You can put a price on successful application, implementation, or even company-wide change. You can’t evaluate stagnation. The digital transformation strategy keeps the company afloat, lets it compete in a demanding market, and gives it a competitive edge. What is digital transformation and how can you run it in your firm?

Digital transformation strategy

Digital transformation definition

Every now and then a company internally talks about change. How can we make ourselves more relevant? What does the competition have and how can we make it better? How our technology, tools, business environment help us achieve newly formed goals?

What is digital transformation? In a nutshell, it’s:

  • Update of old or introduction of new machines and applications. They can enable making new products, enhance what it’s currently being made, or introduce an entirely new level of technical and operational proficiency to an organization.
  • Building or increasing automation throughout certain or all departments. Replacing manual and non-digital processes with quicker and easily tracked processes minimizes costs and improves overall effectiveness.
  • Improvement of old and introduction of new internal processes. Linked with new equipment, and therefore time management, task fulfillment, etc.
  • Maturing business. In many cases, digital transformation, the meaning of progress in general, is the culmination of the idea and need for scaling. All previously mentioned component parts are a result of brainstorming and the need for increased market performance. 

Why digital transformation is important?

It… transforms. Everything and forever. If you want it to work, you have to start with why. Especially, if the organization is large but this tip works for everyone.

  • Why do I need new machines and equipment?
  • Why do I need new software?
  • What business goals do I want to achieve by implementing the change?
  • What will be the tangible outcome for my clients?
  • What would be the outcome for my team?
  • How all of it will affect business operations?
  • How all of it will affect marketing messaging?

It starts with the user…

Some people ask “what is digital transformation” and think the only aspect that matters is hardware and/or software. That’s not true. The real value of digital transformation is the reason behind implementing it.

By going with it, you can improve customer experience, shorten the time of service, gather and process data, reduce user friction, boost sales, introduce gamification to the app. These are just examples, you can do much, much more. 

No matter what you’re looking for, the best approach is to focus on the customer. Customer-centricity is the first and last thing you should do when thinking about rearranging things. Digital transformation services are not hard to find but without a practical reason, you will just burn money.  

If what you implement does not serve the ultimate factor, the customer, it’s for nothing. How the software could help elevate your business is less important than how it can help you help users. What brings the money to the company is not a reduced number of employees due to automation or much faster data processing and analytics. These are just tools. Users don’t see them and don’t care about them. They want the product. More specifically – the value it brings to their daily routine.

The problem with digital transformation is that these two words can mean something totally different to different people. That’s why it’s important to set priorities on the only factor that really matters. The customer, also known as a user, and his ability to sustain the company.

… but ends with a long-term plan

It’s worth starting with people that we have established. Now what? Create a plan. You will want that to establish a pattern in the mind of the customer. To see the long-term value of being a customer. You don’t want him to sign up, go through a (even paid) trial period and become inactive or delete the account. That’s not user acquisition, that’s burning money. 

Digital transformation strategy is a long-term game that begins with establishing pain points in the organization and ending with a sustainable pool of highly engaged and loyal users. It’s important because it directs your revenue, impresses investors, even builds relations with media that see increased statistics. Most importantly – it creates real value for the market. 

How to find the right digital transformation strategy?

This is a question that flows in many conference rooms and webinars about leadership and business technical improvements. We strongly believe that the correct answer… does not exist. Meaning that there are tools helpful on the way but there’s not a single solution that works for everyone. As you will find out in a second, that’s actually very good news.

A great attempt for creating a solution is a step-by-step guide developed by the World Economic Forum. It poses the right questions and delivers some interesting points but it’s only a frame. It lacks substance. There are, however, three questions you have to ask yourself and key executives in your company:

  • Where is my industry headed?
  • What will be my company’s role in the future?
  • How can I create a path forward that balances a sense of direction with the ability to adapt along the way?

This is the most important part of this guide but in the larger scheme of things it’s even a little useless. It doesn’t give you any practical advice on the matter. So, here’s the practical part.

To successfully find the right digital transformation strategy:

  • Realize that there’s no universal solution that works for everyone. Every company, even in the same industry, having similar products with similar features, etc. works with different tool belts. That means substantive preparation of the management, budget, people, leadership, company culture, legacy technologies and code, company structure, plans for the next few quarters and long-term frames, etc. If you want to copy-paste a solution that worked for someone else, you risk derailing your own organization.
  • Search for a technological partner that can produce but also advise. There are many companies that can create code but only a few of them that can actually be your partner on the journey. That means UX and UI design, advising on the architecture of the app, technology stack, approach to legacy code, functionalities, quality assurance, etc. 
  • Present your business model and business goals. Many companies creating applications stick to what they know. The code. Business partners offer applications that are in line with what the client actually wants to achieve.
  • Figure out what you don’t want to do. That’s probably the trickiest bullet point. Overpaying for services you don’t need, adding functionalities that can be done later down the road are examples of bad decisions. You can always make a minimum viable product (MVP) with the core functions and then, when you push out the product to the market, build on that. Sometimes it’s better to have something, test, and adjust than have nothing and lose the battle for users and their minds. Sometimes if you’re second, you’re already late.
  • Remember that your company’s vision is not the same as the industry’s direction. A software development company can advise you to follow the market and do things in certain ways but that will not always be the case. Some projects require an even more personal touch and a non-standard approach. Blindly following competitors is not a good idea.

