What Are the Elements of Digital Transformation?

If the elements of digital transformation weren’t a priority for organizations before COVID-19, they’re at the top of the agenda now. According to Statistica, post-COVID digital transformation spending has skyrocketed in 2020 with an expected 10.4% increase by the end of the year. As the pandemic continues, businesses are facing remote team challenges and pressure to increase operational efficiency. Therefore, the trend toward digital transformation is likely to continue. 

That being said, the successful implementation of a digital transformation strategy is neither straightforward nor easy. A recent BCG research study showed that “70% of digital transformations fall short of their objectives, often with profound consequences.”

So, how do you transform your tech infrastructure without falling short of your objectives? For the highest chances of success, you need to focus on the following core elements of digital transformation:

1. Define Your Digital Transformation Goals
2. Build an Integrated Strategy
3. Secure Executive and Middle-Management Approval
4. Create an Agile and Flexible System
5. Hire and Train for the Right Skills 

1. Define Your Digital Transformation Goals

A common source of digital transformation failure is a lack of well-defined goals. Many organizations simply choose a handful of technologies because they are popular, trendy, or satisfy an isolated benefit – not because they can achieve the clearly-defined goals of a cohesive digital transformation strategy. This can lead to the implementation of technologies that (1) don’t get used by team members, (2) don’t integrate with the rest of the IT infrastructure, (3) don’t support larger business objectives, (4) result in more inefficiencies and costs than benefits, or (5) fail to balance the competing needs of different departments like marketing and IT. 

In this respect, it’s important to research and plan your transformation goals – and the tasks, technologies, and processes that achieve them. Whether you want to redefine your business model, boost the efficiency of operations, or build a remote-working-friendly infrastructure, answering the following questions is an excellent launching point to define your digital transformation goals:

• For what purpose? Identify the reasons for investing in digital transformation. Brainstorm all of the benefits of digital transformation for your organization. Include unique challenges for your organization that a new, integrated tech strategy will resolve. 
• What are the priorities? Define the “deal-breaker” priorities. These could relate to support for remote working, reduction of IT spending, achieving a more scalable app infrastructure, building a more agile/flexible business, boosting sales, increasing supply chain efficiency, or obtaining better business intelligence. 
• What are you going to do? Make a list of specific digital transformation tasks that support your goals and priorities. These could relate to breaking down and replacing legacy IT systems, evaluating new types of digital solutions, transferring specific systems to the cloud, hiring and training staff, and developing new applications to solve specific challenges.
• What’s the implementation strategy? Work with your team to map out the steps required to implement your digital transformation tasks. Answer questions about leadership, governance, and resourcing. Determine whether to use pilots, incubators, or lighthouses – and answer questions about sequencing. Develop strategies to ensure that all new and existing technologies integrate with each other and work together in unison. 
• What are the benchmarks of success? Establish measurable benchmarks of success and/or specific business outcomes that allow you to see if you have achieved your digital transformation goals. These benchmarks could relate to the level of adoption across the organization, whether you have achieved leadership buy-in across the organization (particularly from the CIO and CMO), and the amount of IT savings you have achieved. Other benchmarks of success could relate to statistics on sales, sales funnels, team member productivity, and supply chain metrics. 

2. Build an Integrated Strategy

Your company’s operational systems rely on a network of business systems, apps, and IT infrastructure components. The more seamlessly these apps and systems integrate with each other the better. In fact, integrating data and processes across multiple systems, organizational towers, and departments – while breaking through information silos – is the reason why most enterprises seek digital transformation in the first place. 

The same concept applies to customer-facing systems. Your clients probably interact with a number of services when interacting with your SaaS products or web applications. These services could include web applications that display product information, chat portals for asking questions, payment portals, and other SaaS products. Although each of these services is a separate system of its own, all of them need to integrate with each other to provide a seamless experience. 

The more you automate and integrate each aspect of your operational infrastructure and customer-facing systems, the more you will satisfy customer expectations and improve staff efficiency. If your digital transformation plan fails to achieve this kind of integration, it could result in dramatically fewer sales, higher IT costs, lower levels of productivity, less accurate business intelligence.

