Digital Transformation: Frequently Asked Questions (FAQ)
What are some of the most frequently asked questions about digital transformation?
How long should digital transformation take?
[Jason Chisholm] So, Chandler, when you think about digital transformation, I think lot of the questions that businesses ask really center around just how to start right? I think starting and understanding how long it's going to take. So how long would you say digital transformation takes for an organization?
[Chandler Stevens] Well, thank you, Jason. I think the question is not so much about how long, but it's more about the notion that transformation is not a destination. It really is a journey. There isn't really, in my opinion, a final state of digital transformation. Digital transformation inherently means that there is continuous improvement, that there's continuous capabilities being added or removed sometimes, to really allow for digital capabilities to be fully realized. I think that with digital transformation, the length of time—there really isn't a length of time to get those things started—but it's more about really understanding what are the initial goals for the process, and then mapping up against those and taking those steps.
[Jason Chisholm] And possibly revisiting the schedule as you go?
[Chandler Stevens] Absolutely. It's not a static, one time, we put the plan together and we just kind of move through the plan. It does take some continuous looking at what's happening within the business, what's happening within the market, and then more importantly, what's happening within, amongst the employees or the colleagues that are involved with digital transformation. These products are moving very fast, and so a plan that's put together with a three-year view is probably going to be invalid within 18 months.
[Jason Chisholm] Wow, good to know.
Is there an ideal starting point for Digital Transformation?
[Jason Chisholm] Chandler, I think it's fair to say that a lot of organizations are unique. And I know here at iCorps, we look at companies, and we try to figure what makes each one different from any other. And so from that standpoint, when we think about digital transformation, I think organizations are going to be at different phases of adoption, right? And so when you think about a typical company, where is a great starting point? How does an organization begin that journey of digital transformation?
[Chandler Stevens] That's a great question. Starting points are important because, I think, starting points also help organizations understand where they want to go. And the first step is to kind of look at: What are the goals? What are the things that the organization's really trying to accomplish? Are they trying to cut costs? Are they trying to reach a broader set of customers? Are they trying to build services that are going to allow them to have a more speedy delivery of new capabilities within the organization? Those are all things that are pretty important.
I think that for getting started, it's important to kind of look for what I call quick wins. Look for things that are pretty straightforward to achieve and can be achieved in, you know, a fairly short amount of time. Because what we've seen work very well for digital transformation efforts is this notion of a snowball effect, where you have maybe a small number of quick wins, and then you build on the momentum of that into a larger, perhaps more complex or diverse set of digital transformation motions, and then eventually having a much more impactful approach across the organization.
So maybe start within a department, maybe start within a specific group, and have some wins there to talk of, and then champion those throughout the organization.
[Jason Chisholm] So would you say that it's important that there's a perception internally? So when you talk about the different groups or departments and the snowball effect, is it starting with a group that will perceive there's a change and then building on that?
[Chandler Stevens] As we often say in our industry, perception is reality. But it's also important to have some data behind that so you can show real gains, whether that be in a revenue sense, or maybe in the sense of reducing cost, or in—maybe reducing time-to-market of a certain product or service.
[Jason Chisholm] Got it. Understood.
What is the average cost of Digital Transformation?
[Jason Chisholm] Digital transformation sounds like it could be a very expensive undertaking. I don't know if that's true, right? I think it probably all depends on the organization. I think what I'd like to know, and I'm sure a lot of our customers would like to know, is there a general cost when you're thinking about doing this? What's a perceived budget for something like this?
[Chandler Stevens] Well, Jason, I think it's important to—when you talk about cost and digital transformation—for me, it's more about, what is the cost of not doing it? There's definitely cost if you decide as an organization that we're not going to embrace this new capability or these new services, even though perhaps our competitors are. And so there is this notion that to stay ahead or stay in step with industry norms, or norms within the marketplace, it's important to have a digital transformation story and strategy. So costs are important to consider, and certainly, we recognize that not every organization has huge budgets for digital transformation. But it's important to look at it more from the lens of what do we do to really kind of think about cutting costs initially, and then have a digital transformation lead-in?
[Jason Chisholm] Can you definitely spend money the wrong way?
[Chandler Stevens] You can. You can spend money in the wrong ways in areas of looking at technologies that are, quite honestly, maybe very short-lived, or perhaps haven't been quite true tested in the environment or in the industry. I think that when you're looking at cost control, and you're looking at where to place your money, it's important to think about the fundamentals. Think about the ability to have employees able to perform work anywhere on any device, as an example. So definitely an investment there would make sense because you're raising the productivity and giving your organization a better chance to have—not be constrained by not being able to access email or not being able to access resources at any given time.
[Jason Chisholm] Ok, thank you. Great answer.
What is the success criteria for Digital Transformation?
[Jason Chisholm] Can you talk to us about some success criteria associated with digital transformation? As an organization is going through this exercise, what are some of the things that we can look at as ways of measuring if it's working or not?
