Top priorities for digital transformation strategy implementation

A digital transformation strategy requires a focus on its business value and ability to support key company initiatives. These initiatives are often tied to transformative changes in the business that are connected to customer experience, operational efficiency, and productivity gains. Too often, digital transformation projects are technology driven and lack understanding of business objectives, and do not engage the right stakeholders or clearly detail the needed business / technology roadmap for strategy implementation over a multi-year period. 

There are several key actions that should take priority when implementing a digital transformation strategy. These are: 

Understand business objectives: Start by understanding the overall business objectives and vision for the organization. Digital transformation strategies should not be tactical plans, rather big bold initiatives that push the company in directions that will drive overall value in areas like customer experience, improving operational efficiency, or enabling new channels of revenue or business models. A successful digital transformation initiative typically has a positive material impact on an organization’s financials.

Review the current state: Company leaders should review their organization’s current state by assessing current digital capabilities, processes, and technologies being used, leveraging automation tools focused on process discovery and process mining to help in identifying pain points, inefficiencies, and impact based on improvements, and understanding the level of technical debt that could impact project execution. This approach will help prioritize projects based on needs and alignment to larger strategic initiatives. 

Engage key senior stakeholders (and customers / partners as well): It’s important to connect business and technology leaders across the organization -- including executive sponsors, department heads, employees, and even customers and/or partners who benefit from an initiative. A matrix team that brings different perspectives and ideas in terms of the challenges and expectations can help foster collaboration and ensure digital initiatives align their needs and goals. The higher the expectations and cross organizational impact, the higher the level of senior management needed to own the digital transformation initiative and drive results.  

Prioritize projects: Leadership should also evaluate potential projects that map to digital transformation initiatives by ranking them based on impact, feasibility, culture fit, and alignment with business needs. For example, projects that check all the boxes in terms of customer experience, operational efficiency improvements, and expanded revenue streams would be ranked higher than a project initiative that might only check the operational efficiency box. Weigh all the different initiative factors such as strategic importance, the value it creates, new competitive advantages, and how quickly the business can absorb the project and pivot to a new digital approach. Digital transformation projects fail – it’s critical that leadership understand and communicate to all why this initiative will be different and how success will be measured.

Detail a business / technology roadmap: Digital transformation strategies are multi-year plans that set the digital strategy for an organization, helping to navigate the complexities of a digital business, capitalize on innovation and growth, and ensure the business remains competitive as markets and consumer behaviors change and new disruptive competitors appear. 

From the roadmap a clear actionable plan can be put in place with a sequence of initiatives, projects, milestones, and timelines rolled up into a digital transformation strategy. Prioritization of initiatives can be set based on dependencies, resource availability, and strategic importance. Complex multi-year initiatives can be broken down into smaller more manageable projects to drive change and quick wins. 

Monitor and adjust: It’s important that every project and the digital transformation initiative it is linked to has established metrics and key performance indicators (KPIs) to track the progress and impact. Frequent monitoring and reporting against these metrics allow organizations to adjust and re-prioritize as needed based on feedback (leaders, employees, customers) or changes in the business. Defining, understanding, and communicating customer and employee experience measurements is tantamount to proving project success. 

The approach outlined above is intended to help drive transformative change across an organization vs. incremental improvements. For example, customer experience is one of the key pillars to leveraging digital channels, personalization, and data-driven insights to deliver value-added interactions with customers. The next generation of AI driven platforms has the potential to transform customer experiences in all possible ways. The approach above takes the two key components of digital transformation -- customer experience and technology innovation -- and aligns to priorities of the business with great details around objectives and goals, while ensuring all stakeholders are participants. 

The planning process should involve a top down/bottoms up approach where executive leadership, business leaders, IT/technology teams, digital innovation teams, data analytics experts, customer experience teams (customer service, customer success), and external partners/consultants are all involved in the planning, execution, and ongoing review process. Enterprises in recent years have reorganized IT and business to form Centers of Excellence (COE) that bring together business and technology to help foster collaboration and change.

Each group plays different roles and represents:

• Executive leadership owns the digital transformation initiative and sets the vision, priorities, and strategic direction.
• Business leaders represent various business units and functions, and offer valuable insight into needs, challenges, and opportunities for change.
• IT and technology leaders are there to assess current technology solutions and alignment to digital initiatives.
• Innovation and project teams are often part of innovation-focused and project management centers and are critically important to driving change as it relates to fast emerging technologies. 
• Data and analytics experts play a key role in data driving so much of the decisions and changes organizations make. The team can provide insight on customer behavior, operational      performance, and risk assessment.
• External partners/consultants bring in outside knowledge around best practices and what works at other organizations. 

The frequency at which the priority strategy should be revisited and updated can vary depending on several factors including technology innovation, shift in business priorities, market dynamics, and organizational goals and/or priorities changes in direction. It’s advisable for IT leaders to revisit and review the current strategy quarterly and have a set of key metrics that measure impact and success. 

In today’s business environment where technology innovation is rapidly changing because of artificial intelligence (AI) in the case of generative AI and large language models (LLMs), companies run the risk of missing opportunities to advance innovation that can propel automation and customer experiences to a new level. 

A quarterly digital transformation strategy review ensures that the IT priorities remain aligned with evolving business needs, emerging technologies, and shifting market trends. Additionally, regular quarterly senior leadership review sessions provide opportunities for IT leaders to gather feedback from stakeholders, assess the effectiveness of current strategies, reinforce focus, and adjust as needed to optimize resource allocation and drive value for the organization.

One of the biggest mistakes IT leaders make when prioritizing goals is failing to align them closely with the overall business objectives and strategies. Take for example, the accelerated use of robotic process automation (RPA) several years ago which led to some enterprises falling short of their business goals, and in the worst case scenarios, having to reset priorities and focus to use this technology. 

IT leaders sometimes prioritize goals based solely on technical considerations or immediate process challenges without considering how these goals contribute to the broader success of the organization. This can lead to misallocation of resources, lack of support from other departments, and ultimately failure to deliver meaningful value to the business. Effective IT leadership involves understanding the business's needs and goals and ensuring that IT priorities are directly tied to advancing those objectives.

The pace at which technology innovation is occurring provides both opportunities for organizations to change and risks to a business not doing enough or trying to do too much without the proper pieces in place. This is apparent in how companies are beginning to embrace the use of generative AI.  Generative AI technology offers a wide range of benefits across various domains and industries, however there are serious considerations organizations need to understand with data privacy, data security, ethical use, and a limited talent pool of individuals who have the skill sets to design, deploy, and monitor the use over time.  

Finally, generative AI needs to be part of an organization’s digital transformation strategy, especially when processes or the product require frequent human interaction, are complex to explain, and the model generation is under the organization’s control. When prioritizing projects that involve generative AI, businesses will need to evaluate data availability and quality, organizational readiness, and that generative AI is being used ethically and responsibly, considering data privacy, bias mitigation, transparency, and accountability. A best practice for prioritizing digital initiatives involving generative AI is to start with lower risk pilots under IT operations control, then gradually scale, and monitor and measure the impact frequently. 

Photo Credit: Sashkin/Shutterstock

Brian DeWyer is CTO and Co-Founder of Reveille Software. With more than 25 years of experience in technology, Brian DeWyer provides product strategy and technical leadership in his role as Reveille CTO and board member. Brian leverages his extensive knowledge from his tenure as a senior IT leader at Wachovia and previous role as a process consulting practice leader for IBM Global Services delivering on-premises and cloud-based solution implementations for Fortune 1000 commercial and government clients. He has led process change efforts within large organizations, building on content-driven solutions for high-volume transaction processing applications.