You may have heard much about digital transformation and the benefits it can bring your organization. However, you’ve also heard that many digital transformation projects fail. So what can you do to reap the rewards of digital transformation while avoiding the pitfalls?
Use this three-step process to help you plan your digital transformation projects. The first step is digital sensing, the second step is digital seizing, and the third step is digital transformation. Each step has activities to help you set up your digital transformation project for success.
Step One – Digital Sensing: Start with the digital scouting activity,which involves scanning the environment to determine the new digital technologies that have appeared and which digital technologies your competitors have adopted.
The second activity is digital scenario planning. The organization runs pilots to test the new digital technologies to determine which will most benefit the organization. Once the organization adopts a new digital technology or technologies, the third activity is digital mindset crafting. Digital mindset crafting encourages people to consider changing their processes to utilize the newly adopted digital technologies best.
Step Two – Digital Seizing: Like digital sensing, digital seizing also has three activities. The first activity is rapid prototyping which involves integrating the new digital technology (or technologies) into the organization’s processes. The second activity, balanced digital portfolio, helps the organization realize the benefits of the latest digital technologies while avoiding the danger of path dependency. Path dependency is when your choice of technologies constrains your organization’s decisions. The third activity is strategic agility which is the organization’s ability to take advantage of opportunities by retooling, re-engineering, and rescaling the organization’s processes, programs, projects, and operations.
Step Three – Digital Transformation: The first activity in this step is to navigate the organization’s innovation ecosystems to magnify their benefits by tying the digital technologies together. In addition, the organization may need to redesign internal structures to better communicate and collaborate with the workforce and to implement a more effortless data flow. The second step in the digital transformation step is digital maturity where the new digital technologies are fully integrated into the organization and efficiently produce benefits.
The organization then decides if it wants to go through the three steps again. Three triggers compel organizations to undertake digital transformation. The first trigger is the presence of disruptive digital competitors. For example, if your competitors adopt new digital technologies, you will want to take the first step of digital sensing. The second trigger is that consumers are changing their behaviors. For example, do consumers expect quicker delivery or more personalization with their services and products? The final and third trigger is the rise of disruptive digital technologies in the marketplace. Anyone or all three of these triggers are your signals to start the three steps of digital transformation.
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