Developing a Digital Transformation Strategy for the Future (2024)

In today’s fast-paced, tech-heavy market, you don’t have to look far to see the impact of digital transformation. And it’s not just shiny Silicon Valley startups that are affected. Established companies and industries are being disrupted every year by ever-evolving and advancing technologies.

In 2009, Uber transformed the entire taxi industry. Other digital transformation examples include the retail behemoth Amazon, which launched its cashier-less checkout store Amazon Go in 2019, and Google’s foray into self-driving vehicles.

For businesses large and small, new and experienced, the need for digital transformation is clear.

The question is how to get there.

Why you need a digital transformation strategy

The digital economy is marked by rapid development, evolution, innovation, and disruption. Companies that want to keep up have to be prepared to adapt to this new digital landscape.

But undergoing a digital transformation is about more than simply adopting new technology, investing in fancy gadgets, or upgrading current systems.

Those steps are important, but they aren’t the whole picture. If you want to remain competitive, you can’t just react to changes—you have to anticipate them and drive innovation yourself. To do this, companies have to plan ahead and be active designers of their own future.

That’s where a digital transformation strategy comes in.

A digital transformation strategy helps leaders answer the following questions for their business:

• Where are you now?
• Where do you want to be?
• How are you going to get there?

To protect against digital disruption and successfully navigate your digital transformation, businesses need to develop three core competencies:

• Awareness
• Informed decision-making
• Fast execution

In other words, companies who don’t understand their processes and operations can’t identify business priorities. After all, if you aren’t aware of a problem (or an opportunity), you won’t be ready to tackle it.

Additionally, businesses need good data and resources to inform their decisions so they can take advantage of opportunities and mitigate risks.

And finally, businesses need the agility to execute those strategic decisions with speed and precision. Otherwise, the competition will outpace and outstrip you.

Without these capabilities built into the fabric of your business processes and culture, your digital transformation will stall.A strategy and digital transformation roadmap can help you develop and harness those capabilities effectively.

Here’s how to get started.

Building your digital transformation strategy

Use the following steps to craft a winning digital strategy.

1. Get buy-in

Before you can start building your digital transformation framework, you need buy-in from the top down. Digital transformation is a big endeavor that affects every part of the business, so you can’t implement a strategy without buy-in and alignment from all key players in the company. The leadership is responsible for sharing the company vision with the rest of the organization.

Without a united team, your digital strategy is sunk before it ever left the harbor.

2. Secure funding

Once everyone is on board, you can start crunching numbers. How many funds can you allocate to this initiative?

Keep in mind that digital transformation is not a one-time project. It is an ongoing approach to how you do business and will touch on all parts of the organization (including all departments, employees, and customers).

Your budget will help you structure your ultimate strategy going forward, especially as you identify priorities, allocate resources, and determine scope.

3. Assess your current state

Once you have buy-in and a ballpark budget, you can start laying the groundwork for your strategy. The first step is to assess your current business state. You can’t map out where you’re going if you don’t know where you’re starting from.

A current state analysis will help you:

• Assess the organization’s culture.
• Evaluate the workforce’s skillset.
• Map out current processes, operations, organizational structure and roles.
• Identify opportunities and pain points that need to be addressed.

One of the biggest mistakes companies make when undergoing a digital transformation is assuming that they can simply migrate their current technology to a new platform or system (like the cloud or AWS) without considering their current processes. Conducting a current state assessment gives you the information you need to make strategic decisions about your digital processes and resources.

Lucidchart helps you map out your current state so you can visualize where you are now and more easily identify gaps and opportunities for where you want to be.

4. Identify your goals and desired outcomes

With a clear understanding of where you are now, you can start looking to the future. What are your digital goals? What do you hope to achieve? What experience are you trying to create for your customers and employees?

As you consider these questions, remember to focus on the long game. A digital transformation is about reaching for fundamental, long-term goals. Be bold and ambitious in your vision.

5. Conduct a gap analysis

You know where you are and where you want to be. So now you can identify the gaps and opportunities that exist between those two states.

Consider:

• What areas need to be bridged (e.g., customers, stakeholders, employees, skills, culture)
• What redundancies or inefficiencies exist?
• What resources, processes, or information will you need?

6. Create a digital transformation roadmap

Now that you’ve outlined your goals and what gaps exist between your business and those objectives, you can create a strategic roadmap to help you achieve your vision.

Map out how you will get from Point A to Point B. This might include reframing infrastructure, reskilling employees or recruiting new talent, updating your tech stack, and transitioning to a new (more agile) development process. Your roadmap should outline the key goals and priorities, intermediate objectives, a timeline with milestones and benchmarks, and key players and roles for each area of the plan.

Keep in mind that a roadmap should be adaptable and evolve with your business and the changing priorities of the digital landscape.

Common pitfalls to digital transformation

Even the best-laid plans can run into roadblocks. Watch out for these common pitfalls when developing and implementing your digital strategy.

Resistance to change

Change is hard, which can make it difficult for you to win over hearts and minds to your bold new plans. Whether it comes from the leadership, staff, or customers, resistance to change can quickly derail your digital transformation.

Work with stakeholders early on in the process to get buy-in and collaborate on ways to make the transitions (and ultimate transformation) easier.

Lack of expertise

Digital transformation is a huge initiative, and few people have all the skills or experience needed to implement those changes seamlessly. To prevent growing pains and rookie mistakes, seek out partners who have the knowledge and expertise you need to execute on your plans.

Also, keep in mind that digital transformation isn’t a one-person job. It should be a cross-functional endeavor involving multiple departments, so you should ensure that these teams are staffed accordingly and looped into the project.

Failure to apply data

Data is useless if you aren’t actually using it. As your organization taps into new digital resources (like better data collection and analysis), be sure to put processes in place to take full advantage of this resource.

Companies that leverage their data and act on it quickly pull ahead of the competition.

Developing a digital strategy isn’t easy—but it is crucial to laying a strong foundation to launch your digital transformation. And the companies that plan ahead today are setting themselves up for a bright future.