Digital platforms, processes and applications are rewriting the playbook for companies and organizations across industries. According to a recent Gartner survey, 72% of IT respondents believe that digital business has accelerated the pace of business and technological change, with spending on digital tools and techniques averaging more than 11% of the organization’s annual revenue.
In this high-stakes environment, speed is critical. At the same time, companies must justify the underlying business need that digital addresses. Without a comprehensive analysis, the legacy platforms, enterprise applications and business processes that support an enterprise can be compromised. During the initial stages of the move to digital, complexities and turnaround times can increase and weaken the links that connect people and systems back-to-front.
Furthermore, cloud-inspired objectives can sometimes increase costs and organizational uncertainty. Therefore, project managers must define functional requirements, commit to staying on schedule (and budget), and set realistic expectations for the business, its partners and its customers.
Understandably, many enterprises scramble to kick-start their digital initiatives, primarily due to a lack of clarity when selecting the right tools, associated platforms, and applications, as well as setting performance benchmarks. To avoid the most common pitfalls, we recommend the following four-step approach.
Understand the application landscape.
The most common mistake that project teams make when determining the scope of a digital initiative is to limit their focus to applications that connect directly to the end consumer only. What they fail to consider, however, is the impact of back-end and legacy systems that support and inform the overall customer experience. To fully understand their application landscape, companies need to perform a baseline assessment of their current IT environment, taking into account heavy-duty enterprise applications as well as business-process systems. In this way, project teams can deepen their knowledge of how these assets interconnect when supporting short- and long-term goals. Next, companies need to make sure that every aspect of the enterprise – from technologies to people – is prepared to transition to digital business before pushing the “start” button.
Perform a digital assessment.
We advise companies to develop a blueprint of the applications and business processes that will become part of their digital initiative. This task:
Requires a structured assessment of the current application environment and identifies critical business processes.
Maps current applications.
Looks for interfaces that touch multiple processes.
Determines external and internal complexities.
Gathers input from customers and users to prioritize needs.
Ultimately checks all of the above against the overall business environment and objective.
Develop a digital readiness index.
Steps 1 and 2 help companies prepare a digital readiness index, allowing them to confirm their priorities and challenges. A proper index will rate adaptiveness, industry focus, security compliance, maintenance, user experience, improved access and enhanced workflows. Once parameters are defined and weighted, this index can be calculated at the business and sub-process levels. See figure 1 below.
Prioritize digital projects.
The digital readiness index gives organizations a reasonable idea of the processes that will be easy to digitize, as well as those that will be more challenging. However, the index is only a checklist. Businesses also need to consider priorities – and the overall value that digitization is expected to bring to the enterprise – and prioritize processes accordingly. Either way, it is important to develop a digital roadmap. Some businesses may choose to digitize processes that are less challenging; others may decide to proceed with digitizing a critical application that is more complex, but more fulfilling to customers.
Of course, becoming a digital business requires significant investment, executive resolve and collaborative buy-in. Moving forward, we recommend that enterprises start their digital transformation with an assessment of their IT and business environments, including legacy systems and processes supporting back-end systems. We also advise a top-down approach to their digital initiatives — considering the business processes and objectives that impact the customer experience, then identifying and aligning applications and infrastructure components accordingly.
In our experience, a well-informed digital roadmap that aligns well with customer requirements can even be used to benchmark the competition. To stay on track, this roadmap is also invaluable when determining the key measures needed to avoid time delays, functional gaps and potential cost overruns.