Five Steps to Start your Digital Transformation

Five Steps to Start your Digital Transformation

The first step to any project, especially for technology based projects, is to define clear business objectives. Any new technology can make innovation possible and open up new business models. For companies that are not in Tech, the business strategy should always come first. So technology supports a clear business goal.

In our previous article, we reviewed The Four Biggest Digital Transformation Challenges . Where we were warning you about the major challenges to the implementation of Digital transformation.

In this article, we are going to present you the five steps to define a clear business objective before launching a Digital Transformation project.

1. Select a Suitable Project Owner

A successful Digital Transformation project happens when it is managed by the right person: the project owner, who

1. is essential to the success of a transformation project,
2. knows the context,
3. has a good understanding of the items that have to be defined later,
4. has strong accountability towards the outcome of the project.

Having a motivated and qualified project manager is key for the success of your digital transformation project. He will be the person able to overcome your business challenges and ensuring that your project will be successfully implemented and delivered as you expected.

A project owner with the right mindset to drive transformation will drive the project to success.

2. Analyze the Pain or Issue

There is no point in investing in a digital solution if there is no pain or issue in the current way things work. Usually, the pain is there first and triggers the initial need. It is ill-advised to look at a solution when you don’t have the corresponding problem.

In all cases, it is essential to step back, define a business context and a project owner, and make the project owner accountable to analyze the current situation. In that analysis stage, it is not uncommon to redefine the problem. It is a good sign that happens. It means that the project owner gets a better understanding of the underlying reasons.

Reaching a clear and detailed enough picture of the current situation requires interviewing all the business context actors and asking them what they do and why they do it. The “why” question is fundamental. It is the keyword that allows for a deeper understanding.

The current situation is defined, not only by the data being manipulated, by all the elements contributing to the context: communication, errors, decisions, misunderstandings, tasks. The objective of this phase is to get as detailed and accurate a picture as possible.

The definition of the problem to solve must be detailed enough to move to the next step.

3. Visualize Successful Outcome

With a very detailed view of the issue, it is then easy to visualize a successful outcome. When stakeholders describe their pain, they automatically refer to a better way of doing things. They will start sentences by: “It would be great if we could just…” It is crucial to capture these elements during the interviews, but only to wrap them up after a clear understanding of the problem.

Without a complete view of the successful outcome, the transformation project is at risk of delivering too little and could create more damage than good. So the result must be at the level of the Business Context, within a strategic context.

The project owner must create a consensus, amounts the stakeholder that this outcome is both desirable and achievable. At this stage, it is not uncommon for stakeholders to want to jump ahead, think of a solution, or try to estimate the changes required. It is an expression of the anxiety generated by change. The project owner must carefully listen to these concerns and gear the discussion back to aligning on the successful outcome.

The successful outcome is a critical element of alignment amongst the stakeholders.

4. Quantify Results

It is probably the most challenging part of the launch of the digital transformation project. Once the outcome is clear, the stakeholder must put it into numbers. Making it measurable simplifies the allocation of a reasonable budget. The project outcome must be a quantity that will translate into a return that determines how much to spend on the project.

In this stage, the detailed elements gathered in the situation analysis are critical. All the numbers collected at the previous steps will estimate a reasonable and measurable target for the project.

There is strong resistance by stakeholders to give numbers. It is, again, due to the aversion to change and the uncertainty associated with it. The project owner has to guide the stakeholder into finding a balance of defining an attainable stretch goal.

Agreement on a measurable target result is the final step before moving to the budget.

5. Compute Budget

With the elements aggregated in the previous four steps, building a budget is as simple as deciding on the Return on Investment and divide the measurable outcome by the ROI. If the project’s planned benefits will accumulate in time, as is often the case, another variable is the period into to achieve the ROI. It varies from one company to the next and gives more flexibility. It is a crucial element for the final approval of the budget by the management.

The power of building a budget this way is that it significantly increases the chances of reaching the desired ROI. It gives a strong sense of the conditions into which the project is worth pursuing. It makes the decision straightforward in the next phase of the solution building because success is clearly stated.

Budget = Outcome / ROI

With these five elements clearly defining, now is the time to find the right solution . It requires a well-defined business context, a clear and measurable outcome, and a budget consistent with the desired result.

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