Digital Transformation Best Practices

There’s no official digital transformation framework or guide you can follow to achieve X or Y critical outcome.

But – there are a few things successful “transformers” tend to have in common.

For example, they look at the overall perspective, while maintaining focus on a specific goal. They give workers what they need to handle change, help them solve problems, and take action.

And, they view digital transformation as a “forever commitment” to constant improvement.

We put together a list of seven “best practices” to help your company successfully navigate transformation — cycle after cycle.

1. Stay Laser-Focused On Outcomes

Your strategy needs to align with outcomes, not technology, processes, or implementation projects. These things are merely tools for achieving the outcomes laid out in your big-picture game plan.

We asked Velosio DX experts to define what a successful digital transformation initiative looks like to them. Their responses, while varied, largely focused on achieving specific, high-level goals like:

• Empowering end-users and engaging them throughout the process.
• Capturing and acting on feedback in near real-time.
• Providing continuous learning & development opportunities.
• Ensuring that key sponsors remain involved and invested in driving and sustaining change.
• Delivering new capabilities and solutions that improve end-user productivity.
• Achieving a high (and quantifiable) user acceptance rate.
• Maintaining consistent digital communication & collaboration across the entire org (and the customers and partners it works with).

Notice how all of these examples don’t have anything to do with, say, AI, automation, or specific platforms like Dynamics 365.

You might use D365 to improve digital collaboration or boost productivity — but only after determining that it’s the best tool for that job. Additionally, there might be something better for achieving those goals in the future. Taking an outcome-driven approach helps orgs focus on achieving goals by any means necessary.

Solutions might be high-tech, low-tech, or completely unexpected. But — the point is, your choices must always be driven by data-backed needs and use cases, not assumptions.

By the way: Microsoft has a handy “business outcome template” designed to help users engage stakeholders, align business drivers and KPIs, and start productive conversations about what’s next for DX.

While the focus is on cloud adoption, the documentation is worth a read – particularly if you need help documenting outcomes and aligning them with potential solutions and the overall strategy.

2. Think Holistically

This piece of advice builds on the last one, but focuses on driving outcomes from a slightly different angle.

Anything overly focused on a single product, practice, or business unit (think – tech-led IT upgrades) isn’t a transformation. Nor is any initiative that only solves one-off problems or addresses the immediate needs of the end-user or client.

That’s not to say these things aren’t important. It’s just that digital transformation can’t happen in a vacuum. When you make changes to one area without considering the impact on the rest of the business creates inconsistencies, complexities, etc. you’ll pay for down the line.

The lesson here is, even if your immediate goal is, say, streamlining collaboration between sales and marketing, you’ll need to consider who else is affected by sales-marketing alignment – be it others in the org or the partners, customers, and vendors on the outside that read your content or engage with employees.

Instead, MIT-Sloan experts advise business leaders to aim for connected, dynamic operations.

Meaning, you’ll want to focus on, say, connecting products and services with content and contextual support so customers receive a consistent experience across all touchpoints.

Or — adding AI analytics to workflows and processes to better manage, optimize, and enhance operations – across entire buildings, job sites, distributed business units.

3. Embrace Design Thinking to Prioritize the Customer Experience

If you’re not familiar with the term, design thinking is an iterative approach to problem solving that aims to improve products and services. It’s all about trying to understand end-users, challenging assumptions, and developing innovative solutions through testing and experimentation.

But, more crucially, it’s about putting customers first — using data and direct feedback to develop empathy with users and build solutions that truly provide value.

Design thinking isn’t new — tech giants like Apple and Google have embraced it for years. But, it’s starting to gain traction among companies in other sectors — including Americana Group, a CPG and restaurant operator based in the Middle East.

Navdeep Agarwal, Head of Business Intelligence at the Americana Group, explained that the company’s limited analytics capabilities prevented leaders from making the strategic decisions that grow revenue, reduce waste, and shape consistently great customer experiences.

Sales and marketing teams lacked access to visual dashboards with usable insights, and fragmented data management provided limited visibility into the 2000+ restaurants managed by the group.

To address these issues, the group built a self-service analytics ecosystem using Azure Synapse, Azure Data Factory, and Power BI, which unlocked critical insights for all departments — finance, operations, HR, sales, etc.

Now, Agrawal says, the company has full visibility and total control over all parameters that impact the customer experience at each location. For example, a user can log into Power BI to track restaurant performance against KPIs that shape the in-store experience.

They might look at what the most profitable restaurants are doing or what items are on the menu. Then, they can use those insights to make decisions that help underperforms get back on track. Think — updating menu items or automating tasks so that customers spend less time in line.

What’s more, employees can monitor critical metrics in real-time and make changes in that moment based on the data — rather than waiting for feedback to make its way back to corporate.

4. Use Disruption as a Learning Tool

In a recent survey, McKinsey analysts found that disruption can be a powerful tool for “honing strategic agility.”

Participating business leaders said that while coping with recent disruptions like COVID, the shift hybrid working models, and rising inflation had been challenging, they developed new skills that

Respondents also stated that these shakeups offered a rare opportunity to reflect on the big-picture, and realign priorities around a different set of goals.

