5 signs that your digital transformation strategy is working well

When CIOs decide to implement digital transformation in their business, the pieces of advice roll in like marbles. Left and right, there are options to try, tips on what to do and what not to do, or guidelines to follow. 

But the fact remains that not all feet can fit into the same shoe. 

So, how can you tell if the strategy you have chosen will result in a winning plan of action for you? How can you be certain that you're even taking the proper actions to begin with?

That's why we've listed the top 5 indicators in this post to help you determine whether your strategy for digital transformation is effective or not.

Why should you care about effective or ineffective digital transformation strategy?

While effective digital transformation strategies create better customer experience, encourage digital culture (with improved collaboration), increase profits and productivity, and so on, an ineffective strategy almost might have reverse effects. 

Wouldn't that mean you should drop the whole idea? No!

Even though the failure rate for digital transformation is 84% (according to Forbes), the same publication states that it is far more crucial to adopt digital transformation than not, with six reasons to back that claim up.

For instance, only a digital transformation strategy can help you keep up with customer expectations, which keeps you in the competition. Also, your team can work more efficiently, and you'll be saving costs when you transform into a more profitable digital process.

So, if you don't want to be one of those 84%, the best route is to look before you leap. 

Why shouldn't you follow every single advice you can find to start your digital transformation process? 

Even though you have already found the tools you’d like to work with, people will still come to you with different ideas and new strategies they vouch for. 

Don’t take the bait!

Following every piece of advice without critical evaluation can lead to several potential pitfalls and challenges. Your business is not the same as another’s; even if you are in the same field, you’ll have different contexts and situations. 

Remember that generic or overly prescriptive advice may not account for your organization's unique industry, culture, and circumstances and can lead to disaster. 

What you should do instead is follow your guidelines, try out the digital transformation strategy you define as the most relevant to your objectives and KPIs, and measure for success. But don’t forget to run it past your employees and team members. That is what most executives often forget about. 

Therefore, what questions should you ask yourself to set up your digital transformation guidelines?

There are many ways to set up a digital transformation strategy in a company, and that’s because every organization has its unique needs and characteristics. These specificities dictate the digital tools, technologies, and strategies that are most suitable for achieving business objectives. 

For instance, a manufacturing company may focus on implementing IoT solutions for process optimization, while a retail company might prioritize e-commerce platforms and data analytics for customer engagement.

Also, the company size and organizational culture play an important role in the diversities of the options available to you. 

So how can you tell which is for you? Here are ten questions you need to answer before choosing a strategy for digital transformation.

1. What does digital transformation mean to you or your business?
2. Why do you need a digital transformation right now?
3. Are you seeking an upgrade or a complete transformation?
4. How data-driven is your business?
5. What do you hope to gain from the transformation? 
6. Do you have an outcome-based transformation goal?
7. What are your KPIs in measuring the success or value created?
8. What are your competitors doing?
9. What have your employees expressed about this topic?
10. Do you have the resources and time to implement a digital transformation strategy?

If you have successfully answered these questions, you can then choose the strategy you want and look out for success signs. Speaking of signs, it’s time to explore the five signs that will tell you if you’re on the right path. 

5 signs that your strategy is going the right way

More signs can tell you if you’re going in the right direction, but these five are the most common, vivid, and relevant ones. Take note that these won’t necessarily tell you what strategies to implement, nor will they tell you what to look out for when choosing a strategy for digital transformation (we’ll look into both soon enough). But for now, let’s see the five indicators that point you in the right direction.

Digital initiative alignment with business goals

Before you implement your digital transformation strategy, ask yourself if it aligns with your business goals. Yugal Joshi, the vice president of digital, cloud, and application services research for Everest Group, said, “Organizations need to define their criteria of what success looks like.” That's because what you consider to be a success may not be a success for another CIO. 

Let’s take this case study, for instance. 

