7 Principles of Digital Transformation Strategy

As long as you have an effective digital transformation strategy, your organization can stay competitive.

But, according to recent statistics, only 35% of organizations actually succeed in their digital transformation efforts.

Don’t let this discourage you, though. Certain core aspects can greatly increase the chances of a successful digital transformation. The first step to doing that is knowing how to do it.

This article will serve as your guide in identifying and understanding the principles and trends in building a digital transformation strategy.

Let’s get started!

Table of Contents

What is a digital transformation strategy?

A digital transformation strategy is essentially a game plan for how an organization will adopt technology to change and enhance its operations, processes, and customer experiences.

Today, digital transformation is a necessity for businesses, not just an option.

While rapid innovation and delivery are crucial in the digital landscape, digitizing the enterprise goes beyond adopting new technologies or moving systems to the cloud. It requires a significant shift in culture, processes, and workflows.

This transformation might seem a bit overwhelming at first. Change is rarely easy, especially when it’s a big shift. However, the perks of digitizing processes and tools definitely reward your business with:

Increased productivity
Higher quality products
Enhanced collaboration
Quicker responses and time-to-market
Lower risks
Agility to compete and innovate

Who should be involved in a digital transformation initiative?

Putting an organization’s digital transformation into practice is a team effort.

While some organizations may have a dedicated digital transformation team, most of the time, it involves a cross-functional approach with involvement from multiple teams and stakeholders, including:

Top executives: C-suite executives provide vision and ensure alignment with the organization’s long-term strategy and goals and beyond budget allocation. Key roles include CEO, CTO, and CIO.
Digital transformation leader: More companies are bringing in dedicated people or teams to steer digital transformation. This boosts accountability, visibility, and focus within the organization.
Customer experience team members: They play a role in figuring out customer needs. They need to make sure that the new technologies adopted during the transformation actually improve the customer experience.

7 Steps to Build Your Digital Transformation Strategy

Once you have your dedicated team, you are ready to move forward to becoming a digitally transformed organization.

When creating a digital transformation strategy, here are the seven core principles that can help guide your journey:

Assess your digital landscape

Similar to how doctors diagnose, you need to check your current digital capabilities. Start by assessing your tech stack, processes, workflows, and team’s digital skills.

Getting a clear picture of your current state will help you spot inefficiencies and figure out what to tackle first. You’ll be in a better position to find and invest in solutions that truly fit your goals, leading to better performance and a smoother user experience.

To evaluate the efficiency and completeness of your digital suite, consider these questions:

Are there processes that could be refined or automated for better efficiency?
Is there a need to improve collaboration with stakeholders or involve clients more seamlessly?
Can your existing technology handle rapid growth in user demand or data volume?
How resilient is your infrastructure against outages, disasters, or cyber-attacks?
Can customer data management be improved? Are there opportunities to automate certain customer workflows?

Lay down your business needs and goals

So, what do you want to achieve through digital transformation?

Let the future vision of your business be your drive, and use it to establish specific and measurable objectives.

For example, you may want to:

Introduce new technology-driven products or services to the market.
Leverage Artificial Intelligence (AI), Machine Learning (ML), or Internet of Things (IoT) in business processes.
Improve your online customer experience through an omnichannel strategy.
Automate manual processes that are prone to human error or painfully slow.
Enhance collaboration among departments, teams, or partners by breaking down data silos.

Remember to identify the investments that align with the organization’s unique needs and not just based on industry trends or what competitors are doing.

Form the right team

Or hire the right team.

A dedicated team can zero in on technology implementation, allowing them to dive deep into the strategies and processes that matter.

But it should not stop there.

Having a solid business strategy and the right technology partners is important for digitizing your operations, but true transformation needs the right mindset and guidance. That’s why blending strategy with strong leadership is key to a successful digital business transformation.

Plus, when everyone’s on the same page, communication and collaboration thrive, making the whole transformation effort more seamless and effective.

Note: If you think you have the right people on board but still need to fill some gaps, you can always consider IT staff augmentation.

Get ready for a digital culture shift

Digital transformation journeys are not just about adopting new technologies; it’s a bigger initiative that aims to change the organizational culture and foster new behaviors. Naturally, this can lead to resistance to change and skepticism of the “new,” so be prepared to address that push-back.

How do you handle it?

Leaders play a crucial role in developing the right mindset. They should communicate the expected culture change, engage teams, and inspire them to adjust their behaviors by showing how they align with their personal and professional goals.

Start by sharing the ‘why’ behind the change. Help your team understand how their role contributes to the organization’s digital transformation and aligns with business goals.

Set key performance indicators (KPIs)

This is nothing new. For anything that needs to be done, you need a way to measure its success.

Key performance indicators (KPIs) are measures used to assess progress towards specific goals and objectives. They help track the effectiveness of your digital transformation strategy and identify areas that need improvement.

