The 4 Pillars of Successful Digital Transformations
Digital transformation can mean a lot of different things. For leaders, it can be hard to know where you should be focusing investment — and what kind of digital transformation you’re really after. The authors outline four pillars of digital transformation: IT uplift, digitizing operations, digital marketing, and new ventures. Which pillar is the right starting point for your company depends on your context, needs, but also your digital maturity.
Despite years of discussion, understanding what digital transformation means for established companies remains a daunting challenge. Leaders put in charge of a digital transformation feel pulled in many different directions, with competing demands from IT, marketing, sales, and operations. Without a clear understanding, the wrong people are often put in charge, with the wrong resources, and the wrong KPIs, setting the digital transformation project up for failure.
The key to cutting through the confusion is to see that digital transformation is not a single thing, but a multi-faceted journey with differing goals depending on your industry and digital maturity. Just as we had to evolve our view of computers after their introduction — from a device performing a narrow set of tasks at the edge of the organization to one that performs many tasks, in many different ways — so it is time to evolve our view of digital transformation, from a monolithic concept to understand that digital transformation means many different things for different parts of the organization. Doing so will help you articulate what kind of digital transformation you’re really talking about, and plan accordingly.
Based on our collective research on companies undergoing digital transformation, we offer a simplifying framework to cut through the confusion and conflicting demands. The framework outlines the four pillars of digital transformation we see today: IT uplift, digitizing operations, digital marketing, and digital businesses. All four are part of most companies digital transformation journey. But without understanding how they are different, it’s confusing to understand what to do next or how to invest — the resources, tools, goals, C-Suite sponsors and KPIs required for success are totally different in each case. Being clear about their differing demands can help you make smart tradeoffs and clear progress.
Below we outline the four pillars and how to invest properly to set yourself up for success. Which pillar is the right starting point for your company depends on your context, needs, but also your digital maturity. Typically, companies tackle the first pillars we describe near the start of their digital transformation journey, although as they mature they may continually upgrade to add additional pillars.
For many companies, digital transformation starts with upgrading the company’s IT infrastructure as well as mobile infrastructure, data lakes, and the cloud. Essentially, this is an opportunity to use budget allocated to “digital initiatives” to modernize IT and communications platforms within your enterprise. When completed, an IT uplift provides your company access to up-to-date tools that offer increased employee efficiency, lower IT maintenance costs and increased employee satisfaction.
Some companies are already deep into this journey, but many other companies struggle with questions about how to upgrade the digital infrastructure. Often this is the first step on the digital journey. It requires IT architects and time, but promises up-to-date platforms with more effective tools to serve customers at lower cost of maintenance. But for more mature digital companies, investment is still required to use advanced tools such as artificial intelligence.
Typically, the CIO or CTO should lead this pillar of digital transformation and the KPIs to indicate success are access to new tools, reduced maintenance costs, improved employee satisfaction, and better business performance.
