Digital transformation is the process of integrating digital technology into existing business processes. Forbes reports that these efforts picked up considerably in the 1990s due to the advent of the Web, and continue today, impacting both how businesses operate and in turn, public perceptions of businesses. As more companies mature in the digital sphere, consumer baseline expectations update against the business operations of digital giants, FAANG, i.e., Facebook, Amazon, Apple, Netflix, and Google. With products available quicker – from information to product shipments, consumer expectations have increased and extended towards other company services as well. Consulting giant McKinsey identified four overall expectation trends – 1) immediate (now), 2) valuable (can I), 3) relevant (for me), and 4) easy (simply).
In order to fulfill these expectations, companies must invest in technology that not only are fast, but also give customers what they want – and in order to give the customers what they want, companies must understand them. The need to understand customers have given rise to concepts and business models that focus on customer needs, e.g., customer experience, user experience, customer-centricity, etc. The reason behind the dominating popularity of these ideas are simple – companies that deeply understand their customers and their needs, are going to be the ones who come out on top – in other words – they will be at the front of their customers’ minds, selected by customers, and recommended by customers. It is from these customer expectations and concept movements that companies now must update their own processes to stay competitive, else a faster competitor will capture the now loose market.
However, even with this pressing need, companies must be wise in how they carry out digitalization efforts, lest they waste precious time and resources and fail. Reasons for failure ranges from selecting the wrong areas for digitalization, in-house resistance, and technological implementation gone wrong. Complete digital transformation of a company is a large, complicated effort where the losses could even outweigh the benefits if done incorrectly. It is for this reason that companies without unlimited budget can test-drive small projects for quick wins before expanding out their digital transformation efforts.
Inevitably, all conversations about company strategies eventually lead to the following three critical areas: time, money, and manpower. These three areas are the most limited – and valuable – resources that companies own. For every new project that’s started, the total cost extends beyond developing or even purchasing the product itself, but the time spent by internal staff on adjusting to this new venture effort. For this reason, no matter how enlightening a new project may seem, a company is sure to encounter push back from all teams affected by the new project – whether that’s IT managers who need to allocate their members to the project to managers needing to implement a new KPI into their company reports. As all managers know – the company’s most valuable resources – its time, its money, and its man hours – must be invested carefully into projects. So what factors are involved in selecting projects that are most likely to succeed? What kind of projects will use the least amount of resources and are projected out to not just something that a company needs to implement to survive – but an actual cost-saver…or even a revenue generator?