Your KPIs and goals should align with your guiding policy and support both short- and long-term strategy implementation. Here’s what you should do:

Break goals down into immediate, mid-term, and long-term actions for the business.
Make sure teams understand both the guiding policy and the specific actions they’re responsible for.
Think about appointing a dedicated internal team to oversee all actions across the business.

Start small

As a company-wide strategic vision, there is pressure to deliver a full-scale transformation as soon as possible, but this can be overwhelming and risky. So, starting small efforts helps in a more controlled and focused capacity.

Digital transformation is a journey, not an event, and identifying the first “proof-of-concept” project is essential. This sets the stage for future initiatives and helps gain support from leaders and teams.

Demonstrating ROI quickly builds momentum for digital transformation projects. Some may offer substantial ROI but take a year to implement. The best starting initiatives are “quick wins” that show measurable results within six months or less.

Your pilot team can roll out digital and Agile changes across your whole organization. For instance, by moving to the cloud, you can use the insights gained from your internal pilot team to establish best practices that will guide future rollouts.

Implement your technologies

On to the main event: technology implementation.

This is where your vendor of choice comes into play. You must work closely with them to implement the necessary tools and technologies efficiently.

But don’t jump right in; remember that a successful digital transformation doesn’t start with technology—it starts with business strategy. So, take the time to assess the solutions you need, such as:

Data analytics platforms
Cloud-based software services
Automation tools (e.g., robotic process automation)
Employee productivity apps

For most technology initiatives, external vendors are needed and should be selected with a long-term strategy in mind. Partnering with those with the products and expertise speeds up time to value and achieves business outcomes.

Gather feedback and refine as needed

Digital transformation doesn’t end with implementation; it’s an ongoing journey.

Before proceeding full-throttle, monitor your KPIs for each project. Ensure that all parties are aware and accountable for what needs to be delivered to call the project a success.

Importantly, you should create a strong feedback loop with employees, customers, and stakeholders. Their feedback can be invaluable in identifying areas that need improvement and fine-tuning your digital transformation efforts.

At the same time, create a strong feedback loop with stakeholders to ensure everyone is learning from the experience as the digital transformation strategy unfolds.

Remember that technology and business needs are constantly evolving. So, be open to making changes and adjusting your strategy as needed. With digital transformation, you’re never confined to a single approach.

Key Trends for Digital Transformation

In 2024, a lot of organizations have been diving into digital transformation for years to remain competitive. Without an effective business strategy, you might struggle to stay in the game and fail to meet your customers’ needs.

We’ll take a quick look at some of the trends shaping digital transformation for 2024 and beyond:

Cloud and Distributed Platforms

Gartner predicts that by 2025, more than 95% of new digital workloads will be running on cloud-native platforms. This change is all about needing more scalability and agility, plus the potential for cost savings.

Keep pace by partnering with the right cloud consultants to help you determine the best strategies for your cloud workloads.

Focus on AI and machine learning

We may be in the midst of AI dominating the digital transformation landscape, but 2024 will see a massive shift in how organizations use AI and machine learning.

This year and beyond, use cases are becoming more specific, and technologies are more advanced. Companies will focus on maximizing their data and analytics engines, seeking innovative ways to leverage machine learning and AI for data-driven decisions.

Digital technologies for sustainability

Many organizations aim to go green. In addition to the cost savings, there’s an increasing focus on sustainability and social responsibility.

For many industrial companies, digital transformation can align business and sustainability goals. For example, a more efficient factory will likely use less energy. If a product uses fewer materials, it costs less to manufacture and ship. Higher quality products also have a longer useful life.

As such, leveraging digital technologies can be an effective way to achieve sustainability goals and reduce environmental impact.

Smarter investment in digital transformation

Global spending on digital transformation is expected to hit $3.9 trillion by 2027, driven by companies recognizing the role of digital technologies in enhancing resilience during market disruptions. IDC projects that discrete and process manufacturing will represent around 30% of this spending.

If you’re in these industries, focus on how digital transformation initiatives can boost revenue and create efficiencies—your competitors certainly are.

Refining processes over technology

In 2024, companies should reassess their team operations, focusing on collaboration, quick iteration, incremental value delivery, and adaptability to change.

While Agile principles have been widely adopted in software development, they are now being integrated into physical product development. Companies that successfully implement Agile see benefits such as better collaboration among distributed teams, reduced risk through transparency, and improved time to value.

Let’s Start Your Digital Transformation Journey!

Developing a digital transformation strategy is the key to becoming future-proof. But it’s not a one-and-done activity. It requires continuous effort, flexibility, and adaptability as technologies evolve, markets change, and new opportunities arise.

At Startechup, we master in creating digital solutions tailored to your business needs. With our expertise in cloud and distributed platforms, mobile app development, IoT, and more, we can help you achieve business agility and unlock new value in your organization.