3. Secure CMO, CIO, and Key Leadership Consensus

Large enterprises are dealing with increasing tech overlap across different departments -- especially across their IT and marketing towers. Due to this overlap, it’s essential that organizational leadership -- especially CMOs and CIOs -- collaborate to reach consensus on any digital transformation strategies and technology. If not, their respective departments could choose to adopt mutually-exclusive solutions. Worse, you could find instances of “shadow IT” where one department uses a particular technology in secret, resulting in silos and blind spots within the organization. 

A recent article from CIO.com stresses the importance of CIO-CMO collaboration: “It’s becoming clear that to effectively utilize and operate next-generation marketing and customer experience systems, the CMO and CIO must build a partnership to ensure the success of these tools.” The article goes on to quote Cynthia Stoddard, CIO and SVP at Adobe, who says: “As these systems become more complex and contain more data, the CMO and marketing team will benefit from working with the CIO and IT team to ensure that IT is optimizing both the operational and security aspects of marketing’s digital systems.”

Without key leadership consensus on your digital transformation objectives, the goal of building an integrated and transparent IT strategy will likely end in failure. The result will be a dis-integrated strategy where vital data is not available for business intelligence, and where IT over-spending is the norm. Conversely, when CMOs, CIOs, and other leadership sign off the plan, you increase the chances of digital transformation success. 

Some Fortune 500 companies are actually “forcing” digital consensus within their organizations by merging their IT and marketing towers into one. This pushes IT and marketing departments into a position where they must work together as an integrated unit. It’s a radical solution to a common problem, but many see it as the only way forward.  

4. Create an Agile and Flexible Infrastructure 

Maintaining agility and flexibility is another element of successful digital transformation. One of the most popular ways to increase agility and flexibility is to transform legacy, on-premises systems into cloud-based microservices-based systems. By refactoring on-premises monolithic applications into networks of microservices that run in the cloud, organizations achieve greater agility, scalability, and location-independence. The microservices-based model makes adding, removing, updating, and scaling different services and features infinitely easier, faster, and more affordable. 

Developers use a number of technologies to create agile and flexible microservices-based systems. One of these technologies is our product, DreamFactory -- an iPaaS, API manager, and API lifecycle management tool that dramatically speeds up the process of safely integrating new services, features, and databases into new and existing systems.  

Whether you achieve flexibility with a microservices-based infrastructure or not, it’s important to keep your eyes on all market, business, and tech developments before, during, and after your digital transformation process. This allows you to respond to new conditions as early as possible. You should also pay attention to the threat of “vendor lock-in.” Never forget that some of the most exciting tech solutions on the market offer convenience and ease of use, but they destroy your agility and flexibility because they lock you into their products. If you must submit to vendor lock-in, make sure that you’re marrying yourself to a product that will continue to innovate and stay competitive in the years ahead. 

5. Hire and Train for the Right Skills 

Sourcing IT talent with the right skills is a keystone element of digital transformation. Your IT staff needs to understand a range of cutting-edge technologies, what’s best for different use-cases, and where the tech landscape is headed. This ensures that you integrate the most appropriate solutions that will stay relevant in the years ahead. Hiring staff with the following experience will help this aspect of your digital transformation plans: 

• Data engineering
• Data science
• General app development
• Web app development
• Microservices-based development
• API-first development
• Cloud services
• Cloud migration
• App integration
• Data integration
• Remote team management

As for existing employees, they need the training to use new solutions effectively. You will also need to develop operational processes that ensure employees are integrating the new solutions into their daily work.

Make DreamFactory a Part of Your Digital Transformation Dream Kit

Now that you’ve finished this guide, you should have a clear understanding of the key elements of digital transformation success. By focusing on these areas during the planning, implementation, and maintenance phases of your digital transformation agenda, your team will stay agile enough to respond to any digital-era challenges.

Finally, we hope you’ll consider DreamFactory as an essential tool in your digital transformation dream kit. DreamFactory is an API-manager and iPaaS solution that makes it easy to integrate new services and features -- such as SSO authentication, role-based access control, new databases, cloud-based services, and more -- into your new and existing app and IT architectures. With DreamFactory, building the API plumbing and managing API calls between different elements of your projects is easier and faster than ever. Best of all, DreamFactory’s automatic API generation feature means that you can bypass the time-consuming task of hand-coding APIs. 

Want to see how you can use DreamFactory to generate custom, fully-documented REST APIs, and integrate new technologies into your systems in minutes? Click here to sign up for a free hosted trial of the DreamFactory platform now!