Digital Transformation is among the top priorities facing the modern organization.  The International Data Corporation is forecasting digital transformation spending to reach nearly $3.9 trillion in 2027 with a 5-year compound annual growth rate (CAGR) of 16.1%.  The United States accounts for 35.8% of that spending, amounting to $1.4 trillion!

Organizations are investing significant capital into digital transformation initiatives with all indicators pointing to a continued and steady growth in digital transformation over the next decade.  It’s clear there are many benefits to pursuing Digital Transformation initiatives but how do organizations measure the benefits and how do they ensure their investments will yield the desired return on investment (ROI)?  

In 2023, Deloitte published the results of a wide-reaching study they conducted relating to digital transformation success indicators.  Deloitte applied machine learning techniques to analyze 10 years of financial disclosures from over 4,000 global organizations to understand where and how digital transformation increases enterprise value. 

In their post analyzing the study, Deloitte asserted that “the link between strategy and action is the determining factor in a company’s ability to derive the most value from its digital transformation”.  What does that mean?  Let’s break it down:

• Digital Strategy: involves possibilities created by digital transformation such as, new digital capabilities, new markets, new products, etc.  When a company articulated their digital strategies in their financial disclosures, there was a significant positive impact on business valuation.

• Technology aligned to strategy: involves selecting the right technology to support your digital strategy.  Deloitte found that when there was evidence of technology aligning to strategy in financial disclosures, the valuation impact was two times higher than that of digital strategy alone!

• Digital Change: involves the organization’s ability to adapt to new processes, solutions and ways of working.  When Deloitte found evidence of digital change without reference to specific digital actions, market capitalization eroded, resulting in loss of business valuation. 

• Greatest Risk: Deloitte found that the combination of digital strategy and technology-aligned investments without organization change capability is the greatest risk to an organization, leading to 9% value erosion. 

What can we learn from Deloitte’s insights?  In addition to the importance of Digital Strategy and Aligning Technology to Strategy, Organizational alignment is key to the success of digital transformation initiatives. The best strategy with the best technology will fail if there is nobody to champion and implement the strategy.

To achieve organizational alignment, leaders must be honest and receptive to team members’ hesitation or reluctance to adopt a new process.  It’s important to listen to your team and pursue their engagement and buy-in throughout the process.  In the following paragraphs, we have outlined the end-to-end process to achieve digital strategy, tech aligned to strategy and organizational alignment. 

Every successful digital transformation initiative starts with robust planning and analysis.  This process starts with detailed analysis to define the following:

• Step 1: Define your Core Business Processes

  • What is the 20% of your business processes that deliver up to 80% of the results?  Let’s start with those processes first and build from there.  You don’t have to digitize your entire business in one massive project, you can break it up and pursue the lowest hanging fruit or the most meaningful initiatives first. This helps to build support for digital transformation within the organization and also helps organizations to become more efficient and effective as they improve with each iteration of digital transformation.

  • Formulate a list of questions to consider while forming your digital strategy.  Below is a sample list of questions to help get you started.

    • What are the organization’s top priorities and how should this initiative support/align with organizational priorities/strategy?

    • Which digital investments carry the largest potential ROI?

    • What projects carry the largest risk?

    • What technology investments offer the shortest time to market?

    • What are the potential solutions to digitize and optimize your core processes? 

    • Is there one solution that can accommodate all or most of your processes?

  • Identify a handful of digital transformation champions within your organizational ranks and start collaborating with them on questions such as those noted above

    • This is the beginning of achieving organizational alignment.

• Step 2: Core Process Flow

  • Actors and user personas

  • Communications

  • Process Steps

  • Process Vulnerabilities

  • Process Inefficiencies

  • Consider drafting two versions of these process flows:

• Step 3: Draft Use Case Documents

  • Remember that use cases will enable a positive ROI on your Digital Transformation initiative. 

    • Use cases enable organizations to develop complete requirements for their digital transformation project, nobody wants to invest significant capital in a digital transformation project to find that the platform chosen won’t support one of their primary use cases.    

    • Thorough and process-oriented use case analysis enables organizations to quantify and document these requirements, resulting in alignment of your technology solutions to your digital strategy (the key success indicators from the Deloitte study). 

    • Consider your digital strategy throughout the use case process and ensure that use cases are being documented in a manner that supports your digital strategy.

  • Engage your digital transformation champions in this process, continue to look for opportunities to get your team excited for the digital transformation journey! 

• Step 4: Develop your technology selection criteria

  • This step enables Organizations to select technology that aligns with their digital strategy, a key digital transformation success indicator.

  • Technology solutions may include:

    • Custom solutions are a good fit when there are no turnkey solutions available to meet the need and the available low-code/no-code platforms lack functionality that is required for your use case(s).  This is typically the most expensive and time-consuming approach that an organization can take to digital transformation.

    • Low Code/No Code Platform solutions are a good fit when there are no turnkey solutions available to meet the need and/or the available turnkey solutions fail to fully meet the need.  These solutions are ideal because of their ease of configurability and time to market.    

    • Turnkey solutions are a good fit for pre-defined, industry standard processes.  For example, an Environmental Services company might find a great fit for their incident reporting process in an Environmental Health System (EHS) turnkey solution, but the solution will likely lack other key functionality that might be required such as the ability to incorporate incident tracking, time logging and daily jobsite reporting into one comprehensive solution. 

