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Digital transformation is here, and many businesses are racing to change to take advantage of the benefits. Digital transformation promises more revenue, a better customer experience and a new level of productivity that you have never seen before. Except by pursuing change in haste, these companies are messing up digital transformation.
Just because companies have the means to digitize, doesn’t mean they’re ready. Even if they possess the tools doesn’t mean they’re yielding any real value out of big data, machine learning and other emerging tech. So, what are companies doing wrong? They’ve simply lost focus and need to find it. Let’s take a look at how companies are messing up digital transformation, the consequences, and how to fix it.
The Consequences of Messing Up Digital Transformation
Before we get into anything else, it is critical to understand the consequences that come from a failed digital transformation. Businesses will suffer in more ways than one.
- Loss of revenue. According to a study completed by MuleSoft, four out of five businesses are expected to see a negative impact on revenue in the next 12 months if they fail to complete digital transformation initiatives. This could mean a completely ruined transformation, or none at all.
- Loss of time. The transformation takes time and effort of your entire business. This is time that you cannot get back that is potentially being wasted if your transformation fails.
- Loss of productivity. You have your marketing team working on mounds of data to create random marketing collateral. You have your sales team picking through that same data for insights on how to sell. The issue here? There is a huge loss of productivity without a clear plan. No plan? No transformation.
One of the main parts of the digital transformation is to fail fast but failing as a whole like this will do more harm than good. Invest time, create a plan, and you’ll stop messing up digital transformation in your company.
What Are Companies Doing Wrong?
Most businesses and vendors are approaching the digital transformation in the same way. It looks something like this:
- Digitize everything. And that means everything. For example, in manufacturing, this may look like installing and enabling sensors on everything possible. Instead of creating a plan, digitization starts full force, taking everything in its path. Just because it can be digitized doesn’t mean it should be. Really think about what in your workflow could be improved by digitization and start there.
- Collect giant amounts of data and analyze it. I’ve said it before, just because you can collect data, doesn’t mean you need to. We’re seeing giant amounts of data are collected, without any real direction. This causes a collection of good data and a whole lot of noise to sift through. Sifting takes time and effort that you simply cannot afford during the transformation. Most data will go to waste due to the overwhelming amount of it.
- Try to make something happen with the data to increase ROI and drive value. After the incredible amount of data is gathered plus the insights, businesses attempt to try something happen with it, haphazardly choosing what sort of makes sense. Again, there is no plan, only some data to support some hypothesis of a hundred processes.
Does this sound familiar? It can be entirely frustrating to say the least. However, there is a better way. It is time organizations flip this pyramid around. I’ll show you how.
Flip the Pyramid: The New Digital Transformation Process
What does a true digital transformation strategy look like? It looks like a pre-meditated plan that will take your target areas within your business, mix it with some data solutions and make a huge difference in your ROI. Here are the steps:
- Define the process you want to fix FIRST. You must define what business process you want to fix upfront. You should focus on one specific problem area instead of everything all at once. Digitize where you need it most, instead of conducting a giant science experiment, hoping you will uncover a problem and solution along the way.
- Collect data from that process. By focusing, you will eliminate all other noise from the inputs you receive. Focusing will also allow you to get your analytics projects up and running much faster, since you’re digitizing one process, instead of the entire business. Once data starts coming in, the insights you gather can be related to one area, allowing you to have a great snapshot of your progress.
- Use directed insights to improve ROI and drive value. The data you gather can now be used to drive focused insights into the problem area to reach your desired ROI and to drive value for your consumers. You will not have an overwhelming amount of insights to try and direct towards a hundred projects. Instead, you are left with a focused campaign.
Still not sure where to start? Take a look at these companies that are killing it in the digital transformation and learn from their example.
You can avoid messing up digital transformation in your business. Define the process you want to fix first, collect data from that process alone and use this data to create directed insights. With these three steps your business can improve its ROI and drive much-needed value. Flip the pyramid and take steps to improve transformation in your organization. It will make a difference, trust me.
This article was originally published on Forbes.
Daniel Newman is the Chief Analyst of Futurum Research and the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio