By Pete Peralta
As Chief Digital Officer at BRINK, Pete’s passion and expertise lies at the intersection of innovation, marketing, and technology. He’s helped companies define their digital transformation journeys while working for Hero Digital, Accenture Digital, Publicis.Sapient, and The Irvine Company.
Imagine you walk into a glitzy room full of Las Vegas slot machines. Everything is shiny and glamorous. You could easily walk out of the room with less money than you started with. And despite the very low success rate, everyone in the room is taking part.
Too often, embarking on digital transformation initiatives can feel the same way—at least when it comes to the allure of technology, the expensive investment, and the sobering fact that up to 95% of digital transformation projects fail to meet their original objectives.
Like the Las Vegas strip itself, digital transformation is nothing new. So why do today’s organizations continue to struggle, and how can digital transformation initiatives hit the jackpot instead of falling flat?
1. Develop a strategy for the long term
We live in a world of instant gratification. More and more, consumers expect to receive the content and goods they need exactly when they want them. But while efficient and personalized service is the name of the game when it comes to CX, you won’t see substantial “quick wins” with internal digital transformation — and that’s OK.
When many people hear the word transformation, they picture a caterpillar turning into a butterfly: Once the butterfly emerges from the cocoon, the transformation is complete. But for digital transformation, there is never an endpoint. Instead, it’s an ongoing evolution that aims to meet your customers where they are.
That’s why we find that lasting digital success is a result of old-fashioned planning and setting realistic expectations at the onset in order to guide what actions you take, and when. In other words: strategy. As research findings from McKinsey & Company state, “there are no shortcuts to success. The main differentiator between success and failure was not whether an organization followed a specific subset of actions but rather how many actions it took throughout an organizational transformation’s life cycle.”
For example, it may be tempting to jump on the bandwagon of advanced marketing technologies like CDP and AI without a second thought. But you need to have your fundamental platform and basic data analytics in place first, as well as the tools to support new investments that you plan to layer on top of your existing ecosystem.
Successful execution relies on finding partners who are not only experts in their areas, but who also understand your holistic vision. A good plan will make sure you’re not investing in tech that outpaces the velocity of the org in accepting new tools and programs.
Embracing the long journey of digital transformation does not mean you need to reinvent your company from top to bottom. But whether your goal is to transform your business model or simply to become more efficient, more cost-effective, and more competitive, forward momentum requires strategic big-picture thinking about your organization’s long-term goals and how those goals can be accomplished with digital.
2. Start with your customers
Many companies have a clear conviction that they need to go digital in some form. But whenever possible, it’s not smart to invest money into digital transformation based on gut instinct alone. It’s important to do your homework so that you have a firm grasp of:
- Who your customers are, including their needs, challenges, and what drives them to engage with your brand: What digital initiatives could help address your customers’ needs and challenges?
- What your existing customer journeys look like from start to finish: Are there pain points along the journey that could be solved through digital initiatives?
- How you currently engage, support, and interact with customers along those journeys: Are there inefficient or ineffective internal processes that affect the customer experience and that could be improved with digital initiatives?
Let data guide your path whenever possible. Many companies collect a non-stop stream of data, but never actually analyze it. Put the data you already have to good use, and supplement it with qualitative exploration, such as customer surveys and interviews. Ultimately, everything you do should be approached through the lens of the customer, what they need, and how you can make a simultaneous positive impact on customer experience and business growth.
Ultimately, successful digital transformation does not hinge on technology alone. The bulk of successful digital transformation is built on a bedrock of people and processes — both internal and external.
3. Secure C-suite support
Internally, transformational efforts never fully succeed without top-down C-suite support. Many companies claim they are doing digital transformation, but they have one foot in the digital door and the other foot out. If digital is critical to your business, then everyone from the Board of Directors and CEO down needs to believe in it and support it.
This isn’t all about budget, but financials do play a part: For instance, if you’re planning to invest less than 1% of your company’s revenue into digital transformation, that’s not transformation—that’s a project. For context, Gartner reports that in 2022, marketing budgets represented approximately 9.5% of company revenue.
Typically, companies that go all-in on digital see higher market share and returns. For inspiration, look at these 7 examples from Forbes. To see significant success, your level of investment will require securing digital champions within your organization’s uppermost echelons.
4. Equip your internal operation for success
Even if you have superstars on your payroll who have successfully handled big initiatives in the past, you need to equip your entire operation for success from the top down. In other words, effective change management.
Digital marketing differs from traditional marketing, and digital transformation spans entire departments and reaches every single employee. That’s why digital transformation initiatives require buy-in beyond the C-suite.
