How to Develop a Digital Transformation Strategy

The buzzword of a digital transformation strategy remains a constant despite being around for four decades. According to research, 93% of businesses have already adopted or are at least planning to adopt a strategy for digital transformation. So, if you’re one of these organizations considering adopting a digitally-focused approach, you may be wondering how you go about developing a digital transformation strategy.

Thankfully, this guide will answer the question of how to develop a digital transformation strategy by giving you five essential steps you can follow to create a tech-driven plan that can take your business to new heights. 

In this guide, we’ll explore the following: 

• What is a digital transformation strategy?
• 5 Steps to Developing a Digital Transformation Strategy
  1. Establish the purpose of your digital transformation strategy
  2. Decide on your type of digital transformation framework
  3. Assess the current digital scope of your business
  4. Determine the technology you require
  5. Build a roadmap for your strategy for digital transformation

What is a digital transformation strategy?

Digital transformation strategies are comprehensive plans with the purpose of outlining how an organization intends to leverage technology to reshape and advance its operations. In the evolving business landscape in this digital world, leaders are utilizing digital transformation strategies involving technological tools to create more efficient processes to enhance the overall customer or user experience. 

These digital transformation solutions serve as a detailed roadmap to guide a company through successful evolution in the highly competitive digitally-driven tech world. In essence, if a digital transformation framework is focused on modifying or adopting new technology to drive innovation across all business departments, the digital transformation strategy is the blueprint that facilitates this transformation. 

Ultimately, digital transformation strategies encompass the integration of technology to establish or enhance processes, culture, and customer experiences within a company. You could consider it a detailed map directing your brand toward achieving its digital evolution goals and objectives.

An effective digital transformation strategy goes beyond simply deploying new technologies or transitioning to cloud-based platforms. It necessitates a significant cultural shift within the organization, impacting processes, workflows, and the mindset of its people. Essentially, people, rather than technology alone, play a vital role in driving a successful digital transformation strategy. 

But how do you go about developing a digital transformation strategy? We’ll explain how in our next section.

5 Steps For Developing a Digital Transformation Strategy

You can take several steps when developing a digital transformation strategy to enhance your IT operations. In this section, we’ll cover five crucial things you can do to get your plan off the ground, from establishing the purpose of your strategy and the approach you’d prefer to take, assessing your existing digital scope, determining the technology you require, and the roadmap you’ll follow for your strategy for digital transformation.

1. Establish the purpose of your digital transformation strategy

Our first step for developing a digital transformation strategy involves establishing the purpose of your plan and answering the question of ‘why’ you’re doing it. Establishing a digital transformation strategy is not solely about implementing new technology; it's about unlocking the potential for new and more efficient working methods. 

We mentioned in our previous point that people, rather than the sole use of tech, are essential in driving successful digital transformation strategies. Therefore,  

it's crucial to avoid overwhelming employees with unfamiliar technology whose purpose they don't understand or see the value in. 

Instead, start by defining clear objectives and goals to set the stage for successful digital transformation solutions. Doing so gives your organization a sense of purpose and allows for effective progress monitoring so you remain on the path to success.

For example, according to research by WalkMe, companies in 2021 were subject to nearly $100 million in additional costs, in part due to unexpected expenses in meeting their goals. This is a prime example of the importance of establishing the purpose of your digital transformation strategy early in the process to avoid being confronted by further unaccounted-for costs later down the line.

You could consider several things when determining the purpose of developing a digital transformation strategy for your business. These purposes, goals, and objectives may include:

• Increasing company revenue
• Enhancing your customer and user experience
• Staying ahead of the competition
• Boosting the levels of employee productivity 
• Encouraging internal and external collaboration
• Lowering software costs
• Becoming more agile 
• Maintaining compliance with laws, regulations, and industry standards

There is no one-size-fits-all regarding a digital transformation strategy, and the term itself can be ambiguous, meaning different things to different people. However, business leaders and IT management occasionally make the mistake of leading with technology and only paying attention to the "why" or “purpose” afterward. This backward methodology has resulted in many failures. 

So, to ensure success when initiating a strategy for digital transformation, it’s essential to identify your business needs and goals before anything else. One strategic starting point is to align your digital transformation strategy with your organization's long-term goals, typically outlined in a 5- to 10-year plan. This approach shifts the discussion away from solely focusing on technology and emphasizes the business needs, fostering a more effective perspective. 

