A digital road map is typically more of a project list, while a real strategy is a set of programs geared toward a specific future-state vision. We have found that many organizations have some level of a project list, but it isn’t governed or connected by an overarching strategy toward the future digital organization. This future state must consider the three core pillars of a digital strategy: customer experience, operational efficiency and employee engagement. Each of these pillars should have their own vision, linking back to the overarching digital strategy.
For example, a company may seek to implement a new cloud-based enterprise resource planning (ERP) platform, reporting package and expense management system—that is a solid project list. However, digitally transform the finance and accounting function is a true enterprise strategy. A strategy has more depth and takes an enterprisewide approach, detailing why certain solutions are used and ensuring all systems are properly integrated.
A digital finance strategy such as this should encompass process automation, reporting, data strategy, and potentially, artificial intelligence. In addition, giving the enterprise strategy a name helps to create a theme that employees can understand, and gives context for specific projects that follow, thus making change management easier.
Possessing an enterprise view of your systems will help make processes and people more connected, but also make the enterprise data strategy clearer. Beyond process and collaboration, the data is what is most important, so you can learn from the information gathered and adjust the organization accordingly. Looking at your prospect experience versus just prospect pipeline processes and systems adds a whole new meaning to strategy and also what data and information should be collected and analyzed as part of the transformation.
Middle market challenges
Unfortunately, middle market companies encounter many common challenges when making that important leap in the digital maturity progression from a road map to a strategy. Some of the most common issues include:
- Inconsistent leadership: Many people within an organization have varied experience with digital technologies. Some leaders may want to jump in with both feet, while others may want to take a slow and steady approach. To be effective in your digital strategy, the approach and messaging must be consistent throughout the business. Digital skill gaps within leadership need to be addressed or augmented in order to maintain forward momentum.
- Limited vision: Some leaders may consider moving to the cloud as a digital strategy. That is a goal, but it does not encompass how to reach that destination. An example of a more effective vision would be to move toward finance transformation, with specific steps to implement an ERP system, robotic process automation for invoices, expense management and financial close solutions. Failing to make the connection between goals and outcomes is a major roadblock for middle market companies.
- Digital decision-making: Many companies rely too much on information technology, when IT should not drive all digital investments. IT will likely understand certain components, but leaders and representatives from specific departments need to be the experts on key tools and applications. In addition, companies often fail to consider the security and privacy risks involved with innovation. An effective digital strategy must consider quickly evolving risks and privacy regulations at the start. Each organization should identify the core digital team to make and champion digital investments.
- Digital as a continuous process: Innovating and implementing digital technologies to improve your business is not a one-time event, but something that will constantly evolve over time and needs to be continually addressed. Determining how to make not only innovation but also digital transformation a continuous part of your operations is a critical element of a successful strategy.
- Shared services for automation: Companies must understand that many technology tools will help everybody in the organization—including robotic process automation, data analytics and artificial intelligence. If you do not gain control of these tools under a common umbrella, they will emerge in multiple areas of your business. These solutions will need a center of excellence (COE) environment and a common toolset to gain a maximum return on investment.
Until recently, companies did not have access to technologies that were so pervasive throughout the organization, and the pace of change has increased significantly. Companies simply did not face today’s velocity and volume of new technology—investments that are easy to deploy by almost any resource in the business. Therefore, companies must bridge the gap between an individual projects approach and a comprehensive strategy with better leadership and connectivity.
Where do we go from here?
To take the next step between a digital road map and a digital strategy, your leadership and necessary stakeholders must all have digital knowledge and capabilities. In many cases, leadership has been in place for many years, even decades, but now digital leadership is a necessary key to success.
This enhanced perspective enables a twofold approach to innovation: a group or function should drive technology advances at the enterprise level, while division or departmental leaders should implement their own initiatives to plug gaps and improve execution. Leadership must engage in active and intentional learning to increase digital literacy for themselves and the organization as a whole.
Make no mistake, adopting and driving a digital strategy is not easy; people, process and technology implications will require some level of organizational change management. Compare building a house to building a digital strategy. You wouldn’t just start digging the foundation; you would hire an architect and consult with experts to create a vision for the home.
In the same manner, seeking an outside perspective is important to help you understand where you need help, and provide a second opinion on how to best develop a digital strategy. Many companies do not have the experience with, or exposure to, the elements of a successful digital approach, and risk implementing misaligned or duplicative innovations, and making poor investments.
Every company is different, and therefore, should approach digital transformation from a slightly different angle, while keeping those three key pillars in mind. The key to improving the inconsistent state of digital transformation in the middle market is facilitating a discussion between stakeholders across the business and creating an environment of collaboration. Once your people are aligned, you can integrate the right resources, and increase momentum toward becoming a more effective digital organization.