In order to carry out digital transformation without jeopardising other areas of a business, a clear digital strategy is required. The ultimate purpose of a digital strategy lies in ‘shaping the future’ of a business by utilising technological advancements with the help of upskilling individuals (McKeown 2020). Of course, a digital strategy cannot be put in place without intricate knowledge of a business’s current systems and status, as these will serve as the foundation for future developments. An effective digital strategy will take current business infrastructure into account while also setting clear and achievable goals. The development of a future-focused strategy will work in tandem with a company’s business strategy, which is key to attaining complete digital transformation.
Initially, an analysis of a business’s current suitability for digital transformation should be carried out. Initially, a digital maturity assessment provides a solid starting point to determine current digital capabilities. To this end, there are a number of additional tools which help businesses to plot their transformational journey. A SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis will serve as a valuable tool in identifying internal strengths and challenges while evaluating marketplace conditions that may have a positive or negative influence on business operations. A Value Chain Analysis may also be employed for this purpose. Business process mapping can also be used to evaluate and visualise current systems. All three methods will help to identify areas that will benefit most from digitization and digitalization. These areas, following the path of least resistance, should be marked as priorities in a company’s digital strategy. The analyses will also help pinpoint business areas that may prove challenging to update technologically. In many cases, these challenges can exist in some capacity across all areas of a business. This is problematic, as operating in a digital economy cannot be effectively executed with a business strategy created for “the analog economy” (McManus, Ryan, 2022). Therefore, it is often necessary to change certain core elements of a company’s business strategy in order to comply with the new digital strategy.
It can be useful to treat the restructuring of a business model for the purpose of digital transformation as a “reimagining” or “reinvention”, rather than working from the ground up and building an entirely new system. Key elements of a company’s business model, which include but are not limited to its resources, processes, value propositions, and revenue formula, can be renewed through digital transformation as long as steps are taken in accordance with the company’s digital strategy. Changes like these may be seen as risky and unsafe, especially when the systems in question have worked in the past, but they are ultimately essential to a business’s continued and future survival, as they will help facilitate the adaptation of a unique business strategy that competitors will likely be unable to imitate.
People are the most important part of any business, and an effective digital strategy will take this into account. This means that it should outline dealings with all stakeholders of a business, from customers to employees and leadership. Workplace culture is especially important here – in order for digital transformation to succeed, it is imperative that the general feeling of employees is one that is amenable to change. This can be hard to gauge but can be ascertained through the examination of a business’ cultural artifacts, such as work uniforms and office displays/layouts, as well as the organization’s espoused values (Schein, 2017). If the desire for digital transformation is not present, leadership may need to push the workplace culture in a more positive direction by employing a rational and self-explanatory decision-making process in their digital strategy. Training and upskilling are essential parts of any successful transformation project as an educated workforce will have the tools to understand why a digital transformation effort is essential for survival and equip employees with the skills they need to operate in a digitally transformed business.
Digital strategy and business strategy are, in essence, two sides of the same coin – both exist to ensure a business achieves its full potential. By aligning the two to complement each other, a business paves the way forward for digital transformation and thereby maximises its chance of prospering in an increasingly technology-oriented world.
Sources:
- McKeown, M., 2020. The Strategy Book. 3rd ed. Harlow: Pearson.
- McManus, Ryan, 2022. https://ryan-mcmanus.com/. [Online] Available at: https://ryan-mcmanus.com/
- Schein, E. H., 2017. Organisational culture and leadership. 5th ed. New Jersey: Hoboken.
