Four steps to creating a digital transformation roadmap
Article by New Relic APJ chief architect, Peter Marelas.
Companies are often split into two camps when it comes to technology maturity. One is trying to accelerate technology and software delivery to keep up with customer demand and drive competitive differentiation. The other is drowning in technical debt, keeping existing business systems operational with minimal investment.
Established companies operating in established markets tend to fall into the latter category because, for them, overcoming technical debt requires large-scale technology and skills transformation. Despite the challenges, these companies recognise they don't have a choice and must pursue a transformation to get back to growth.
The question is: what separates a successful transformation from an unsuccessful one? Here are four steps companies can take to create a roadmap for a successful digital transformation.
1. Set realistic transformational goals and milestones
Established companies embarking on a digital transformation may be tempted to follow in the footsteps of younger, more agile competitors. This, unfortunately, is a recipe for failure. Instead, companies pursuing a digital transformation should recognise they operate under a different set of conditions that will lead to greater obstacles and challenges that the younger, more agile competitors never experienced.
Technology teams, in particular, must not assume that what works for another company will work for them. Instead, they must understand and address the challenges that are unique to them and them alone before commencing any digital transformation projects.
By talking to customers, employees, analysts and industry peers in similar situations, realistic goals and milestones can be established that set up a company's digital transformation projects for success from the outset.
2. Focus on the customer experience and key customer journeys
Once the goals and milestones of a digital transformation project have been set, it's vital to step back and think about the key performance indicators that will be used to measure quality and progress.
It is often the case that technology teams cannot quantify how their contributions and actions impact the business. Therefore, establishing a relationship between the technologies these teams manage and the business processes they support is paramount to ensuring technology and the business drive together towards a common goal.
An online pizza business, for example, needs to ensure its ordering, fulfilment, dispatch and delivery processes are working harmoniously so that a positive customer experience is created. The teams responsible for the technology behind these processes need to be intimately familiar with the systems, services and sequencing required to process these customer journeys.
Questions tech teams may want to ask themselves as they uncover customer journeys could include:
- What is the business importance of each customer journey?
- Are all customers associated with this customer journey equal?
- Should customers be segmented to express priorities, and how should they be segmented?
- Where does a customer journey start and end?
- What metrics should be measured that correlate with customer experience?
- What thresholds must be met to deliver a satisfactory customer experience?
- What is the business impact of failing to meet these thresholds?
By establishing a clear understanding of the customer journeys, metrics and thresholds, technology teams will be in a stronger position to understand the business impact of their decisions as they navigate the challenges a digital transformation will inevitably throw at them.
3. Use observational data to support real-time decisions
Transformational project leaders often find themselves having to balance a company's desire to innovate quickly while maintaining the operational state and stability of the technology platforms supporting the business.
Observability can help companies balance these concerns by enabling technical teams to observe the results of their actions in real-time and react to unplanned issues or surprises quickly. This is what separates observability platforms from reporting systems. Observability is about helping organisations understand current and imminent risks, which allows them to move fast with confidence, knowing they can react quickly and reverse decisions.
Companies can enhance the value of observability further by enriching customer journeys with business and financial context. This allows planned and unplanned events to be quantified in business terms, which can justify actions back to the business that aligns with the business's objectives.
4. Close the loop
Achieving true digital transformation is a lengthy process, and companies should expect to experience challenges along the way. The key to dealing with those challenges is to anticipate them by constantly reviewing, making amendments, and using data to determine a business's direction.
Taking time to understand whether or not part of an initiative has succeeded or failed will help improve future iterations and new projects. Of course, there will be periods of both high-risk and low-risk where varying levels of input are required. However, any meaningful change requires teams to move away from a "set and forget" mindset to understand the continuous state of a project that will require a continuous stream of data and insights.
Observability and technological innovation go hand in hand, which is why observability must be baked into digital transformation strategies from day one. After instrumenting customer journeys, reviewing their success - or failure - and taking steps to remediate and improve things for the future, digital transformation can prevail. Then, the hard work of these initiatives will allow technology teams to scale, and the benefits of technology investments can be realised.
Article by New Relic APJ chief architect, Peter Marelas.