[Chandler Stevens] I think the primary measurement is this notion of agility when adopting a new business process, technology, or product. Having the agility to really be able to see end-to-end, what is this new process going to do for our organization? Digital transformation lends itself to being able to have that picture and not necessarily have to take a guess or estimate about what that effort would look like. Digital transformation allows the organization to really say, how are we doing against the current processes, and how have we improved time over time? Same follows true for this notion of making informed decisions based upon new insights that are gathered from analytics, from digital transformation processes. Digital transformation lends itself to being able to collect data in a variety of different ways and really provide some insights on top of that information so that more informed decisions can be made and not decisions made, again, based on guessing or guesswork or with invalid data.
[Jason Chisholm] So having an understanding of things that you want to accomplish, whether those are goals or milestones, as an organization helps you figure out what's working and what may not be working.
[Chandler Stevens] Yeah, absolutely. I think that for the organizations that are data-centric and can really have a very good picture of their end-to-end processes, whether they be a manufacturing floor or a financial services organization. Having that data in hand and being able to apply analytics against it is a huge differentiator for those organizations embracing digital transformation versus the ones that have a lot of data, but they're not really doing anything with it—they're just simply stockpiling it, and they're not really providing analytics against it to make those decisions.
[Jason Chisholm] Right, so knowing what you want helps you determine if there's success or possibly failures.
[Chandler Stevens] Having those goals in mind at the beginning is important, but also having the patience to understand that those goals may evolve over time as well. What you think you know today based upon the current data that's being collected or the current analytics being collected may very well change in six or 12 or even 18 months' time. So it's important to have some agility, some flexibility, in embracing what you don't know today and things you can learn for tomorrow.
[Jason Chisholm] Wow, great points, and thank you for sharing your insight.
When will a company start to see an ROI on their Digital Transformation?
[Jason Chisholm] So Chandler, as we're starting to get to the end of this journey in digital transformation, I think return on investment is probably one of the biggest driving forces for any organization. So at what point would an organization expect to see some return on this as they go through it?
[Chandler Stevens] There's a lot of ways you can look at ROI, and I think obviously there are industry norms, and every organization has a way for them to kind of think about what does ROI mean to them. For me, I look at it in terms of a couple of different areas. One is a better customer experience. For those organizations that are in the service industry or perhaps have a variety of different customers, having a better customer experience is obviously one of those areas where you can see a very quick return on investment by embracing digital transformation.
Enhanced brand reputation is another one. Again with this notion of embracing new customers or building a customer base, having a strong brand aligned with a digital transformation strategy is oftentimes a very quick—not quick—but a very straightforward way of understanding the impact one's having in their respective industry.
Moving to the operational side, having streamlined operations is important as well. If you think about what it takes today for an organization to maybe get out of PO prior to a digital transformation effort and then applying digital transformation capabilities and seeing what increase of velocity that process can be and streamlining the operations. That's an important area to focus on as well.
And then, kind of the one that really, I think most everyone understands is increase in sales. Are we seeing more opportunities come our way? Are we seeing an increase in our sales, not only from a quantity perspective but from just a pure volume perspective in terms of the deals that are growing as a result of being able to embrace digital transformation capabilities?
[Jason Chisholm] Can I just say, as a sales professional, that's probably one of my most favorite ones.
[Chandler Stevens] Okay, yeah no doubt.
It's a favorite of a lot of folks as well because obviously increased sales leads to a lot of different things down the road. And again, having increased sales results in having the ability to go back and reinvest, and again kind of goes back to my earlier comment about the snowball effect. That could be one of those areas where once sales goes up, then you're able to make some investments and start really, again, applying more digital transformation capabilities across the organization.
One other one I want to make sure—we talked about this earlier, but I think it's important to mention, is the improving management decisions, again, based on data. Having analytics and having information to really look carefully at a business operation or even any sort of operation that has a number of data points along the way—that's an important part of the ROI discussion because having better decisions, again, can yield better investments, can yield, of course, a better outcome, and a better reach for customers. So those are all things that really fall into mind when you think through the return on investment.
[Jason Chisholm] That's great information because I think it's quite possible that most people just focus on that initial cost—
[Chandler Stevens] Absolutely.
[Jason Chisholm]—or whatever that price tag is associated with that, and I think what you're telling us is that it's a much deeper conversation than that.
[Chandler Stevens] It is. And I'd say one last thing I'd want to mention is this notion of company culture. We talked a little bit earlier about brand. The company culture that encourages creativity and innovation is another hallmark, I think, of digital transformation. And we know that today we have a workforce entering that is very highly digitally sophisticated. And so organizations that are willing to really look at how they can invest and not only attract that top talent, but retain that top talent, it's important to understand how digital transformation factors into those discussions.
[Jason Chisholm] So to simplify that last statement, if you're looking to recruit great talent and retain that great talent, you probably want to have an environment that meets expectations.
[Chandler Stevens] That's right. You don't want to have an environment that looks like 1995. You want an environment that has a more modern approach to collaboration, a more modern approach to allowing individuals to connect with one another, regardless if they're in the same department or the same team. And the ability to really have a high innovation cycle so that new ideas can be brought to bear at a much quicker fashion without having to go through some of the old processes.
[Jason Chisholm] Excellent. Well, thank you, Chandler. I appreciate that, and thanks a lot.
[Chandler Stevens] Thank you, Jason.
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