The CMO Guide to Digital Transformation
Digital transformation is one of the newer buzzwords to hit the marketing channel. It may leave you wondering what it’s really all about, which is why I’ve put this guide together. The CMO Guide to Digital Transformation is a step-by-step map of what digital transformation looks like and how you can start the process in your own organization today.
What Digital Transformation Actually Is
Altimeter Group has an excellent definition of digital transformation: “The realignment of, or new investment in, technology and business models to more effectively engage digital customers at every touchpoint in the customer experience lifecycle.”
Brian Solis, a principial analyst of the Altimeter Group, also has a very similar definition: “The realignment of or investment in new technology, business models, and processes to drive value for customers and employees and more effectively compete in an ever-changing digital economy.”
I personally like that Solis adds in the perspective of the customer – digital transformation is meant to provide value to the customer while also enabling the organization to more effectively compete in the market.
Types of Digital Transformation
According to CIO Forum.com, “Digital transformation is part of a larger business transformation program and each company will implement it according to their own requirements, which could include some or all of the following:
- Big data and its use
- Data security
- Data privacy legislative and compliance issues
- BYOD and e-discovery
- Social Media
- Mobile Computing
- Cloud Features for sales, support or internal use”
The Stages of Digital Transformation
There’s a few diagrams out there that show how an organization moves through a set of stages for digital transformation.
I think they’re all perfectly valid, but my biggest critique is that it implies the journey ends after completion, or that this futuristic state is even what customers want or need.
Sure – you can arrive at a place where you and your organization are able to tackle change as it comes; digital is no longer a scary channel but a way to innovate and accomplish great unknowns.
But it means nothing if your customers don’t or can’t follow you through this transformation.
Even more useless if you can’t attract new customers because of a digital transformation.
It’s possible – dare I say it – to transform in the wrong direction.
The retail industry as a whole has been struggling to maintain it’s footing in an evolving consumer landscape. Sears, Target, Aeropostale, and Nordstrom are just a few retailers that struggled in 2016. In a poll, 50 leading CPG companies showed that online commerce ranked as the second leading driver of change over the next five years. One can argue that the retailers listed in my example have a host of other issues and while that’s true, these companies also lacked digital initiative only adding to their list of troubles.
And the only way to combat this is to look at digital transformation as a cycle – something that has to be continuous, proactive, and extremely informed.
The thing about time and technology is that certain technologies do become legacy, and it takes a lot of effort to move dinosaurs. As long as technology is important to our society, it’s going to be a constant process.
So, as you go through each stage keep in mind the core message: change is the only constant.
The Concrete Steps of Digital Transformation
We actually wrote about how to go about your own digital transformation. In summary, the steps for digital transformation:
- Assess the current market and set a benchmark.
- Use competitive information – but sparingly.
- Map the Customer Journey.
- Build your strategy for digital transformation.
- Assign a budget to the entire process – and expect it to change.
- Create a change management plan.
- Determine a (reasonable) timeline.
- Build a Digital Transformation Team.
- Benchmark and measure every step of the way.
These steps actually align to a greater framework for digital transformation, and it’s a set of stages we believe are more iterative rather than finite.
The Assess stage combines a few of the steps mentioned above–assess the current market and set a benchmark, use competitive information but sparingly, etc.
This part of the journey makes no real assumptions. It’s, instead, informed as the assessment of the current state of your business enlightens you and your team while also demystifies.
This stage also includes documenting the current executive-level goals, state of the market you’re in, and the major challenges of your organization.
Steps that are within the Align stage include mapping the customer journey and building the actual strategy for transformation.
Typically in this stage, you’ll do an ever deeper dive of both the digital and process aspects of your organization. You’ll learn how to audit your technology through the four key elements of people, process, tools, and data. I actually cover this later in the post.
But customer journey mapping is still something many organizations opt out of.
According to Vala Ashfar, Chief Evangelist of Salesforce, “the #1 challenge facing executives (71%) is understanding behavior or impact of the new customer. Yet, only half (54%) of survey respondents have completely mapped out the customer journey. This means that many companies are changing without true customer-centricity.”
We’ve actually seen this as consultants to large enterprise brands. Remember when I said it’s possible to transform in the wrong direction?
