What really is digital transformation — and how do you go about it?
I was having a conversation with the marketing director at a manufacturing company we’ve recently started to help, and I brought up the topic of digital transformation (or DX as it has become fashionably known).
They were wary of using the term “digital transformation” saying it has become too overused. Everyone seem to associate a different meaning with the phrase — often using it as an umbrella term for everything from marketing to finance to supply chain management to human resources — to the point where the phrase has become almost meaningless.
In my view, they are correct.
I added that many consulting firms, such as McKinsey, talk about digital transformation in terms of concepts like being agile, embracing change, transforming the organizational culture and focusing on skills—and so on.
While these aspects are essential for transforming an organization, they fail to provide marketing leaders with a clear understanding of what digital transformation is—or how to go about it.
I explained that we’d recently developed a roadmap and framework for marketing leaders to approach digital transformation in a much more meaningful way.
So, let's unpack it.
We believe digital transformation is best defined as the digitalization of the business from the top down—how the company connects with customers, provides products and services to them, interacts with employees and partners, and does business with suppliers.
For marketing leaders, this means placing needs of the customer first, and organizing the business around the customer’s journey, their needs and their expectations.
Thus the question then becomes, how will your business meet rising expectations of modern and digitally-savvy customers? Customers who expect to be able to seamlessly interact with your company at every stage of the journey.
Or to put it another way, should your business deliver the level of customer experience provided by today’s leading B2C brands?
I believe the answer to that question is yes.
We believe the most sensible approach to digital transformation is a top-down strategy that is mapped to key business functions.
Here are the questions we believe should be addressed.
Do we need to adjust our business model ?
How can we deliver a seamless end-to-end customer journey through digital channels ?
How can we drive innovation, create value-add products, and build digital revenue streams ?
What is the customer data foundation needed to support this ?
What is the technology foundation needed to support this ?
What is our operating model to support digital customers ?
These form the key principles that our digital transformation strategy is built upon.
These principles help provide better alignment among the different business functions, allowing a cohesive and coherent overall roadmap that delivers faster ROI and the ability to prioritize initiatives between these pillars.