What is a digital transformation strategy, and why does your business need one?

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What is a digital transformation strategy, and why does your business need one?

Digital operations are the future of business. Companies that embrace this change will be better poised to succeed as the business world continues to shift.

by Katherine Gustafson
updated November 08, 2022 ·  5min read

With technology advancing rapidly and work methods changing profoundly, many companies are interested in developing a digital strategy and digital transformation process. Indeed, digital operations are the future of business. Companies embracing this change will be better poised to succeed as the business world shifts.

Transforming your company’s digital operations requires a strong strategy—a roadmap that lays out your company’s motivation for digitizing, its specific goals, and its plan for implementation and improvement.

Two women, one with an open laptop, sit at a table and look over paperwork. Transforming your company's digital operations requires a strong strategy.

What is a digital transformation strategy?

A digital transformation strategy is a plan for progressing from reliance on physical operations and activities to digitized and/or automated operations and processes.

There’s no one-size-fits-all digital transformation strategy because businesses are all different, varying in industry, size, operational needs, workflows, and other factors. The one common denominator is the need to become more efficient through digitizing and/or automating tasks.

“A digital transformation strategy involves taking existing processes and identifying how new technologies can make them more efficient or effective,” says Sam Underwood, vice president of strategy for Futurety, an Ohio-based data analytics firm that has helped dozens of companies tackle digital transformation. “This may happen through automations, or it may involve digitizing traditional operations—switching to greater focus on digital marketing or other online communications.”

Why you should have a digital transformation strategy

A digital transformation strategy helps businesses reposition themselves for the digital economy. This realignment is essential to enable growth as the business world changes and customers demand more efficiency and digital engagement.

“The way we conduct business is shifting at a rapid pace, especially with the pandemic forcing a lack of human contact for an extended period,” says Amanda Freick, chief revenue officer at Altruistic. This consultancy supports companies through digital transformation, with core team members in the U.S., U.K., and Italy. “You can never fully be future-proof, but it’s clear being digitally enabled is a step in the right direction.”

Technology allows business owners to automate processes that are slowing their operations down. This enables the company to work more efficiently, reach a larger audience, and grow more quickly.

“Through implementing a tech-stack that works together, a small business has a large opportunity to grow,” says Leonard Scheiner, CEO and founder of California-based Geek Haus. Scheiner spent more than a decade heading operations and marketing for law firms.

How to build a digital transformation strategy

Companies looking to learn how to develop a digital transformation strategy should be aware that the process will depend on the nature and needs of their business. Hiring a consultant or other outside advisor can help ensure that you adopt the most appropriate strategy.

“A digital transformation is a highly involved process and requires both determining the best tools that will lead to success, as well as the right people to shepherd it through the organization,” says Underwood. “Without both of those present, it’s likely to fail or underperform.”

While the details will vary for each company, there are a few general steps in building a digital transformation strategy that all can adhere to.

Align on your ‘why’

The first thing you need to do is identify the “why” behind this project. Reasons like “everyone’s doing it” or “digital is the future” don’t hit on the purpose digital transformation will serve for your company specifically. Think instead about your larger goal: What kind of company do you want to be in one, five, or ten years?

“Our most important piece of advice would be to make a clear mission statement about why you are undertaking a digital transformation strategy,” says Underwood. “Without this north star, these plans often fail—team turnover or organizational inertia makes it too easy to shelve.”

Set specific goals

Identify quantifiable goals for transformation, organized by categories like operational efficiency, customer experience, revenue generation, and employee engagement. Which processes need to become more efficient and may be helped by digital tools? Identify which specific changes will contribute to each of your goals, with a focus on automating rote or repetitive tasks that don’t need human intervention.

“Digital transformation is all about automating low-value tasks so that your team can focus on high-value activities,” says Tim White, the CEO and founder of Michigan-based MilePro, an online travel resource with a fully remote workforce. “Small businesses are already understaffed and working on shoestring budgets, so they can’t afford to have their few employees working on low-value tasks that aren’t moving the company forward.”

Map out an implementation plan

When you’ve identified the goals and what changes can help meet each of them, map out the process for implementing those changes. Part of that process should be assessing the many tools that might help you reach a particular goal and only implementing the best ones for your needs.

“Don’t get shiny object syndrome,” says Freick. “There are endless SaaS products that offer subscription-based services. Before you know it, your free trial of 10 different tools has expired, and you’re paying hundreds or thousands a month without getting the ROI.”

In making your plan, include projected timelines and estimated ROI, and get help from digital transformation experts to ensure you stay on track and do things efficiently. Most importantly, make sure your plan is realistic and achievable.

Gather feedback and refine as needed

After you’ve implemented your new tools and digitized various processes in your business, get ready to problem-solve and iterate. You’ll want to find ways to gather honest feedback from your staff and customers, so you know what is and isn’t working.

“Transformation is a process, not a one-time event,” says Scheiner. “Technology is ever-evolving, and so will your business as you continue to grow and have the need for more growth or smoother operations.”

With a digital transformation strategy, you can continue to make your processes even better and more efficient as technology and business continue to change.

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