Getting and Staying on the Path of Digital Transformation

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  • 7/24/2018

    Digital transformation topics have been highlighted in our publications several times recently, and the work being done in this area only continues to increase and intensify. More clients are formally planning and consciously embracing digital transformation within their organizations. This transformation has been taking place for years, as the internet has now reached every industry. The adoption of this trend continues to be expedited by several converging factors: mobile, consumerization of digital, big data and disruptive and changing business models. This is causing organizations to put more focus on their digital transformation efforts.

    What Is Digital Transformation?

    Digital transformation is the act of evolving existing communications, promotion, systems and processes to be ready to deliver on the expectations of a modern, 21st-century organization.

    Charlee McDaniel, Ecommerce Marketing Manager at The J.M. Smucker Company, views digital transformation “as the change that occurs due to a strategic business need to evolve. Typically the need develops because the organization is at a tipping point, likely due to an opportunity for growth or a disruption in the marketplace, and their digital discipline is not able to support the change. In order for transformation to occur, the evolution must impact multiple digital components, brand and customer experience, technology infrastructure and platforms, data readiness and daily digital marketing practices that grow ROI. This is often a multi-year plan that requires investment and skilled personnel.”

    Digital transformation is an evolution most organizations have been slowly plodding through. Some know they are on this journey while others are falling into it, but digital transformation doesn’t have to be by accident or happenstance. The trends that are worth paying attention to, especially for middle-market organizations, are these growth-enabling transformations, which should be planned and coordinated undertakings.

    Doing Digital Versus Being Digital

    There is an enormous difference that we have seen between organizations that “do digital” versus ones that “are digital.” This transformative process isn’t just updating your website, turning on e-commerce or evolving your CRM. Those are one-off efforts that will help an organization but, if left as projects, don’t truly help to transform organizations to compete more effectively. The key to truly rising above your competition that we have witnessed is the planning and integration of efforts throughout a multiyear journey of transformation.

    Chris Beach, CEO at industrial and hardware distributor Bostwick-Braun, says he and his company “started this digital journey as just another update.” Their need to rebuild their online catalogs and websites evolved as they got into the work and saw other ways they could use these tools to service their clients and the end customer. He says that after this aha! moment, “he shifted his view of the work from a tactical idea to a strategic exercise.”

    For Bostwick-Braun, Beach says “omnichannel is just here. We can talk about it or deal with the fact that we are already living it, and thus our practices and our salesforce need to continue to evolve to meet the customer where and when they want to be served.” If you think like a modern customer, then you understand the business world has to be ready to meet his or her demands. As Beach says, “Consumers act on their timelines, not on ours anymore. So, we have to supply the digital tools to reach them whenever they want to interact with us.” Additionally, Beach says he’s also “eager to get the internal culture to turn the corner digitally, so they can articulate how additional investment and change will further help the customer and, in turn, improve retention and growth for Bostwick-Braun.”

    McDaniel has seen multiple companies within industries from banking to housewares to food take on digital transformation in different ways. She says, “The interpretation has not necessarily been different, but the organization’s approach often is. Companies differ on financial commitment level, speed to market/pace and cultural change needed. Some organizations are ready strategically and financially yet have a difficult time understanding the time needed to put quality solutions in place that will truly be sustainable and grow with them, while others are willing to take the time needed to establish a solid infrastructure yet are less committed financially and struggle strategically. Finding the right balance for the organization is key to creating a successful digital transformation plan.”

    You have to understand that digital transformation takes time because you’re changing sometimes decades-old practices or processes and people that are used to operating under those methods.

    :: Bruce Cook, CFO of Harden Furniture

    Transformation Participation

    When we get into transforming clients, we get a pattern of questions… Who leads this? Who owns digital transformation? Is it cross-functional?

    Bruce Cook, CFO at Harden Furniture headquartered outside of Syracuse, New York, says that “digital transformation can be most effective when it is an important agenda item of the CEO and has their backing as a company-wide approach. I’d also strongly suggest that, for certain cultures, it has to take an outsider to come in and shake things up differently than the ways that business has traditionally been conducted.”

    He adds, “You have to understand that digital transformation takes time because you’re changing sometimes decades-old practices or processes and people that are used to operating under those methods.”

    Beach echoes his sentiments and says “it is important for the CEO to get out of the weeds to get a higher-level view even outside your industry” in order to see what the customer will really use and value, not just what the competition is doing. He also realized he didn’t have the skills in house and needed to look outside because these were all not tactical areas they had exposure and best practices in. It was a shift because the culture has traditionally had a lot of pride in doing everything internally. He tells us that business leaders should not “live in denial about this. Have the courage to look outside; it is not as expensive or scary as you think.”

    Through many planning and needs analysis exercises, thunder::tech has found that before we can propose the best solution and roadmap for our clients, we need to know the processes in place today, where bottlenecks exist, where the company interacts with customers and employees and how digital could enhance, supplant or retrieve insight from these interactions. Each of these items can have one or more internal departments that will need to embrace a change in how they execute.

    Transformation takes participation from all departments. Today’s customers and workforce want action, answers and service now. These expectations are finally forcing organizations to break down the walls between traditionally siloed departments for the good of the end goal.

    Culture Considerations

    McDaniel noted, “The culture of an organization must be considered— what can be changed culturally and what cannot? Developing a digital transformation plan must fit the overall strategic vision of the organization and consider what is culturally possible. You cannot take a plan for one organization and simply implement the same plan at another. Also, gaining executive sponsorship at the top level of the organization is a must. Commitment and support from executive leadership is essential to success, and it is critical for the various teams working through this journey to keep them regularly engaged.”

    She has advice for executives who are just getting started:

    • Don’t try to implement everything at once. Look holistically at the vision and start with a good foundation. This also allows you to use real-time analytics to inform future decisions and what’s worth big investments down the road.
    • Be sure to measure ROI and don’t be afraid to talk about what did not perform well. Learning from underperforming activity is part of getting things “right" in digital. It’s essential to test and learn to become successful and reach the ROI you desire.
    • Keep evolving. The activity and investment doesn’t stop once something new is in place. You will see the greatest ROI with increased activity post launch. Stopping activity after the launch of a new website or app makes the investment in that entity an expense. You must apply the digital marketing support post-launch to see the ROI and keep ahead.
    • Share analytics and key insights with the organization across product management, engineering, customer service, sales, etc., as these teams can all benefit greatly from the direct exposure digital gives us to our customers, the industry and trends.
    The Pace of Transformation

    Organizations typically iterate how they operate over time. Paper forms become digital, advertising budgets slowly move to the web and customer data centralizes. The pace at which you “become digital” versus “do digital” depends on your culture, your customer demands and your competitive set. The need to bridge this gap and truly start to digitally transform comes down to one word: change. Can you change fast enough to stay competitive with those who are evolving to keep and gain market share, keep new competition at bay, cut costs, find efficiencies and, most importantly, meet customer expectations?

    So, whatever your organization calls it, digital transformation, digital Darwinism, digital determinism, disruption, convergence, DX, etc., know that it’s happening to every organization. There is no right way to transform other than to strategize on the outcomes desired and then create your plans accordingly. When organizations focus less on the technology and more on what it enables, you will drop the ad hoc approach of doing and start being more digitally driven and ready to adapt and succeed.

    Getting and Staying on the Path of Digital Transformation is an article featured in our 2018 Trends Summer Reader publication. Download your free copy here.
    If you are interested in learning more, listen to our corresponding thunder::cast episode.
  • Episode 82 - Trends Summer Reader 2018: How to Transform Your Brand
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