Some companies already have a high digital component, while others are digital laggards. For instance, many financial institutions, manufacturing businesses, and utility companies are built on the backs of hardworking people for whom digital territory is still largely foreign.
You may have aligned on what digital means for your company, why you need it, and how it will benefit your customers. But now you need to secure the people and processes necessary to carry it out. A report by PwC found that 44% of employees didn’t understand the change they were being asked to make — and 38% didn’t agree with the change agenda in the first place.
Lack of internal clarity and employee discomfort can quickly manifest itself into something that’s negative for the organization instead of positive. This is where leadership must take on the role of navigating digital change within the organization. In fact, the best organizations build a positive philosophy around failure. Like a savvy card shark, you need to walk a fine line between playing it safe and taking risks. Organizations that always play it safe are those that fail to progress.
5. Identify the right partners
Hitting your stride internally may mean that you find yourself needing to re-tool internal skill sets, retrain employees, or shift them to new roles. It’s also inevitable that you will need to hire outside experts to further hammer out a detailed roadmap and own specific pieces of the execution that are outside the scope of what your existing team can support.
Success factors in choosing the right partner include:
- Proven ability to define and execute transformational initiatives (i.e. make sure you vet partner credentials by talking to existing or past clients)
- Focus on problem solving versus tactical design and build
- Established relationships and consistent communication with partner leadership
- Agile execution (in many situations, smaller boutique agencies can execute as well or better than larger agency conglomerates)
- A dedicated A-team of professionals — which can vary based on your level of investment and the type of agency you choose
- Consolidated work streams where you can ideally communicate and hold accountable a single partner instead of several
Successful digital transformation cuts across every business line and every division. Cultivating the right external partnerships will help support success across multiple business pillars and prevent your digital initiatives from fizzling out.
6. Create a roadmap and KPIs
We mentioned that true digital transformation is a long road. That’s why it’s so important to activate your plan in the form of a defined roadmap that includes clear benchmarks and KPIs that allow you to track incremental progress and maintain confidence in the overall program vision and investment.
Many companies treat digital transformation as a one-off project and expect to see immediate value, but it can take years to see truly significant ROI. This can be discouraging, which is where setting a series of milestones comes into play — so you can track wins and pivot points along the way.
The right approach is to map out your journey over the next five years, identify the ultimate value you hope to gain, and then find incremental ways to measure progress that keep that end goal in mind. Because these journeys are so long, leadership figures come in and out and business priorities change. It’s easy to lose sight of why you started the journey in the first place which is exactly why so many digital transformation initiatives stall out or fail.
You don’t want to get caught up and find that you’re just throwing money on top of things that aren’t working. If you realize you’re not reaching your planned metric for a given phase, that’s an important reflection point to determine if you need to readjust before moving forward.
7. Invest in the right technology at the right time
Technology certainly plays a starring role in bringing a digital transformation vision to life — it’s simply not the be all, end all. For example, there are many tools involved in the process of constructing a house, wielded by various tradespeople. But the end result is not about the hammer you use, it’s the house you build.
When approaching technology decisions, think about the technology that will support your future company vision, not its existing state. The great thing about popular technology platforms is that there are robust capabilities for accomplishing different levels of transformation. What you want to keep in mind are two main pitfalls:
1. Don’t overspend on technology
2. Don’t forget about the next technology puzzle piece
First off, many companies over-architect and therefore overspend. According to Harvard Business Review, this results in billions of wasted dollars per year. Companies buy the Ferrari of tech platforms, but all they do is drive it around the block — or worse, leave it parked in the garage. When you don’t invest in the internal people, processes, and strategy needed to support the technology you buy, the technology won’t reach its full potential.
As for the second point, it can be helpful to think about your technology investment as a series of puzzle pieces. For instance, if you are planning to execute a performance marketing program, a successful program will ultimately require AB testing, multivariant testing, and a high level of personalization. One route would be to invest in a DXP and technology suite that has all the puzzle pieces you need and can support your full vision on day one.
On the other hand, if you’re going to piecemeal your plan together one digital puzzle piece at a time, you need to ensure you are buying into an overall technology philosophy that provides a path to do so. Put simply, you don’t want to get halfway to your goal and find yourself trying to shove a square peg into a round hole.
Ultimately, there are many resources you can tap into for help at each stage of your digital transformation journey to support everything from strategy to technology selection, including full-service boutique agencies like BRINK. Whether you need to dial in the marketing component, the business case, the technology solution, or all of the above, it can help to work with an integrated agency whose expertise spans multiple areas. When you have a trusted guide at your side, the digital journey is far less daunting.
Need help strategizing and executing your digital transformation vision?
We’d love to chat.