If you could ask the 70% of companies that fail at digital transformation what went wrong, you’d get a myriad of answers. But based on our research, we can make an educated guess about at least some of the crucial actions they missed that ultimately led to them falling short of goals. 

What are the steps to digital transformation that you just can’t skip over? Let’s find out below.

9 Steps to Digital Transformation Every Business Would Benefit From

1. Understand what digital transformation really means

You don’t want to build a strategy atop a poorly defined or misunderstood idea of digital transformation. It can be a buzzword that loses meaning the more it’s thrown around, so let’s establish a clear definition before we dive into the next steps.

Here’s an excellent definition of digital transformation from Yokogawa: “the novel use of digital technology to accelerate business strategy. It is about the application of digital technologies to empower people, optimize processes, and automate systems in the organization to radically reorient its business performance.”

Do not confuse digital transformation with the act of digitalization. To understand the difference, let’s look at Adobe’s major transformation from selling one-time software licenses to creating the Creative Cloud and selling monthly subscriptions to its software. The digitalization part was its use of cloud technology. The digital transformation occurred when the company leveraged the cloud to completely change its business model and boost its profits.

So as you undertake the steps to digital transformation, keep in mind that it’s so much more than installing new software or automating a single process.

2. Assess

Once you have a firm grasp of what digital transformation is, it’s time to take stock of your current situation. It’s a good idea to reference any business plans you have, as this can be a way to measure whether you’re meeting those goals and whether you’ve outgrown those plans.

This is a fantastic time to begin listening sessions or focus groups with your customers, employees, and leadership team to gain a holistic view of the organization.

Questions to ask:

  1. In what situations do we feel under-resourced? 
  2. In what situations do we thrive?
  3. What achievements are we proud of, and what did we learn from those achievements?
  4. When have we failed, and what did we learn from those failures?
  5. Do we currently have any digital strategy in place?
  6. How can technology improve our processes, productivity, and performance? 
  7. What are our current success metrics? Note things like revenue, profit, year-over-year growth, sales, etc.

Be sure to document these answers and store them in a centralized place. Consider measuring and tracking your metrics in a KPI or business metrics software. You’ll want to revisit this data throughout your digital transformation journey.

3. Define the goals and a vision

Goals are objectives with measurable outcomes. A vision is an overall view of what your world will look like should your organization achieve digital transformation. Both are crucial to tracking your progress and staying motivated throughout the journey.

To define your goals, revisit the answers you uncovered in the previous step. You can also allow each team to brainstorm their own departmental goals they’d like to add. Eventually, you’ll need to narrow down and solidify the goals you’ll want to make a part of the official digital strategy roadmap. You can institute a voting system or leave it up to your leadership team to make the call.

To come to an agreement on a clear vision, ask your team:

  1. When we achieve digital transformation, how will the employee experience look and feel?
  2. When we achieve digital transformation, how will the customer experience look and feel?
  3. When we achieve digital transformation, how will our business operate in new ways?

4. Create a digital strategy roadmap

Using the goals and vision you landed on in the previous step, build out your digital strategy roadmap. This takes it one step further by detailing:

  • Why do we need this digital transformation?
  • How will we achieve it? What technologies will we implement? What is the estimated cost?
  • When will we achieve it? Create a timeline and assign due dates for goals and tasks.
  • Who is responsible for each piece of the strategy? Increase accountability by assigning owners to each task and initiative. Do not underestimate the importance of this.

According to global management consulting firm McKinsey: “Digital transformations are more likely to be exceptionally effective when companies give people clear roles and responsibilities and put an ‘owner’ in charge of each transformation initiative. The chance of superior outcomes also rises when companies hold people accountable for meeting the individual goals they’ve been given.”

If you want an example, here’s a digital transformation roadmap from Jibility.

5. Get buy-in

Without buy-in from employees and leadership, your digital transformation will fall flat. Buy-in means that all the parties involved understand the importance of digital transformation and are invested in its success. 

So how do you get buy-in?

  • Listen. The focus groups mentioned earlier are an initial way of earning trust to get that employee buy-in. People want to feel listened to, especially when there is a big change coming. They will have concerns and ideas, and the more you listen to and heed their feedback, the better they will feel about the change.
  • Show them the value of digital transformation. It’s tough to garner commitment to change when you haven’t shown the value of that change. Communicate the value of digital transformation in as concrete terms as possible, even with estimates. For example, will adopting this new process save your employees 10 extra hours a month? Will updating your products result in 25% higher profits, which will trickle down to salaries and pay raises? Show employees why it matters, and you’ll earn their commitment faster.
  • Reassure them that you’re not out to replace their jobs, but enhance them. Many people are leery of technology because they fear it will replace them. Show your employees how digital transformation is about enhancing their jobs, not replacing them.
  • Provide proper training and upskilling. Adopting new technology is only the beginning. Once it’s implemented, employees need to feel empowered to use it. That’s where training and upskilling come in, ensuring that your workforce knows how to leverage these new digital tools.
  • Regularly celebrate the small wins. Maintain motivation throughout the long process of digital transformation by celebrating small milestones on a regular basis. This can be at the company all-hands meeting, where you give shoutouts to different departments on the progress they’ve made thus far in your organization’s transformation.

6. Test 

Now that you’ve laid the groundwork for your digital transformation, it’s time to start making changes. Look at this step as a trial phase. You’re simply testing out the different technologies that you’ve outlined in your digital strategy, making small bets before you invest completely in something that may not work. Many software companies offer demos and free trials to let you try out their product before you go all in.

7. Measure

Remember the step where you took stock of your situation? Pull out those metrics so you have a baseline to compare against. Now, take those measurements again. Did productivity increase? Did you see a revenue boost? Is customer satisfaction higher? Which new technologies and processes can you tie to any positive gains you’ve seen?

Here’s a real-life example from SupportZebra: When the contact center underwent a fundamental business change from in-person to work-from-home during the pandemic, there was a huge spike in customer complaints about noise. By installing noise-cancellation software Krisp, SupportZebra achieved a 78% drop in those complaints. The simple addition of this AI-powered noise-cancellation technology allowed them to continue their transformation. And they saw measurable improvements, proving they were on the right track.


8. Invest

Once you’ve placed small bets on new technology, taken it for a test run, and measured the results—it’s time to go all in. Investing in the most promising technology that has shown results is crucial to digital transformation.

This doesn’t mean you can’t change course later; far from it. As we’ll talk about in the next step, you will need to continuously refine your tools and processes throughout your digital transformation.

9. Iterate

Your success in digital transformation will depend on your ability to iterate, measure, tweak, and iterate—over and over. Being agile in your processes will allow you to move quickly, which will give you a competitive advantage. 

McKinsey found that companies that moved the fastest had revenue growth that was almost twice that of companies that had only average reaction times. Why? According to the article “Why digital strategies fail,” published in McKinsey Quarterly: “First movers and the fastest followers develop a learning advantage. They relentlessly test and learn, launch early prototypes, and refine results in real time—cutting down the development time in some sectors from several months to a few days.”

Which of These Steps to Digital Transformation Will You Take Next?

Using technology to fundamentally change and improve your business takes time, and you won’t always get it right. Be open to exploration and pivoting as needed. 

Your organization is on its own unique journey, so go back over these steps to digital transformation to decide where you land. From there, you and your team can collaborate to figure out how best to approach your digital strategy roadmap.