Marc Pommepuy, the Innovation project manager and driver of digital transformation at SNCF Réseau, had goals he wanted to meet. He wanted to venture into a world where his remote workers could work the same way they usually did when they met in person. 

That was the goal — his indicator for success. 

If you read through the full case study, you’ll realize that Marc opted for a digital collaborative tool that could meet his goals with certain KPIs he already set in stone:

• A centralized space where he can invite everyone to participate and learn;
• A videoconferencing tool that perfectly replaces face-to-face meetings;
• Powerful features that allow him to get feedback and generate reports very quickly.

After he used the digital collaborative tool, he measured the results, and it was impressive. Marc met all his goals, and on top of that, he was able to increase the number of adopters inside the SNCF Réseau teams by a factor of 5. 

Now, you could say he got lucky or that the tool was miraculous. 

But don’t forget that he already checked if the proposed strategy for digital transformation aligned with his goals and KPIs.

Improved visibility into enterprise operations

This refers to the ability of an organization to gain clearer and more comprehensive insights into its various business processes, activities, and data. In other words, when you implement digital transformation, you should be able to better leverage technology and data to gain a deeper understanding of how your organization functions. 

It shouldn’t clog your understanding of how your business works but enable better decision-making, increase efficiency, and improve the ability to adapt.

Some other pointers that can help you recognize improved visibility into enterprise operations include:

1. Ability to access real-time data. 
2. Seamless data integration from different sources and systems across the organization.
3. Ability to forecast trends, anticipate future challenges and make proactive decisions.
4. Encouragement of cross-functional collaboration from different teams within the organization.
5. Reduction of manual efforts with data collection and reporting processes, and so on. 

In general, you are on the correct track if you can see more clearly your company's activities and the next steps become much more obvious. 

Increase in lean business processes

Originally developed by Toyota, a lean business process is the method of decreasing the amount of time and resources spent on business production. The central idea is to reduce time spent, resources used, costs, and waste. But at the same time, it increases efficiency, output and profits. 

Lean business processes are essential for businesses that wish to remain competitive in the market, and a good digital transformation strategy is supposed to get you there. 

While implementing your strategy for digital transformation, observe the processes that are part of the transformation and ask yourself these three questions: 

1. Are you meeting your goals by consuming as little resources as possible?
2. How much time did you use to spend in production versus now?
3. What’s the differential margin between input costs and profits? Did the margin used to be bigger or smaller? 

Your answers to these three questions will help you understand if, indeed, the strategy you have chosen is heading you in the right direction or not. 

Increased go-to-market speed

Another method of validating your digital transformation strategy is to check if you are faster at hitting the market than you were before adoption. While this might seem obvious, it is a sign that is often overlooked. You might be meeting your goals, your customers and employees might approve of the changes, and you might even be making better decisions or using fewer resources.

But how quickly do your products leave the development stage and enter the market? How quickly do your services get to the end user? 

Digital transformation encompasses both internal and external processes in an organization. But the truth is that this is not a very easy factor to notice (hence, why it is being overlooked). That’s why you need a transformation map to help you visualize in a chart all you need to do to meet the goal within the set time frame. 

Using a transformation map, you can ensure you are hitting your go-to-market deadlines and having the desired impact. 

User and employee engagement and satisfaction

The number one mistake you’d be making regarding digital transformation is that everything is about the top executive stakeholders. The truth is, your employees are the heartbeat of your organization; that heartbeat is what’s going to tell you whether or not you are on the right track.

Therefore, observe your users (customers) and employees. Check their level of engagement and enthusiasm. If you operate a remote or hybrid work setting, you can still manage your team using digital collaborative tools that bring you and your team together.

Take note that this is not necessarily about letting your employees take extra charge. 

It's about valuing their input and considering their opinions regarding the new tools, methods, and procedures you have implemented in light of the digital transformation. It's also about understanding the role your employees and customers play in an organization's success. 

That said, if you notice customer growth, increased employee engagement, and improved satisfaction scores from both your employees and customers, then you are on the right track.