A Guide to Digital Transformation

It’s widely accepted that change is the only constant. Unfortunately, humans are inherently resistant to change, and digital transformation is no different. Many employees resist digital transformation as they fear the loss of job security, haven’t yet experienced the benefits of digital solutions, or can’t see the bigger picture.¹ In addition, only 30 percent of organizations that embark on digital transformation efforts achieve their desired outcomes.²

Digital transformation is a complicated undertaking, and your approach needs to be both practical and strategic. Fortunately, many businesses are leading the way in terms of successful transformation, giving those lagging behind a tried-and-tested approach to follow.

The best examples of effective digital transformation generally have six strategic approaches in common:

Six steps towards successful digital transformation

Companies that achieve transformation success all have a clear vision, and you should have one, too.

Before digital transformation begins, you need a crystal-clear strategy that outlines your transformation efforts: why, what, and how.³ The answers to these questions will form the foundation of an effective, integrated vision and approach.

Start by asking yourself the following:

1. Why is transformation critical to achieving a competitive advantage?
2. What does a successful digital transformation plan look like?
3. Is our leadership team aligned on objectives and timelines?
4. How do our digital transformation efforts align with our overall business strategy?
5. What are our key milestones, and do we have a detailed roadmap of how to prioritize and achieve these goals?

Each outcome should be tied to a specific business objective.

Having a clear vision is the first hurdle you’ll have to overcome to set your digital transformation plan in motion. Next comes the challenge of ensuring the team leading your transformation process moves in the same direction and focuses on the same timeline and milestones.⁴

Although C-suite and board-member involvement are key to achieving success, buy-in across multiple levels of leadership is required to drive your objectives forward. For example, middle-management employees are critical in driving transformation, as they’re the feet on the ground, implementing projects, managing change within the broader organization, and providing feedback to key stakeholders.

To drive accountability, each manager involved with your digital transformation effort needs to understand their specific objectives clearly, how these feed into the overall effort, and what KPIs they’ll be measured against.⁵

When implemented correctly, digital transformation can increase productivity and positively impact a company’s balance sheet. The reason for this is, counter-intuitively, human. Ensuring that the people using your technological solutions do so with ease is critical to a seamless transition.⁶

The technology you’re considering should ultimately have a positive impact on your team, your customers, and any external partners and stakeholders. User-friendly customer-facing interfaces, workload realignment, and bridging skills gaps in your workforce can, for example, ensure you reach your transformation goals.

Successful digital transformation requires having the right people in the right jobs. There are two ways to deal with the skills gap that digital transformation can create in your organization:

1. You can upskill your existing team, empowering them to adjust to using new technologies.⁷ Your current employees understand your market, business, and customers, making them integral to your organization.
2. You can bring in new people who understand the relevant digital technologies or have experience with digital transformation initiatives. They could help your organization stay focused on the processes required and assist with upskilling existing staff.⁸

By correctly assigning the most relevant, capable resources to positions in which they’ll be most effective, you’re creating a workforce and culture that can drive your transformation efforts – and your organization – forward.

Your digital solutions should be specific to your organizational context. However, most successful businesses focus on optimizing legacy systems and infrastructure, delivering streamlined customer experiences, decreasing expenses, and extracting sufficient data and analytics to help inform their future strategic decisions and ensure long-term resilience.⁹

Make digital transformation a strategic priority and optimize your digital business models with the Organizational Design for Digital Transformation online short course from MIT Sloan Executive Education.

Regardless of the digital technologies you choose to implement, the solutions should be secure and scalable.¹⁰

Carefully considering the five points above will get your digital transformation journey off to a strong start. But that shouldn’t be where the process stops: failure to test new processes and measure progress could slow your efforts.¹¹

To keep your organization’s digital transformation on track, regularly check how your team and other stakeholders are progressing. Keeping tabs on their efforts will enable you to address challenges as they arise, keeping your digital transformation plan both adaptable and robust.

Kickstart your journey

Are you ready to set your organization on a digital transformation path? In the six-week Digital Transformation online program from the Rotman School of Management at the University of Toronto, you’ll gain key insights into the principles, technologies, approaches, and considerations behind successful digital transformation. Guided by expert faculty, you’ll explore practical case studies and design a customized transformation plan to immediately implement within your organization with the goal of improving business operations and staying competitive in a changing marketplace.

Learn how to leverage a human-centered approach to effectively navigate digital change in your organization on the Managing the Human Side of Digital Disruption online program from MIT Sloan Executive Education.