Developing and implementing a digital strategy. This is how it works.

What are the questions that companies have to ask themselves when creating a digital strategy?
One thing is clear: people, technology & management are sometimes the most important factors.

Geschrieben von
Alexander
October 16, 2020
-
10 min reading time
[Digitale Strategie] Wie wird sie entwickelt? (inkl. Phasen) Headerbild
Inhaltsverzeichnis
  1. Develop digital strategy
  2. Responsibility for digitization
  3. Roadmap digitization (phases)
  4. Conclusion
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For companies, developing a digital strategy represents a complex challenge in terms of the associated technological, cultural, strategic and organisational changes. In this article, we will look at some aspects of digitalisation strategies and provide valuable tips and examples for successful implementation.

Developing a digital strategy

There is hardly a company today that does not consider digitalisation to be one of the cornerstones of its future success and competitiveness. And yet only a few companies have a comprehensive and integrated digitalisation strategy in place. One reason for this is the lack of a generally accepted definition or standard procedure for the digitalisation mega-trend. An organisation's digital transformation can be a multi-layered and complex process, which is precisely why its strategies and goals should be clearly defined. In any event, digitalisation is a field that must be embedded in a company's DNA, meaning it needs to be incorporate into all its actions and decisions.

If companies develop their digital strategy in line with their corporate strategy, digitalisation can act as a driver and enabler for tackling many of their challenges. In this context, it is helpful to clearly define the company's current goals. Regardless of whether it's about efficiency gains, cost reductions, customer satisfaction, product quality, portfolio innovations, company growth or restructuring, establishing a digitalisation strategy that is aligned with these goals can lead to long-term success.

A digital strategy may consist of various building blocks that each organisation needs to populate with specific sub-strategies and measures, in line with its situation and priorities.

So können die Bausteine der digitalen Strategie aussehen

 

Most companies focus on the topics of "portfolio" and "value chain" and the main questions associated with these priorities for action:

• How can digitalisation help us to create better products and services and to become more customer-oriented, faster and more efficient?

• How can we use digitalisation to offer our business partners and customers added value and new business models?

• How can digitalisation make our daily work and business processes, whether administrative or production-related, more pleasant, efficient, robust and transparent?

• Which insights can help us to make better, more future-proof and faster decisions?

While the left pillar is closely related to the strategic (re-)orientation of the company, the right one focuses on the optimisation of workflows, processes and working environments. Both pillars require a solid foundation that not only takes the technical aspects into account, but above all the organisational and cultural ones.

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Digitalisation strategies – who is responsible?

Typically, the development, co-ordination, and implementation of all these strategic building blocks within the organisation as well as the creation of interfaces between technology and business is the domain of a company's chief digital officer (CDO).

Some companies have implemented parallel digitalisation programmes under the overall leadership of the CDO to ensure that the two pillars are coordinated and integrated. It can make sense to separate them, as the priorities may vary greatly (both strategically and operationally) depending on the company's size and main focus.

Digitalisation roadmap: What factors are important and how can such a roadmap be created? (Phases)

It makes sense to develop a roadmap based on the strategy that has been formulated and the measures that have been derived from it. Such a roadmap should always be tailored to a company's needs, in order to take specific factors such as the digital status quo, investment power, culture, technology, etc. into account. In addition, each organisation has its own short-term priorities and areas of focus. Companies are rarely in the fortunate position of being able to devise a "greenfield" digitalisation strategy. Often, it is rather a question of guiding an existing organisation through the digital transformation while maintaining or enhancing its ability to act in the short and medium term by means of digital measures.

In these efforts, it is essential to have sketched out an "overall digital picture", into which all on-going and newly launched sub-projects must fit like the pieces of a puzzle. Decisions on product development, systems, tools and many other matters can no longer be made autonomously without keeping an eye on the overall digital strategy. Without a doubt, this is one of the biggest challenges regarding the communication, coordination and implementation of an organisation's digital strategy.

