As is inevitable when something matures, people take a closer look at what is actually happening and what they can realistically expect to gain from it. That’s no different for Digital Transformation. It has significant upside and just a few of the various activities can benefit you. For example:
- Focusing on DevOps can decrease time to market for key apps, features, sites, etc.
- Better customer experience can decrease customer churn
- An agile integration platform allows you to branch out to markets and partners you never could
We could go on but whether it’s increased revenue, averted loss of revenue, or true cost savings, a holistic approach to Digital Transformation can bring business value.
But Here’s The Rub
Altimeter, in their 2016 State of Digital Transformation, stated the following key statistics:
As more companies evolve, change agents are asking leaders for more funding and resources. In turn, they’re being asked for results projections to support their requests and roadmaps. This lack of data or ROI to justify the value of digital transformation (69%) is still holding companies back from taking steps toward digital relevance, a sizable increase from our 2014 survey wherein only 34% of respondents cited the lack of data as a challenge. Although we’re in an era of Big Data, companies still struggle to capture, comprehend, and act on insights available to them
Oddly enough, in the same section, they referenced another challenge in risk averse organizations but I already covered that in another 2017 trend.
What we’ve seen with the companies we work with is a combination of willingness to invest at least a little alongside a huge demand for a better business case. Business leaders want a business case. You can’t blame them although sometimes, the best business case can be, “Our competition did it and they just too 5% marketshare from us.” In any event, business leaders must still go through the capital justification process inherent to their organization. They have to justify not just all of Digital Transformation as a key initiative but also the various individual components of the transformation.
That makes your life harder, but not impossible.
What To Do
I think two colleagues of mine, Jim Hertzfeld and Brian Flannegan got it right with a recent digital strategy they did for a Midwestern Retailer. They did a lot of research into the current organization and into the relationship between store and digital. As part of their research, they were able to see and demonstrate some savings and a lot of lost revenue where a focus on digital transformation would provide value in 2017 (the next business year). The final presentation focused on four key things:
- Current state and a variety of inputs
- Vision for the future
- Prioritized list of activities with key business value inputs
- Roadmap based on the business value
Note that 1/4 of the effort in this strategy focused on business value and placing it correctly. The reality is that no organization will sign off on all aspects of you strategy. Key activities will be missed. If you have the data to back up the business value of any one activity in your digital transformation strategy, then the chances of funding it will increase.