The Align Stage also means that you being to identify the quick-wins and the concrete must-haves in order to accomplish your goals.
This is where “building the strategy” comes in.
The transformative part of this entire process is almost how natural and easy it comes to you and your team on exactly what needs to be done. The bigger debate lies in how it is done.
Executives are often unsure of what to do next with digital transformation.
Typically, this stage is dedicated to more concrete parts of the project: creating a budget, assigning a timeline, building out the team. Leadership, however, tends to give these responsibilities to other internal champions for digital transformation. Even knowing which direction to go in is a challenge.
It’s easy to mobilize once you know where you’re headed. For the Enable Stage, we highly recommend testing your options.
It’s much easier to prioritize the opportunities you have when you can create a proof-of-concept. Why undergo a huge transformation in your organization when you can test a few ideas, see how the market (and your company) reacts, and go from there?
Based on your quick-wins from the Align Stage, the Enable Stage actually acts on them in a smaller sense without such high-risk / unknown reward scenarios – all while preparing for the bigger project at hand.
This could mean:
- Prioritization based on capabilities, cost and goals
- Deliver quick wins with high-impact, low-effort options
- Establish a baseline and KPIs to measure overall success in Marketing performance (efficiency and effectiveness)
- Train and internalize the big picture and how the components contribute to wins
- Review all aspects of data, technology, process and people involved
- Engage a few teams to test some ideas while also building the future framework
Other absolutely crucial steps include giving the
Improving your digital transformation process involves the following:
- Evolve marketing’s capabilities to deliver customer experience
- Identifying breakout opportunities
- Finding Synergies through integration of systems and data
- Develop an Agile Marketing mindset for execution and evaluation
Elevation looks at digital transformation in terms of longevity. To put it simply things are always changing and you have to change with them. You’ll need a team ready to take on the challenges of having to reinvent and transform time and time again.
You’ll only know how far you’ve come from where you’ve been. Benchmarking your starting place is important for when making changes in the future. Past goals, failures, and accomplishments will guide future decisions.
Defining Transformation Requirements
Writing the most badass RFP (Request-for-Proposal) ever ensures a few important things. 1) You’ve thought thoroughly and strategically about what you need from a partner. 2) There’s less room for error and major surprises or hick-ups when you know what you need out of the project.
How to Audit People, Process, Technology, Data
We’ve talked a lot about the steps and framework for digital transformation, and what it actually looks like to accomplish a digitally transformed organization. It starts with auditing what you’re currently doing from these four aspects:
Ask yourself what your team’s capabilities are. The people in your organization are so vital to the success of the transformation process and will help you determine what type, if any, partner yu should bring in to fill the gaps. Does your team work well together, does your company culture support knowledge expansion and offer appropriate internal and external resources in order to be successful?
Does your team work well together, do you have a company culture that supports knowledge expansion and offers appropriate internal and external resources to be successful?
Your team will lead the charge in digital transformation and the CMO should be a the forefront of leading and encouraging the company in digital transformation success.
Big changes require plans. Every organization taking on a major project needs a process for how the changes will take place. Everyone needs to know their role and how it impacts their roles and how it affects their teammates.
Notice that tools were not on the top of this list. You can have the biggest and badest tools but if your team doesn’t have skills or understand the change management process you’re in big trouble. Tools are in place to make processes run but it’s the strategy behind them that makes them run well.
There are three basic tools every organization should have. The exact tool only matters when comparing the scale of your company to those tool’s capabilities.
- Content Management System (CMS)
- Customer Relationship Management System (CRM)
- A Web Analytics Tool
Analysis of your operations can be eye-opening. When it’s analyzed thoroughly it can tell you much about your customer’s behavior, campaign strategies that are working or not working, content that’s engaging and so much more.
Transformation Strategy before Marketing Technology Implementation
Digital transformation itself is going to require some serious strategy. For all you CMO and marketing executives, I imagine the strategy part is natural and easy to you.
Do not let the current state of your technology restrict you from striving for the best experience not just for you, but for your customers.
When building the transformation strategy for your organization, it’s too easy to get caught up in what tools you want and need to implement. Try to not let that
Figure Out Technology Together
This is where you, dear CMO, lean on your CIO for help. Good luck!