6 Stages of Digital Transformation: From “Business as Usual” to “Present and Active”

In today’s era of “Dig­i­tal Dar­win­ism,” soci­ety and tech­nol­o­gy are chang­ing more quick­ly than most com­pa­nies can adapt. From cloud com­put­ing to social media to real-time omnichan­nel mar­ket­ing, new tools, plat­forms, and chan­nels are cre­at­ing unprece­dent­ed oppor­tu­ni­ties to con­nect with cus­tomers and improve inter­nal processes—but only for the com­pa­nies agile enough to trans­form and adapt to these new dig­i­tal realities.

Ini­tial­ly, many organ­i­sa­tions resist­ed the idea of dig­i­tal trans­for­ma­tion, insist­ing that their tra­di­tion­al exper­tise and rep­u­ta­tion would keep their cus­tomer bases loy­al. But that’s turned out to be a false assump­tion in many cas­es, as long­time cus­tomers con­tin­ue to migrate to dis­rup­tive com­peti­tors who pro­vide more friend­ly, per­son­alised, dig­i­tal-first services.

Today, most busi­ness­es have learned these lessons, and now recog­nise that dig­i­tal trans­for­ma­tion is cru­cial to their own sur­vival. Even so, there’s no sin­gle roadmap for dig­i­tal trans­for­ma­tion; the path is dif­fer­ent for every com­pa­ny and industry.

But pat­terns can be detect­ed. The 2016 Altime­ter Study, “The Six Stages of Dig­i­tal Trans­for­ma­tion,” iden­ti­fied a series of com­po­nents and process­es that form the foun­da­tion for dig­i­tal change. The researchers organ­ised these ele­ments into six stages.

The six stages

In the first stage, “Busi­ness as Usu­al,” organ­i­sa­tions oper­ate on lega­cy prin­ci­ples, per­haps adopt­ing new tech­nol­o­gy, but main­ly seek­ing to remain rel­e­vant with­in their tra­di­tion­al par­a­digms. As this approach fails in the face of dig­i­tal dis­rup­tion, many com­pa­nies awak­en to the “Present and Active” stage, in which pock­ets of exper­i­men­ta­tion begin to improve cer­tain touch­points and processes.

Suc­cess­es in that sec­ond stage often lead to the “For­malised” stage, where dig­i­tal exper­i­men­ta­tion becomes direct­ed and inten­tion­al, and ini­tia­tives become bold­er. As groups of dig­i­tal inno­va­tors recog­nise the poten­tial of col­lab­o­ra­tion with oth­er teams, the organ­i­sa­tion may enter the “Strate­gic” stage, in which shared insights give rise to large-scale strate­gic roadmaps for new dig­i­tal efforts.

Guid­ed by these roadmaps, a busi­ness may enter the “Con­verged” stage, in which a ded­i­cat­ed dig­i­tal trans­for­ma­tion team active­ly begins to shape a com­pa­ny-wide dig­i­tal-first infra­struc­ture. This may ulti­mate­ly lead to the final “Inno­v­a­tive and Adap­tive” stage, where ongo­ing dig­i­tal inno­va­tion becomes the stan­dard par­a­digm from the exec­u­tive lev­el on down, and ded­i­cat­ed teams of strate­gists proac­tive­ly iden­ti­fy and act upon emerg­ing dig­i­tal trends.

Most busi­ness­es have pro­gressed only part­way along this path. Extreme­ly few, if any, have reached the final stage of proac­tive, organ­i­sa­tion-wide dig­i­tal inno­va­tion. In most com­pa­nies, trans­for­ma­tion pro­ceeds piece­meal; inhib­it­ed in cer­tain areas while enabled in oth­ers; high­ly depen­dent on atti­tudes of the com­pa­ny lead­er­ship, abil­i­ties and roles of dig­i­tal change agents, cus­tomer touch­points, data ana­lyt­ics, tech­nol­o­gy inte­gra­tion, and dig­i­tal literacy.

It all begins when “busi­ness as usu­al” ceas­es to be good enough.

