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What is Digital Transformation?
Digital transformation is one of many ways a business can improve its growth, sales, and operational strategy. To succeed, there is one tool a founder needs on their journey to greater efficiency — a digital transformation roadmap.
This is our guide for a business that plans to become digital forward. Together, we’ll look at what a digital transformation roadmap is, its importance, and how one is made.
But first, we need to understand the difference between digital optimization and digital transformation before outlining your digital transformation roadmap.
Digital optimization and digital transformation are related, but they're not the same thing. Digital optimization usually means making small tweaks and improvements within your current business model.
Digital transformation is a larger change, where a business uses digital tech to improve efficiency, perfect customer service, and keep up with the changing consumer market demands.
This means that when you create a digital transformation roadmap, it will include digital optimization that will remodel the business’s processes and strategies, completely changing how tasks are handled and how value is provided to the customers.
Yet, digital transformation is not limited to the adoption of new CRM software or AI chatbots to make operations easier. It can also create a change in the team’s values, lifestyle, and culture by promoting innovative, flexible ways of working.
What is a Digital Transformation Roadmap?
A digital transformation roadmap is a guide that shows a company how to use digital technologies to change its business processes, work culture, and customer interactions for the better.
This roadmap visually shows the company’s goals and targets that can be focused on. The digital transformation roadmap can improve areas like cloud computing, big data storage and analytics, and cybersecurity.
While a digital transformation strategy defines a business’s new direction or goals, a digital transformation roadmap makes sure the correct digital tools are used to achieve those set goals. By using a roadmap, founders can avoid investing in technology that does not fulfill their plans.
Why Do You Need a Digital Transformation Roadmap?
Consumer needs keep changing due to the growing convenience of the new technology available like speech recognition, workflow tech, cloud computing, ML, and AI assistants.
But businesses don’t need to grab every tech trend that emerges, instead, they need a digital transformation roadmap to guide them toward the most effective solutions to their problems or needs.
Think of the roadmap as your company's guide to improving customer service, making operations more efficient, coming up with fresh business models, and encouraging a progressive culture.
A digital transformation roadmap is important because it creates a clear, visual plan on how the business can use digital technology to meet its objectives. Here are other reasons why you would want to start with a roadmap:
- It ensures that the digital transformation is aligned with the company’s strategy and goals.
- A digital transformation roadmap helps a business prioritize areas that need attention or have greater potential (e.g. customer service) so that the resources are directed accordingly within a realistic timeline.
- It helps manage resources such as budgets, tools, and employee time.
- A structured digital transformation roadmap can help identify potential risks and identify solutions and strategies to mitigate them.
- A roadmap can also help communicate the company’s digital transformation plan to its stakeholders by showing what will change, how, why, and what their role will be.
- A digital transformation roadmap is also a useful tool to define the Key Performance Indicators (KPIs) and milestones for the digital transformation process.
7 Steps of the Digital Transformation Roadmap
It is easy to get caught in a trap of thinking about all the interesting digital tools the business can use and forget to create a systematic process that considers all needs and outcomes.
To help you visualize and plan your digital transformation roadmap, here are the steps to take:
- Assess the current business state: The first step on the digital transformation roadmap is to assess the current technology and strategies used. Based on that analysis, you can identify areas that need improvement, standardization, or remodeling.
By understanding which aspects of your business need improvement, you can look for strategies that create value for customers using digital transformation.
Another important step is to assess your team’s skills and motivations to know how they are to embrace digital technologies and if they are comfortable with change. - Set goals: The next stage of the digital transformation roadmap is to define clear, achievable goals that the business can achieve. It could be that your business wants to focus on improving the customer experience, making internal operations more efficient, or finding new digital revenue streams.
To aim your business in the right direction, you need to connect your investments with smart goals. - Identify The Stakeholders: The third step in the digital transformation roadmap is to know who will take part in or be affected by the company’s digital transformation journey.
They could be a combination of employees, customers, investors, partners, and others who can be invited to discuss the company’s plans and generate ideas. By talking to your stakeholders, you can better understand their needs and expectations.
Don't resist negative feedback, instead, see it as a sign that there's still some confusion that needs to be cleared up. Collaborate to reach a mutual understanding. - Create a transformation-ready culture: We've already talked about how important company culture is for successful digital transformation, but it's also critical to have everyone on board the digital transformation roadmap before you start making changes.
If your team doesn't see the benefits of the new methods and technology, it will be hard to convince them to commit to the end goal.
That is why you should encourage your team to speak up about their worries and make suggestions so that you can address their doubts from the start. The sooner you involve your stakeholders, the safer they will feel about your decisions.
For example, you can test-drive digital products so that your team can provide valuable feedback that can help reach goals sooner and make their jobs easier. This feedback can then be used to perfect the UI/UX of the product and improve satisfaction rates. - Develop a Digital Transformation Strategy: Now that you assessed which departments require change and how ready your team is to embrace it, it is time to develop a strategy.
Divide the digital transformation roadmap into smaller, manageable tasks or projects and allocate resources for each. The strategy is there to find the most efficient way of using time and funds. - Start with a lighthouse project: Once you know how you’ll go about the digital transformation, we would advise you to kick off with a lighthouse project.
A lighthouse project is a test project focusing on one area of the business, which is likely to bring quick and noticeable results. It will help build support for the digital transformation roadmap within the organization.
For example, the project could aim to improve customer service processes or the time in which a client’s request is tended to and resolved. - Monitor and Evaluate: The final step in any roadmap to change is analysis and evaluation. You should continuously monitor the progress of your digital transformation roadmap and assess its effectiveness.
This way, you can adjust your strategy ahead of time.
An Example of Successful Digital Transformation
The dark side of digital transformation is that around 30% of projects fail when businesses do not support or engage their frontline staff in the process, as found by McKinsey in 2021.
But when done right, with the use of a detailed digital transformation roadmap, you can raise revenues and secure a digital-forward brand image.
A great example is Domino’s Pizza, a U.S. franchise with over 20,000 restaurants. The company integrated AI-powered technology to transform its customer service with online ordering and real-time tracking.
Domino’s digital transformation roadmap was highly effective because it focused on its users’ pain points and moved quickly to improve the UX (User Experience).
The company also experimented with other technologies such as drone and robot delivery to make the sales process fast, accessible, and entertaining. The digital-centric approach helped Domino’s win a large share of the pizza market.