  • This step is crucial for the success of your digital transformation project.  It is often worthwhile for organizations to engage the services of an IT Solutions Consultant to aid them in the planning, analysis, and technology criteria development process.  Contact us today to get started! 

  • Engage your digital transformation champions in the technology selection criteria development process, make sure that you are developing more and more digital champions with each iterative step in the process.  The more of your team that buys into this process early, the more successful it will be upon launch.

• Step 5: Technology solution selection process

  • Once you determine the criteria that will be used to select technology that aligns and supports your digital strategy, you’ll need to evaluate the available solutions and assess which is the best fit for your organization. 

  • This process is key to a successful digital transformation project, selection of the technology solution will have a direct impact on the success of your project.

  • Quantify list of top 10 solutions based on the technology selection criteria

  • Evaluate the vendors who own the software first:

    • How long has this vendor been in business? 

    • What is their customer retention rate?

    • What is their employee turnover rate?

    • What is their support structure?  Will you have a dedicated support professional to help you as needed or will you be required to rely on an AI chatbot to help you work through issues?

    • What do their customers say about them?

  • Evaluate the software/solutions for fit with your organizational goals:

    • Which solution(s) best satisfy the selection criteria?

    • Which solution(s) offer the best options/ability to scale?  How important is the ability to scale? 

    • When was the solution last updated?  It’s common for software companies to issue new releases every 5 years or so.  If the technology you are considering was released 4 years ago, there is a good chance they’ll release a new version soon. 

    • Which solution(s) offer additional benefits?  What is the net anticipated impact from the solution?  How many processes may be digitized?

  • With technology alignment to enable the digital strategy serving as the key success indicator for a digital transformation project, it is crucial that organizations select the best technology to support their digital strategy.  Using the services of a digital transformation consultant will greatly increase your ROI.

  • Engage your digital transformation champions in the technology selection process, your team must buy into the technology that is selected to achieve your digital strategy.  It is highly advisable to develop more and more digital champions with each iterative step in the process.  The more of your team that buys into this process early, the more successful it will be upon launch.

• Step 6: Design and Configure your solution

  • The output from the planning steps relating to business process analysis and use case documentation will be leveraged heavily during the design phase. 

  • Start by reviewing your process flows, use cases and requirements to draft an outline of your solution. 

    • Structure

    • Data entry forms

    • Workflow processes

    • Mobile functionality (tablet, smartphone, both? How much are you willing to pay for it?)

    • Offline functionality (i.e. do you require access to the solution for your field staff when they don’t have an internet connection?)

    • Language Translation Requirements

    • Automation solutions

    • Call the experts at GovTech Innovators for more!

  • Design your solution and collaborate with your team(s)!  Too often, organizations design and configure/develop software programs in a vacuum with one or two members of leadership and no representation from the field.  Sometimes those leaders do a wonderful job of accounting for their team(s) needs and sometimes they don’t. 

    • In both cases, when decisions are made in a vacuum, there are more challenges with adoption of the technology and achieving the gains that you hope to achieve with your Digital Transformation project. 

    • Engage your digital transformation champions heavily throughout this process and use it as an opportunity to build enthusiasm for the initiative!

  • You’ve selected the technology that best aligns with your digital strategy, now you need to implement that technology in a manner that maximizes your digital strategy.  Don’t forget about your objectives while you’re designing the solution! 

  • Ensure there is a project sponsor who reviews and approves designs to ensure that designs maximize the digital strategy and it’s objectives.

  • Reminder: engaging your digital transformation champions at this point in the process will greatly increase your chances of success by aligning your organization to the technology and the digital strategy.

• Step 7: Quality Assurance/User Adoption

  • Once your solution is designed and configured, it is critical that you invest the time to properly and iteratively test, fix and re-test your solution.  User adoption will be greatly impacted by the quality of the solution. 

  • If the solution works well, is bug free for at least your primary use cases and saves people time, adoption will thrive.  If the solution mostly works well but has a lot of bugs, people will lose trust and adoption will be a challenge, as will achieving a positive ROI.

  • Failure to properly execute even one step in this process can have catastrophic implications to the ROI on your digital transformation project.  Quality Assurance is the last line of defense to identify and address a critical issue before it’s too late.  This includes testing for defects as well as testing to validate that the solution satisfies all required use cases and that it delivers the intended benefits.

• Step 8: Implementing your solution

  • Implementation Plan: your implementation plan is intended to ensure that your solution is successfully adopted and yields the desired return on investment.  This involves covering items such as:

    • Project Objectives

    • Quality assurance

    • User training and adoption

    • Resource allocation and assignment of responsibilities

    • Organizational/Stakeholder alignment

    • Ongoing Support and Maintenance

    • Monitoring/Measure ROI and adjust approach regularly

Most organizations stand to enjoy significant benefits from the effective implementation of a digital transformation strategy.  Many of these organizations lack the internal expertise to formulate a digital strategy and align their technology solutions to the strategy.  These organizations can still enjoy the benefits of digital transformation by engaging the services of a consulting firm such as GovTech Innovators!  Consultants with years of experience leading digital transformation projects can help your organization to avoid the common pitfalls associated with digital transformation. 

GovTech Innovators will work with you to understand your detailed business processes, flowing out and documenting every step and stakeholder in the process.  We’ll work with you to understand the goals and objectives of the system and they’ll have a keen ear for pain points, documenting them as they arise and continuously looking for solutions. 

Contact us today to get started!