects not only to introduce new services, but also to critically include all primarily and secondarily affected processes from the very beginning, to question them and as a result of an analysis to either confirm, adapt or redesign them.
IT can be both an enabler and a disabler for digital transformation. This applies in particular to organizations with legacy IT landscapes whose owners may feel threatened by the effects of the transformations. On the other hand, most companies have know-how within their IT departments whose existence in the company may not be known at all. Accordingly, it is important for almost all transformation projects to bring IT & Business together as early as possible and to find a kind of communication that enables synergy effects between the possibilities of IT and the goals of the business.
Digital transformation can only succeed if the culture of the company also permits this transformation. This includes the willingness to question both established processes and established views in a targeted manner and the associated willingness to articulate, communicate and implement the need for change.
Especially companies with a pronounced innovation culture as well as the willingness to admit mistakes (and learn from them) are more able to take advantage of the opportunities of the digital transformation than those companies in which this culture is missing.
Another important cultural aspect is the willingness to allow transparency. It is important to communicate that transparency in processes and organizational structures does not only entail risks for the individual employee but also offers enormous opportunities. Employees who actively engage in digital transformation should be encouraged from the outset to contribute their skills productively to the corresponding projects. Employees who oppose the digital transformation should be encouraged to rethink this attitude and to find ways how they can contribute their respective competencies for the benefit of the company even in a perhaps personally difficult phase of company restructuring.
A common obstacle to digital transformation is the “not invented here” syndrome. It is undisputed that the core competence of most companies does not lie in the area of digital transformation itself but in the successful implementation of the respective business model.
Accordingly, it has proven successful to bring on board expertise for transformation projects whose proven core competence lies in the area of change in general and digital transformation in particular. A healthy level of evaluation expertise helps to optimally exploit synergies between the core competence of the company and the consulting expertise of the external consultant.
Here, as so often, not everything that is unknown is bad – but not everything that is recommended by an external consultant corresponds to the Holy Grail.
Digital transformation is not an end in itself. In most cases, a deficiency has been detected that needs to be corrected. In order for digital transformation to be successful, it is important to define goals to determine whether the transformation has been successful or not. In defining the goals, it has proved useful to define both short-term and long-term goals, whereby the short-term goals should not be too high and the long-term goals should not be set too low.
The ability to translate a company’s digital transformation needs into realistic short-term and ambitious long-term goals is one of the indicators that can be used to assess whether the chosen external support promises the desired success or whether it is better to look for another team of consultants.
For digital transformation to be successful, the willingness to think and act agilely is necessary. Agility means in particular the ability to evaluate step by step whether the project is still ontrack or whether it needs to be significantly adjusted in terms of implementation and/or objectives.
The ability to act agilely does not only affect the IT parts of digital transformation but all areas of the affected organization (e.g. organizational structure, processes, interfaces to external actors and last but not least, of course, IT).
Digital transformation can rarely be successfully implemented with a Big Bang strategy. As a result, transformation projects should regularly be understood as evolution. This means that even if successes are not immediately visible in the short term, the transformation project has not necessarily failed.
Realistic goals against which progress can be measured as well as the willingness to be consistent and persevering are part of the key to success.
Since digital transformation is rarely part of the core competence of the employees concerned, these projects usually require a considerable amount of additional dedication, energy and willingness to perform on the part of all concerned. Accordingly, it is important to reward success and to communicate the progress of the transformation project appropriately.
For both rewarding and communication, the use of previously defined and articulated goals as a yardstick has proven its worth.
If medium-term or long-term goals are achieved, it is important to give all those affected the feeling that they have really achieved something. Anyone who accepts deprivation may also expect a corresponding appreciation and must also be allowed to celebrate!