The first transition

There’s com­fort in tra­di­tion­al busi­ness prac­tices, espe­cial­ly for com­pa­nies that have achieved suc­cess by fol­low­ing an estab­lished set of process­es, met­rics, and mod­els. In the board­rooms of such organ­i­sa­tions, dig­i­tal change may seem unnec­es­sary at first. As indus­try dis­rup­tors make the need for dig­i­tal change more obvi­ous, the com­plex­i­ty of trans­for­ma­tion is often intim­i­dat­ing, hold­ing many organ­i­sa­tions back from tak­ing the first steps, until stake­hold­ers and cus­tomers begin to vocal­ly insist upon it.

For­tu­nate­ly, some com­pa­nies are led by for­ward-think­ing exec­u­tives, who recog­nise the need to reach and retain audi­ences with more per­son­alised mar­ket­ing, and delight them with tai­lored user expe­ri­ences. Efforts toward these goals often serve as the first ten­ta­tive steps from “Busi­ness as Usu­al” to “Present and Active” in dig­i­tal transformation.

For exam­ple, UK gam­ing com­pa­ny Sky­Bet recent­ly faced the chal­lenge of retain­ing and attract­ing cus­tomers in the high­ly com­pet­i­tive social media land­scape, where the company’s posts were gen­er­at­ing less-than-ide­al engage­ment. To sharp­en the impact of its social out­reach, Sky­Bet lever­aged social ana­lyt­ics to iden­ti­fy and cat­e­gorise social posts that are most effec­tive at dri­ving likes, shares, click-throughs, and new cus­tomer reg­is­tra­tions. The result was a sig­nif­i­cant jump in click-through rates, low­er­ing the cost per cus­tomer acqui­si­tion and cre­at­ing an aver­age 240 to 280 per­cent return on invest­ment (ROI) in new social campaigns.

Steps toward centralisation

Along sim­i­lar lines, when Sony PlaySta­tion was strug­gling to improve social engage­ment and con­ver­sion rates, the com­pa­ny con­sol­i­dat­ed and stan­dard­ised data col­lec­tion across all social net­works, then used those data ana­lyt­ics to gen­er­ate best prac­tices for a world­wide team of social media man­agers. With these sharp­er insights into cus­tomer behav­iours and pref­er­ences across social and online chan­nels, PlaySta­tion launched a 20-hour social chan­nel takeover on Face­book and Twit­ter, mea­sur­ing cus­tom key per­for­mance indi­ca­tors (KPIs) and pro­mot­ing viral posts along the way. This cen­tralised ana­lyt­ics-based approach proved so effec­tive at dri­ving con­ver­sion rate opti­mi­sa­tion (CRO) that PlaySta­tion now uses it for every new social campaign.

Swiss Inter­na­tion­al Air Lines, the nation­al air­line of Switzer­land, pro­vides a third exam­ple of a com­pa­ny tak­ing first steps toward “Present and Active” dig­i­tal trans­for­ma­tion, in the form of a new approach to con­tent cura­tion and app expe­ri­ence man­age­ment. Fac­ing an increase in mobile-first cus­tomers, the com­pa­ny turned to a dig­i­tal pub­lish­ing solu­tion that enabled their dig­i­tal mar­keters to curate and cat­e­gorise mag­a­zine arti­cles, then quick­ly sur­face that con­tent with­in the brand­ed mobile appli­ca­tion, ensur­ing that each launch of the app would pro­vide a fresh, dynam­ic user expe­ri­ence. Cus­tomer engage­ment rose almost instant­ly, cre­at­ing oppor­tu­ni­ties to inte­grate adver­tis­ing con­tent and oth­er rev­enue dri­vers into the app experience.

In all these cas­es, suc­cess­ful com­pa­nies with estab­lished “Busi­ness as Usu­al” track records recog­nised the need for dig­i­tal transformation—at least in the areas of social media and user expe­ri­ence. Curi­ous where your com­pa­ny stands on the path to dig­i­tal trans­for­ma­tion? Take Adobe’s Dig­i­tal Mar­ket­ing Matu­ri­ty Self-Assess­ment Tool for a spin. You may be sur­prised what you dis­cov­er about your organisation.

In the next arti­cle of this series, we’ll be look­ing at how com­pa­nies can cap­i­talise on the momen­tum that these iso­lat­ed efforts cre­ate, to move in to “For­malised” stage—and how these com­pa­nies have begun to exper­i­ment with dig­i­tal trans­for­ma­tion in direct­ed, inten­tion­al ways. See you there!