How to lead a digital transformation: 10 key steps

Digital transformation success requires cross-organizational alignment, actionable goals and top-notch project management. Here's how leaders can create that.

A digital transformation might be critical to gaining a competitive edge, but that doesn't mean that leading one is easy.

Reimagining the way the business can operate, and implementing digital technology to gain insight, capture new markets or operate more efficiently is no easy task. Business and IT leaders -- and the cross-functional project team -- must understand which steps they must execute to create success.

Here are 10 steps that every digital transformation leader should know.

1. Set your sights on true transformation

Be sure to define and preserve the transformational opportunity. A root cause of a digital transformation failure is "un-creep" -- the tendency to back away from transformation targets to minimize effort and risk.

Setting goals that are too small reduces the potential benefits more than it reduces the risks. Failing to capitalize on the transformation opportunity threatens the very justification of the project. Even if the project is successful, the total project benefit may then not meet company goals for ROI.

2. Connect with senior leadership

Digital transformation leaders can start the project by reviewing with senior line management what opportunities for transformation exist in line operations and business departments. Together, these leaders can work together to identify the nature and breadth of the optimum project. They can also uncover what would make the business more productive. Other issues to discuss might be how the company can be more responsive to threats and opportunities, and what specific business processes the changes might affect.

If line management or IT management believes that the optimum set of productivity improvements would be too costly or disruptive to achieve in a single project, then they can scale those back.

10 benefits of a digital transformation

3. Define actionable goals

Specificity is key to success. The targeted productivity improvements should define the actionable goals, priorities to assign and the most important departments to engage with. The project's technical activities will target each of these areas, and addressing all these activities determines project success. Department leaders will decide whether technical activities meet goals, so leaders should engage with these people throughout the project.

4. Define IT's goals

Be sure to establish a technology model that validates the business case. Digital transformation is a sweeping set of changes that redefines many of a company's business processes and the relationship between those business processes and IT.

Line managers must define the targeted processes so that IT can understand what technology changes will uphold those processes. Because digital transformation is literally transforming business processes, it's important to define IT goals by referencing the business processes you're targeting. Line managers and IT planners can cooperate to identify the target processes and the way technology changes will improve them. These changes then establish the technology model for the project.

The technology model is the set of requirements for the IT portion of the project and the goals that IT will have to meet to support the digital transformation. This phase also defines the areas of IT where business process management changes will be required for line operations.

5. Schedule inclusive stakeholder check-ins

Digital transformation leaders should frame the project plan to integrate line personnel into every phase, particularly specifications and testing. The project's specifications should be as granular as possible, with defined actions and clear boundaries. This step lets line departments see clear progress and offers a way of making regular progress meetings relevant to and inclusive of all the stakeholders.

Each step in the project plan should identify the transformation benefits through the already defined technology requirements and specifications. Tracking alignment with the project's requirements is the only way to ensure the transformation supports its business case. After reaching a critical step in benefit validation at any point in the plan, schedule a meeting of all IT and line department stakeholders to get full buy-in.

6. Create simplified documentation

Each step in the project plan must start with a requirement reference and then move to specify the implementation. This process starts with a plain-language description of the activity, followed by the dependencies, such as the technology required for implementation and the results from previous steps.

If a modeling language like UML defines application logic or integration with human processes, be sure that there is still a plain-language description provided for use by line departments. Refrain from explaining complicated topics, such as software architecture and modeling or programming languages to non-IT personnel.

When the project plan's specifications are complete, schedule a meeting with all the stakeholders, and review the plan and specifications in detail. This is particularly important for the relationship between the IT and line processes, and the tech project lead should be sure to get sign-off from the line managers whose processes are being transformed, the target processes from the earlier step. For this part of the project, assign a technical leader to each step and for steps involving line procedures, include a designated line department representative.

Getting buy-in at this point is critical to avoid future issues and delays. Resistance to a digital transformation can be harder to deal with if there are surprises.

7. Document testing steps

Testing requires special attention, especially any form of integration or load testing. Technical documentation, which starts with the specifications created in the early project activity, must be developed during testing.

For example, there might be a point in the process where there's user input/output associated with the testing. In that case, it's critical to involve the designated line representatives after validating basic workflow logic. Try to limit project discussions to these designated representatives. End users might need additional assistance with visualizing technology steps from descriptions. Live interaction during testing can help identify areas of unmet end-user expectations.

Project leaders can then take steps to either redefine expectations or change the input/outputs. Avoid changes that impact the way the current step affects future steps. Pushing too many changes downstream can lead to change fatigue and increase the risk of errors. Be sure to revise and review specifications to reflect changes made here. During testing of software components, establish and validate both the program logic and the operations practices and tools, such as configuration, orchestration and GITops or DevOps.

8. Address issues early

As problematic as having changes pushed downstream, having them pushed upstream is worse. Not only does this increase the cascading change risk, but the need to go back to an already completed task creates change fatigue and demoralizes both IT and line personnel. Approve changes that require rebuilding the outputs of prior steps only when necessary or where dependencies on the affected components or processes are minimal.

9. Validate goals

When the project plan identifies a point where the accumulated functionality largely delivered a business benefit, ensure that the designated line representative validates the goal and reports this accomplishment to the line department and the IT team.

It's also important to account for the IT and human investments. For example, suppose the transformation involves purchasing equipment and requiring work hours from people. In this case, documenting these resources helps to determine and validate the ROI. The importance of the cost and benefit validation will grow in later testing phases, so expect to spend more time on it then.

10. Plan for employee testing

Once testing has progressed to entire subassemblies, or the whole of IT logic, the designated line representatives can start involving the actual workers in the testing phase. This step is critical to get a broader validation of the overall process flow and allows end users to gain experience.

These final tests can phase gradually into live operation, allowing workers to build confidence before production. These final tests also form the basis for the final buy-in review, which should focus on process improvements to make future digital transformation projects even more successful.

Tom Nolle is founder and principal analyst at Andover Intel, a consulting and analysis firm that looks at evolving technologies and applications first from the perspective of the buyer and the buyer's needs. By background, Nolle is a programmer, software architect, and manager of software and network products, and he has provided consulting services and technology analysis for decades.

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