Dear Executive, How Do You Measure the Status of Your Digital Transformation?

The pressure for organizations to undergo Digital Transformations in order to succeed in increasingly competitive markets becomes more critical each year. The “speed to compete” has ignited the race to digitization across industries. Companies continue to pivot, grow and reinvent their business channels to maintain customer and product demands. Digitization drives their profitability, sustainability, innovation and strategic growth strategies to support their markets. A successful Digital Transformation looks at a company’s current posture across existing digital capabilities and defines areas of opportunities to create a solid digital architecture.

A major component of the digitization process is the adoption of innovative technology and staying at the nexus of ingenuity and value engineering. Companies may leverage cloud capabilities, application scalability options, automation and machine learning as a means to achieve a synergistic Digital Transformation experience across their business. Conversely, and more intricately important for leaders to consider are the complexities associated with cultural resistance across their workforce. However, with the right skills and expertise, Chief Information Officers (CIOs), Chief Digital Officer (CDOs) and Chief Transformation Officers (CTOs) can plot an achievable Digital Transformation roadmap for their organization.

To move forward with a Digital Transformation journey, executives must understand why Digital Transformations fail and what they can do to manage their company’s risk to stay in command and control of the transformation. This includes setting measurable metrics throughout the process and across the organization.

Here are three areas the C-suite must address in order to best measure the state of their Digital Transformation:

According to Gartner (2019), 80% of companies globally will need to explore, begin or execute a Digital Transformation journey leveraging culture as a change agent to maintain their business longevity, operations and market demands by 2021. With this in mind, the best Digital Transformation strategy is one that acknowledges that Digital Transformation is an incremental journey that builds on previous success, extends the scalability of digital capabilities, and adapts to evolving business objectives.

Therefore, the first step CXO's should take is to determine their business goals. Executives and their organizations need to ask themselves: What are we trying to achieve, What is the role of the organization in the future, and how can Digital Transformation help achieve that? Too often, organizations will pursue transformations with no real understanding of these questions, which has led to the high failure rate of Digital Transformation initiatives. Throughout the process of digitizing, the C-suite needs to assess the success and setbacks of the strategy on an ongoing basis and determine how it measures up to the established goals’ progress.

Once business goals have been determined, CXO's need to identify ways to merge IT across lines of business to create transparency between departments. It’s pivotal for IT to prioritize and streamline the activities that bring the most value to the company. Digital Transformations are risky; the wrong strategy can increase spending to unsustainable levels and have a negative impact on the business, as a whole. That’s why it’s important to have a well-defined strategy that looks toward future business goals.

Since 2000, more than half of the Fortune 500 companies have either gone bankrupt, been acquired or ceased to exist, was in part because of their inability to digitize. While other factors are involved in the demise of some of those companies, most CIOs, CISOs and CTOs view their organization’s “rigid technology infrastructure” as a top concern when it comes to Digital Transformation.

How do organizations as large as Fortune 500 companies put themselves at risk of going out of business? They fail to recognize that what works today may not work tomorrow. While it would be nearly impossible to consistently update technology according to the marketplace and the latest trends, in today’s digital age companies need to stray away from siloed information and allow it to be shared across departments. It is also important to implement meaningful technology that improves end-user experiences with strong design solutions. Without this, organizations fail to deliver tangible benefits and are simply wasting time and resources.

One of the most common ways to digitize is by implementing a cloud first technology strategy which allows companies to scale quickly, reduce costs, streamline operations, improve information sharing and strengthen their security posture. Shifts to the cloud show real results within an organization and with the speeds by which data flows through organizations. Failing to make that shift creates costly complexities.

Company culture plays a significant role in the success or failure of an organization’s Digital Transformation. CXO's need to ensure that employees aren’t bogged down by legacy thinking because the perceived difficulty of digitizing can stall transformations indefinitely.

A workplace that relies on outdated technology can become stuck in its ways and be fearful of change that affects their business models and process workflows.

Before, during and after a Digital Transformation, executives should take stock of company culture and morale to ensure it has the strength to withstand the growing pains of implementing, training and embracing new technology. CXO's should offer employees the resources to understand their role in the transformation and how it will impact their day-to-day activities. These resources can come in the form of webinars, training and surveys, and can give executives a look into how end-users are responding to the changes.

Strategy, technology, and culture are the foundational elements of a successful Digital Transformation initiative. CXO's and organizations must consider them at every step of the process in order to increase the viability of success. Digital Transformation is a synergistic process and the organizations that are most successful are the ones that “ride the wave” of technology, and use a well-defined strategy that receives buy-in from the end users and shows clear, and ongoing, benefits to the business.