For digital transformation strategies to succeed, a compelling business case and clear value to the organization must be identified, initiating important discussions at the C-suite level and with senior members of your IT operations team.

When establishing your purpose, it’s important to remember that digital transformation is not a singular project; it's a strategic positioning to futureproof your organization. So, before diving into the transformation, reflect on the experience you want to provide, consider strategic gaps in your organization, and the challenges you face in your day-to-day processes and operations.

2. Decide on your type of digital transformation framework

Now that you’ve established your strategy’s purpose, next on our list of five steps for developing a digital transformation framework is to decide on the approach you’d like to take that is best suited to your business. The concept of digital transformation encompasses four distinct types. Each type of digital transformation framework is tailored to specific organizational needs. Here’s a breakdown of the four approaches you could take to support your strategy. 

Business Process Transformation: Involves using digital technologies to improve the efficiencies of internal processes, such as automating tasks through artificial intelligence (AI) or utilizing data analytics for better decision-making.

Business Model Transformation: Focuses on improving existing internal processes through digital technologies, exemplified by Amazon's evolution from an online bookstore to a comprehensive e-commerce platform with a subscription-based model.

Domain Transformation: This approach is harnessed by businesses entering new markets or sectors aiming to enhance their product or service offerings. Disney's entry into the streaming domain with Disney+ is a prime example.

Cultural/Organizational Transformation: This approach is arguably the most challenging type and requires a shift in employee mindset and work culture toward a more digitally-driven framework. HubSpot exemplifies this approach by fostering a collaborative culture and providing digital tools for upskilling opportunities.

Choosing the right approach for your strategy for digital transformation will depend on your specific business needs and goals and will go hand in hand with the purpose of your plan, which was laid out in our previous point. All four types offer valuable tools for businesses striving to remain competitive in the digital age. 

Learn more about these four types, along with what digital transformation is and its advantages, by reading our guide: What are the benefits of digital transformation solutions?

3. Assess the current digital scope of your business

Another step for developing a digital transformation strategy within your business is to assess your organization's digital scope. This step involves recognizing the systems and IT infrastructure your company has in place and understanding their functionalities. 

Gaining insights into what you currently have from a tech standpoint can help you pinpoint any gaps you have. With this information, you can identify and invest in digital transformational solutions aligned with your goals to ensure you deliver seamless user experiences for your clients and customers while enabling your IT team and broader business to perform at optimal levels.

It's essential to take a thorough and well-thought-out approach regarding the assessment of the current digital scope of your business, which your IT team or senior tech experts can carry out. Before making new technology purchases, which we’ll discuss in our next section, it’s worthwhile considering the following points to determine the efficiency and scope of your current digital assets:

• Process Optimization: Could any of your processes be refined or automated to improve efficiencies within your organization?
• Enhanced Collaboration: Do you have a desire to improve collaboration with stakeholders or seamlessly involve clients and customers in your work processes?
• Data-Driven Decision-Making: How accurately can you manage time and budgets, and is there scope for more data-driven decision-making?
• Scalability: Can your IT infrastructure adapt to rapid growth where there is a more significant user demand or data volume?
• Resilience and Security: How reliable and secure is your IT infrastructure against potential outages and cyber-attacks?
• Customer Data Management: Can customer data management be enhanced, and are there opportunities to automate customer and client-related workflows?

You could comprehensively understand your digital strengths and weaknesses by addressing these questions. This insight serves as the foundation for selecting new technology solutions that meet your aspirations and contribute to achieving them. 

Ultimately, a strategic and informed approach to assessing your digital scope can help ensure that your future technology investments sufficiently enhance internal productivity and create an optimized user experience, steering clear of the pitfalls experienced by the 62% of technology purchases that failed to meet expectations, according to leading research.

4. Determine the technology you require 

Once you’ve assessed your business's current digital scope, the next step for developing a digital transformation strategy within your organization is to determine the precise technology you require. 

Selecting the right technologies aligned with the purpose of your digital transformation framework is crucial, as they form the backbone of efficiency and allow your workforce to concentrate on more intricate tasks. While people remain at the heart of digital transformation success, technology acts as the catalyst for realizing your objectives.