For Every Morning Consulting, a sales advisory firm, embracing disruption as a learning experience was a win for the business, as well as clients struggling with similar challenges during COVID.

Owner Javier Lopez de la Fuente says, in spite of the disruption, the firm was able to maintain profitability in the early days of the pandemic

because employees committed to learning new techniques for adapting to change.

Those lessons allowed Every Morning to quickly pivot from in-person meetings to online channels via Microsoft Teams, and adapt its service model around changing conditions.

The same McKinsey report also recommends creating an “agile center of excellence” or CoE to help people shift toward new ways of working. The idea is, transitioning to agile is a transformation in and of itself.

And, as such, employees need a consistent framework for navigating disruption and uncertainty.

Business leaders can ease the transition by providing consistent communication re: new expectations and processes — both verbally and in documents employees can access through the CoE.

They might also provide things like a framework for using data to assess challenges and take action amid uncertain conditions.

5. Build Strategic Partner Ecosystems

Different types of partners can help you achieve different goals.

You might work with a Microsoft Partner like Velosio, a cybersecurity firm, and a stable of niche consultants that help you gain access to experts with specialized knowledge based on key goals.

You might also form strategic partnerships with outsourcing companies, freelancers, DX partners (among others) are critical to long-term success.

These types of external sources provide on-demand access to talent, expertise, and supplemental services that might not require a full-time internal hire.

According to the MIT paper mentioned above, some companies, like Target and UPS, are building their own gig worker networks to tackle labor shortages on-demand. Rather than outsourcing to a middleman platform that takes a cut and eliminates human-to-human contact, in-house platforms help companies connect with former employees and retirees who can fill gaps on an as-needed basis.

Here, you see companies embracing a model used by Uber, Doordash, and other gig platforms — but they’re using it in a different way to nurture critical partnerships with real, vetted humans who understand the expectations of the role.

6. Introduce Org-Wide Governance

Data governance facilitates digital transformation by supporting data integrity, availability, usability, and security.

Done right, data governance establishes a system of accountability that preserves data quality, protects critical insights, and promotes access and proper usage throughout the entire organization.

Forrester predicts governance teams will continue to grow in 2023 —and it’s easy to see why.

Governance is super crucial – particularly as you scale, pivot, or shift to a distributed workforce model – for a few key reasons:

• It protects your business. Governance enforces culture, compliance, and security – allowing business leaders and IT to focus on other, more valuable work. Leaders can move away from surveillance activities — allowing them to provide more support to their teams and ensure that everyone stays aligned around shared objectives.
• Employees get the autonomy they need to make decisions and test their ideas. Built-in guardrails support quick decisions and experimentation, while also ensuring that employee mistakes won’t cause any future meltdowns.
• Templates and automations that enforce quality and compliance standards help everyone produce better work faster. For example, you can set rules that automatically preserve data integrity – that way, users can spend less time on data entry and manual audits and make quick decisions with full confidence they’re working from accurate insights.

There’s more where that came from, but the point is, governance is more about way more than security and compliance. It’s a strategic enabler that helps companies become more innovative, agile, and, ultimately, future-ready.

7. Audit & Refine the Transformation Process

According to HBR, the real value of DX can’t be achieved after a single round of improvements.

You’re trying to transform the way you capture, create, and deliver value to your customers. But, because “value” is defined in context with real-time needs and conditions.

It also doesn’t happen all at once. If you’re starting from scratch, it’ll be a long time before you can unlock any real competitive advantage. But, you’ll still see meaningful improvements.

So, transformation needs to be this constant cycle. Where you’re building capabilities phase-by-phase. And at the same time, making incremental improvements to your strategy based on what you learned during prior phases.

The HBR piece explains this “layering” approach using the example of a retail client that began its DX journey in an effort to slash operating costs by reducing excess inventory.

While cost-cutting was the main objective, the retailer needed to upgrade its data management systems in order to enable the advanced AI and analytics capabilities they needed to achieve that goal.

That initial upgrade paved the way for a much bigger transformation. Eventually, the retail company was able to leverage insights from prior phases (focused on things like cost-savings and customer satisfaction) to reinvent its entire approach to product design. As a result, they embraced a more proactive design strategy based on patterns and insights from the new platform – leading to double-digit revenue growth.

Again, digital transformation is all about objectives. Each phase must focus on a specific goal that moves you closer to your bigger picture objectives.

And, every time you reach the end of a phase, you’ll want to conduct a post-mortem to determine whether your efforts produced the right results. A few questions you might ask yourself:

• Did you achieve your target objective?
• What worked? What didn’t work?
• What did you learn from this experience?
• How might those lessons be used to improve future initiatives?
• What processes might be standardized or revised?
• Etc.

Then from there, you’ll want to use your answers to refine your strategy before starting the process all over again.

Final Thoughts

The big takeaway here is that digital transformation is an ongoing process. It takes time to achieve digital mastery, and the goal post is always moving. The tips we’ve outlined here aim to help you drive consistent wins by adapting to changing technologies and conditions.

Velosio’s Digital NEXT program provides strategic guidance, support, and a proactive framework for driving optimizations at every stage in the DX journey.

Get in touch to learn about our process, solutions, and proactive approach to client engagement.