How to lead a digital transformation?

The digital transformation definition is about an organization’s change. That also applies to you. The mindset, the knowledge about the firm, goals, etc. Before you start, you have to prepare. Internally.

  • Identify vulnerable departments (also known as blind spots). What parts of your company are underinvested and underdeveloped? What will require extra work? What parts of an already existing application give you headaches? If, for some reason, you want to keep legacy code, at least temporarily, how will it impact the project? In what way? 
  • Explain the change and methods of making it happen. Not only to your software development partner but most importantly, to your own employees. Talk with them about reasons things must change. Tell them why will it happen, how long will it take, what good will come out for them and clients after this transitional period. 
  • Make sure executives have your back. Or, if you run a smaller company, key stakeholders. There will always be that oppose change. They are not mentally ready. They think old ways are good enough. They believe that if it’s not broken, you don’t have to touch it. Explain to your high-stakes team what will happen and how much their support will help. In highly structured firms, the information goes down. In smaller teams, information takes the form of ripples. No matter the form, people will fear, oppose or actively block change. It’s natural. Be prepared and mitigate the risk of derailing the “digital transformation project”.
  • If internal resistance is too strong, run the lighthouse project. It’s a smaller-scale initiative that can be limited to one business unit. Its impact on the organization will be smaller, the risks minimal, budget more friendly. It will help people understand the scope of the change, and give them a chance to familiarize themselves with what they don’t know or are afraid of. 
  • Water the ground for an agile mindset. It’s not necessary in every case but it highly helps. Not every company knows what agile is, not every company uses it. Some do it to some extent. By working with a software development company, you will be “sentenced” to a certain level of cooperation. It will give structure to the whole process.
  • Figure out how to measure progress. People often forget about this “tiny” remark. Implementing something only for implementation’s sake is short-sighted. You may want to think about increased revenue but it’s not the most important metric. Money is always a result, not a goal. More important is a stable growth of the company, number of users, their engagement, level of satisfaction, and so on. Money will come naturally; it’s the basics we all have to focus on first. 

How did the Covid-19 changed the digital transformation process?

It turned many owners and managers into believers. It sped up efforts to go through with it. Finally, I shifted the optics from “effectiveness” to “resilience”.

Many owners and executives saw that unpredictable events like pandemic outbreaks can seriously impact business. Strategy meetings couldn’t be done in the office anymore. People had to adjust their working schedules. Entire supply chains can be broken in a matter of days. Home budgets impact the structure of expenses and boost the attraction of FinTech applications. These are many factors to cover in a matter of weeks, starting from January 2020.

The Covid-19 pushed companies for cloud migration. Since most of the employees were forced to work remotely, the only effective way to sustain businesses was to look at the sky. 

Customers also moved to online channels. Dramatically, changing not only their behaviors but also the structure of the business itself. People bought more, spent more money on entertainment, and generally forced businesses to go hard on change. 

Digital transformation and its meaning for FinTech

The FinTech market was not an isolated island on the calm ocean. It also took a hit but not as drastic as one could have expected. A report from Houlihan Lokey goes miles to show us how finance technologies were impacted in the first months of the pandemic. 

As suspected, people have panicked a bit. That’s why asset and wealth management products were subject to panic peaks and baby steps for the wealthy and middle class alike. Banking and lending applications went steady because they were built on healthy fundamentals. Payments went through some turmoil due to people being locked.

Those were the first few months, how the situation looks right now? Long-term outlooks are favorable. Investment trends promote founders that focus on customer experience, leading their products to the top on popularity lists. Yes, in the first half of 2020 FinTech market took some short-term hits but now investors are confident in teams’ abilities to recover and thrive. The future looks promising. 

How can you capitalize on that and go through digital transformation to make an even better product?

Talk, listen, talk, listen, implement

In that order. First, internally introduce the need for change. Then listen to the feedback. Next, talk to your software provider about your organization – struggles and goals. Then listen to what is possible, what’s not, and how the goals can be achieved quicker and cheaper.

The last part is the most satisfying one. Let people work while cooperating with them at least once a week on calls. And watch your application grow.