For example, if the purpose of your strategy for digital transformation focuses on elevating customer experience, you could consider investing in a customized Customer Relationship Management (CRM) system. Choosing this technology can equip you with automation tools focused on efficiency, freeing up your employees to tackle more complex responsibilities.

Regardless of your focus, it's imperative that your staff are capable of navigating the new technologies. Clearly communicate the purpose of the technologies to your employees before making any purchases, and allocate time for them to ask any questions about the technologies you’re bringing into the business. 

Once the tech becomes embedded into your operations, make sure you provide thorough training to optimize your Return on Investment (ROI) while minimizing staff turnover, which could occur if your people are unsure or uneducated about the technologies you’ve brought in.

You could also seek support from tech-driven third parties when evaluating the available technology options. Finding a partner can accelerate results and play a pivotal role in achieving successful digital transformation outcomes. A technology partner can open the doors to new ways of thinking to enhance your existing strategy while helping supply you with your required technology. 

When considering the technologies and potential vendors you could partner with, always keep your future vision in mind. Here, the key questions to ask yourself include:

• Scalability: Will the technology and vendor support scale as your organization grows?
• Integration: How seamlessly does your required technology integrate with your existing systems?
• Expertise: Does the vendor possess the right technology and expertise for your specific requirements?
• Shared Vision: Do the vendor and their team align with your vision for digital transformation?
• Long-term Support: Can the third party support your long-term strategy effectively?
• Track Record: What results has the third party achieved with companies that share your requirements or work within the same industry as you?

5. Build a roadmap for your strategy for digital transformation

Our final step for developing a digital transformation strategy is to build a roadmap for your plan. Creating a roadmap is a core element of all digital transformation strategies and involves outlining the steps to guide organizations from outdated digital processes to more advanced, efficient systems. 

To ensure you build a successful roadmap, it's imperative to understand your business needs and identify weaknesses in your current systems, as previously mentioned. Setting achievable timeframes with measurable milestones and checkpoints is crucial for your roadmap. It effectively enables you to evaluate the progress of your strategy, including identifying moments of success or areas where improvement is needed.

Your roadmap should encompass everything we've discussed in this guide and should be regarded as your go-to plan of action for implementing your digital transformation strategy. 

When developing your roadmap, you should lean on internal and external expertise within or outside your IT department. Whether selecting individuals internally, outsourcing, or collaborating with a technology partner, garnering support to build your roadmap is essential for ensuring your stakeholders are on board with your strategy while helping to keep you on track.

Involving the right leaders and IT management is also crucial in building the roadmap for your digital transformation strategy. Leader involvement in the planning and execution can be the defining factor between the failure and success of your plan. 

We've mentioned the importance of people supporting your strategy for digital transformation; therefore, one of the primary goals of your roadmap should be to create a culture that supports digital innovation. Company culture is one of the biggest hurdles to effective digital transformation, and engaging the right leaders is an initial step, but ensuring that the entire organization is trained with the tech you're bringing in and is aligned with the vision of digital transformation is equally critical.

Once you've built the roadmap for your digital transformation strategy, you can follow this map on your journey to evolving in the digital landscape and futureproofing your business in the ever-expanding world of tech.

The Final Word on Digital Transformation Strategies

We've now delved into the intricacies of how to develop a digital transformation strategy, a pivotal undertaking in today's rapidly evolving business landscape. Establishing a digital transformation strategy is more than merely adopting new technologies; it’s a comprehensive plan outlining how an organization can leverage technology to reshape and advance its operations.

Successful digital transformation strategies affect daily business operations and require the right leaders, a culture supporting digital innovation, and a team equipped with the necessary expertise. So, if you’re considering developing a digital transformation strategy for your company but require talent to help kickstart your plan, scroll to see how we can help.

Alternatively, if you’re looking for support in building your IT infrastructure on your journey to developing your digital transformation strategy, check out our guide - What should your business's IT infrastructure include?

Specialists in IT operations and digital transformation

We recognize how developing a digital transformation strategy can transform businesses in the ever-evolving tech-focused world. Our experts also know that creating successful strategies requires top talent to get them over the line. Thankfully, we can help with this. We have access to the best IT talent on the market to fulfill your digital transformation strategies and drive business growth.

Contact us today to discuss the hiring needs relating to your digital transformation strategy.