For digital leaders, transformation can be a particularly tricky exercise: Every organization must stay competitive, yet digital transformation efforts invariably come with costs and new resource needs that can be tough to cover when every dollar counts.
Despite initial investments, the financial losses incurred by not prioritizing digitization can cost much more in today’s business environment. So the question becomes: How can you continue pursuing value-generating digital initiatives to stay competitive while being smart with your tech dollars?
Here are four ways to make your digital transformation projects both effective and more efficient:
1. Get buy-in across the C-Suite
One of the leading causes of subpar digital transformation efforts is a lack of buy-in from leadership across the organization.
Very few consequential technologies sit within a single department. Yet often, a single department makes the software buying decision without considering how the changes will impact the work of other departments. This can create friction between teams – and without leadership on board, friction can quickly turn into open conflict.
[ Related read: 5 ways leaders can maximize the value of digital transformation. ]
People and buy-in are key to the digital transformation journey. If leadership drives alignment up front, the organization can move forward confidently and ensure a smooth rollout of the new software.
2. Know what success looks like and how to measure it
Another key to efficiency in the digital transformation journey is clearly understanding what success looks like and how you’re going to measure it.
It’s surprisingly easy to miss. Without targeted KPIs to measure, keeping momentum after implementing a new solution can be challenging. Stalled digital transformation projects eat up IT budget and leave value on the table.
Conversely, data that shows improvements in business speed, revenue, compliance, etc., is an excellent way to keep people excited and engaged about the possibilities of technology – accelerating adoption and encouraging further commitments to change.
For example, contracts are integral to enterprise-wide digital transformation because they touch mission-critical business processes and govern relationships between buyers and suppliers. The pain points around manual contract management are relatively well understood – slow review times, hard-to-find documents, missed obligations, etc. But for organizations looking to digitally transform contracts, the true value is unlocked when KPIs focus on revenue, risk, and compliance.
A successful project to change how contracts – and their data – can impact a business will have clear objectives that tie back to the bottom line.
3. Don’t shy away from emerging technology
When efficiency is the goal, it might be tempting to fall back on well-established, proven technologies. That mindset fails to appreciate just how powerful today’s emerging technology is. The enormous buzz generated by ChatGPT underscores how artificial intelligence (AI) can fundamentally transform how we work.
The so-called “early adopter tax” is quickly being replaced by a “late adopter tax,” and organizations that play it safe with dated solutions will end up paying extra because:
- They will incur opportunity costs by foregoing the benefits of emerging technology.
- They will incur direct costs by investing in technology that will quickly become obsolete and need to be replaced when they can’t keep up with competitors who took a future-proof approach to digital transformation.
4. Be selective
Companies need to be brutally selective in what digital transformation projects they take on. Digital transformation is not about just implementing the software. It’s also about changing organizational mindsets around how work is done.
Change management takes time, and if employees are overwhelmed by a plethora of new systems and processes, the value of those systems and processes won’t be realized.
Zero in on digital transformation projects that truly move the needle in the organization –generating revenue, creating savings, and eliminating risk. A good rule of thumb is to ask which business processes your company cannot operate without, digital or not. That’s where transformation will impact and where the digital focus should be placed.
There’s no turning back on digital transformation, and companies cannot lose ground in the coming months due to fears of economic uncertainty. During recessionary periods, truly transformational technology often accelerates and takes hold. This pattern will repeat itself in 2023, and by focusing on efficiency and being smart with digital dollars, organizations can emerge stronger and more resilient than ever before.
[ Discover how priorities are changing. Get the Harvard Business Review Analytic Services report: Maintaining momentum on digital transformation. ]
