A successful digital transformation project requires C-level support, change management skills, and an agile spirit, according to a Forrester report.
Most Fortune 500 companies aren't digital natives, but that doesn't mean they can't evolve their operations to create a generation of digital experiences, according to a recent report from Forrester. However, taking the first steps of a multi-year journey can feel overwhelming for many digital leaders.
"When you look at everything that has to be done over the course of a couple years, it can seem like a whole lot of work," said Forrester vice president, principal analyst, and report co-author Jeff Hammond. "We wanted to write this to give some immediate, actionable things to get folks started."
Many companies have a digital organization, but it tends to operate separately from their IT organization, Hammond said. "It's not really a technology problem—it's a cultural problem and an org problem," Hammond said. "And a lot of times the larger organizations don't really either see that or want to admit that, because doing that work is a little bit harder than finding a vendor and buying a technology or using some open source libraries."
SEE: IT leader's guide to achieving digital transformation (Tech Pro Research)
Here are six steps to jump start the first 100 days of a digital transformation plan, according to Forrester.
1. Start with buy-in and commitment from C-level leaders
This goes back to the culture and org issue, Hammond said. "If they don't buy-in or understand, you very quickly get into issues where changes need to be made, but the people trying to make those changes don't have the authority to do that," he added.
For example, Allstate has made several moves to re-engineer their core mission-critical applications and make them more modern, Hammond said. They brought in a new worker and gave him the power to make those changes. "That kind of stuff doesn't happen without a CEO or a CIO or a VP or marketing supporting that change agent up to the hilt," he added.
2. Identify pathfinder projects to build momentum with small wins
"If you don't show early success, it's easy for the middle management and the entrenched bureaucracy to basically say, 'Well, this is going nowhere,'" Hammond said.
In large organizations, you tend to see three groups of people: Those who want to change, those who don't, and those who are on the fence. "If you start showing those small projects and successes early, then a lot of those fence sitters start to get with the program," Hammond said.
Many companies are taking the approach of creating minimum viable products, and taking a narrow slice through a customer journey, Hammond said.
For example, one large hotel chain Forrester worked with started their digital journey by making it possible to book rooms on a mobile app. That eventually drove a billion dollars in reservation revenue each year, and allowed the digital team the freedom to experiment with other digital projects, like concierge features and housekeeping apps.
SEE: IT leader's guide to the future of artificial intelligence (Tech Pro Research)
3. Communicate early and often with everyone—not just digital leaders
Enterprises need to communicate early and often to gain buy-in for digital projects, Forrester found. Digital business leaders who successfully drive change work closely with their technology and offline counterparts, use design thinking to steer agile process investments, and are accountable early on to everyone, the report stated.
"That doesn't happen without a lot of communication and mapping of what the digital strategy folks are trying to do, and then what the development teams that are supporting them are trying to do," Hammond said.
4. Shift your firm's relationship with digital
Building digital projects and relationships between teams takes time, Hammond said. "Understand where you're going, but don't necessarily try to get there very very quickly," he added.
As such, it's important not to treat building digital customer experiences as just another tech project—instead, they should change not only how you serve customers, but also how employees work, the report noted. This requires buy-in from every employee.
One way to start is with a bolt-on strategy. Executives may want an app, or a chatbot, or whatever the next fad is to keep up with competition, the report noted. Tactical digital initiatives like these can build momentum for digital transformation.
Digital business leaders should also work with enterprise architectects to insure that your infrastructure is ready to support the demands of new digital experiences, the report found.
5. Hire people who can help you embed agility into your organization
In addition to the process and technology, digital transformation requires a people component, Hammond said. This doesn't necessarily mean a ton of people, but the right mix of talent, he added.
This may mean hiring on some mobile developers, or using an agency for data scientists, Hammond said. "Putting together that mix of talent becomes a real challenge that they need to think about early," he added.
6. Challenge the status quo to drive collaboration with technology teams
"We found that for a number of these organizations to get the teams functioning in a high productivity state, they had to change their office location and co-locate their team," Hammond said. "And you see even large technology companies starting to do this now." For example, IBM moved its offices to New York City to be able to access the tech talent needed in the same place as the business talent, he added.
"It can be done without doing that, but it becomes a lot harder when you're trying to manage distributed teams—even if teams are in the same building, but they're on two different floors, the reduction in collaboration because of that is fairly significant," Hammond said.
Ultimately, companies need to make the right culture changes to drive success in the process and technology changes, Hammond said.
"Culture is a reflection of who you hire, because every hire has the possibility to change the culture if the executives support that change," Hammond said. "And it's a virtual cycle, because as those hires start to come and change the culture, it's easier to attract people who want to participate in that change." It's also easier to get those fence sitters to move in a digital direction, because they are more likely to embrace the cultural changes, he added.
"You can't change culture in 100 days, but you could at least start to turn the ship in a direction that you want to go," Hammond said.
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