Such a roadmap can help all those involved in the company to gain a better understanding of current and planned measures and how digital change will affect the entire company. Among other things, a roadmap should take into account the following elements:

  • Transparency regarding the sequence of digitalisation projects (which sub-projects are independent of one another and run in parallel and which build on each other?). This not only applies to classic sub-projects but also to the mapping of new strategic developments or portfolio changes
  • Transparency regarding the technical systems and their future interaction, which should ideally be aligned with the company-wide business processes

This enables the creation of a future-oriented overview that helps to visualise the objectives and the planned corporate transformation at a higher level and also serves as a guideline. And the communication of the strategy and the associated roadmap by senior management is an important starting point for the various digital transformation measures within the company.

Getting people on board

For any digitalisation strategy to be successful, it is vital to pay close attention to cultural change. This naturally includes enabling – that is, educating – employees in the use of new technologies, but also communicating why digitalisation is business critical and what it would mean to miss out on this trend. Apart from these "basics", our experience shows that other measures can also have a positive impact on change:

A focus on users

Digitalisation is not an end in itself. Its purpose is to help to make companies future-proof, gain market share or become more competitive. At the same time, it also needs to focus on users. In their private lives, employees are by now used to performing virtually all tasks with the digital support of their smartphones and a high degree of user-friendliness. In working environments, however, they are often faced with the exact opposite: paper-based forms, lengthy and non-transparent processes, daily work routines that are not seamlessly integrated, etc.

Digitalisation also has to offer employees noticeable added value and a "consumer-like" user experience. As soon as people personally experience the added value of digitalisation, they will be more willing to support cultural change.

Flagship projects

In every company, there are innovative and open-minded employees and more reserved ones. The trick is to identify those who are ready for change and to implement the first flagship projects together with them. Selecting the right flagship projects is essential: Use cases that offer a high ROI, a high degree of added value for customers or a significant improvement in the working environment are ideal for this purpose. Experience shows that implementing these projects with people who have an affinity for digitalisation is more effective than any management directive. Positive word of mouth is the best kind of publicity.

Internal marketing and communication

Rather than relying exclusively on the office grapevine, it is important to turn the above-mentioned flagship projects into company-wide success stories. Before-and-after analyses, fact-based statements from colleagues and satisfaction surveys should be collected and communicated via internal media such as the intranet, company events and other channels. Experience shows that successful internal case studies lead to numerous imitators who only realise through a specific application example that they have a similar use case that would benefit from digitalisation. In many of our projects, such in-house flagship projects almost always led to a "rush" of new digitalisation measures in other departments, which would not have been possible with a top-down strategy.

Regular communication of new successes is also important in this regard. As digitalisation is not a project that will ever be completed, companies should establish a continuous flow of information on best practices, success stories and the latest developments. In principle, the procedure is no different from any marketing and sales strategy, with the only difference that it is directed inwards.

Provided that a sufficient number of successful digitalisation measures are in place and that these have also been appropriately communicated within the company, it is also possible to conduct company-wide surveys. In one of our projects, the new digital workplace was voted number 1 in the company's worldwide IT satisfaction survey just nine months after being launched. This gave an enormous boost to the further expansion of the company's digitalisation measures.

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Conclusions on the digital transformation strategy

Successful digitalisation strategies and measures are a mixture of top-down and bottom-up strategies. The creation of a digital strategy is a C-level task that needs to be tailored to the company's overall strategic goals. It needs to be defined for the entire company, with clear and transparent objectives that can be understood by everyone.

Wherever possible, such a strategy should be implemented from the bottom up, with strong support from the management. In order to get people on board, it is often more effective to pursue a pull rather than a push strategy, i.e. to stimulate the appetite for digitalisation by means of appropriate flagship projects instead of prescribing it from above.

However, it's up to senior management to push for a company-wide digitalisation strategy. Contrary to what some board members may think, digitalisation needs to be comprehensively managed by the company leadership rather than being delegated to the IT department, as it will transform the entire organisation, including its the culture and strategy. While numerous large firms have already introduced the position of CDO at senior management level, there is unfortunately often an urgent need for action in medium-sized companies.

Bringing in consulting firms (as consultants or external CDOs) to provide professional support for digital transformation and enable learning from best practices can help to avoid mistakes and increase the probability of success, as do exchanges of experiences between companies (both within and across sectors).

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