Four tips on how to extract business value from digital transformation

Agne Nainyte
5 min readMar 5, 2021

Would you be surprised if I told you that Coca-Cola has just launched a connected vending machine which can print a label with your name?

I guess not really. Our world has become so digitalized, it’s hard to impress anyone. We take a lot of these technological advancements for granted. Our smartphone, for instance, is becoming like your good old multipurpose army knife today, doing so many tricks and integrating so many services. Just imagine a day without it!

But imagine if you were working for a company which is not ‘digital born,’ implying dinosaur-like, bureaucratic and conservative processes. Now all of a sudden you feel a tsunami coming your way — as customers, consumers, employees and shareholders alike demand a digital experience in all areas of business.

That said, the prospect of digital transformation is not new to legacy companies anymore since most organizations are in the midst of a certain amount of transformation. The question which still arises is — how do we extract business value from digital transformation?

I am constantly thinking and analyzing — how can companies be successful in this digital playground?

What is digital transformation?

While digital transformation is a common buzzword these days, it can mean different things to different people. For me, it’s all about how companies reinvent themselves by using digital technologies. I would look at three areas:

1. Process excellence. It’s all about how you redesign your business processes by using new technologies such as edge computing robotics, big data, augmented reality or additive manufacturing.

2. Building digital value propositions. This is about developing new products or services by using new technologies.

3. Creating IT excellence. This relates to building an IT infrastructure backbone to support future-proof innovation.

In the end, digital transformation is all about creating value by reinventing your business processes.

Value is a subjective assessment. It means different things to different stakeholders.

How to extract business value?

Although digital transformation is such hype, do you know that 84% of those initiatives fail? Imagine the financial and human resources wasted! So, what can we learn from those who successfully reap business benefits from digital transformation?

1. Start with a business problem. This is very, very, very important. Instead of ‘creatively’ thinking where and how you could deploy cool technologies in your business, first identify your biggest pain points.

For example, imagine you are a logistics service provider who notices that customer satisfaction has been deteriorating over the last few quarters. Your root cause analysis shows that the service lacks transparency about customers’ shipment status. When customer service is called, customers are often kept waiting for at least 30 minutes.

You thought about how digital technologies could help you in reducing customer waiting time. An initiative was launched to start using a chatbot function from common questions to reduce the agents’ workload.

A quantified business problem is one of the best inspiration sources where to start your digital initiative.

2. Quantify your business problem. What gets measured, gets managed! Don’t forget to capture your business problem in a quantified manner. This allows you to take a baseline before you implement a digital solution, and measure effectiveness after it’s implemented.

For example, your quantified problem statement could sound something like this. Over the last three quarters, our customers were increasingly experiencing an average of 30 minutes waiting time when calling our customer service, whereas our target is 10 minutes maximum. This creates a gap of 20 minutes.

3. Continuously improve by monitoring your results. Driving digital projects is never easy, so you will encounter lots of bumps. By measuring benefits over time, you empower your organization to quickly learn and adjust where needed.

For example, let’s say you have launched your chatbot function. After the first month you are happy with the results — customer waiting time reduced to 20 minutes on average. But after another month passes, you see no further improvement. Having this performance data gives you a clear signal to deep dive into your project and identify the goal blockers.

4. Never underestimate the people factor. It’s almost never the case that change is accepted immediately by everyone. The same goes for digital initiatives.

I read many books about digital transformation. All of them highlight the importance of people!

Just try to remember how you reacted when your company announced changed expense claim procedures. Now you needed to read a new manual, try a new system and hope to succeed. While doing it for the first time, you immediately got frustrated because it didn’t work the way you were used to.

The same change process goes for your team members who need to adopt a new digital way of working. Although it’s hard to predict human behavior in different change situations, using a structured change management approach always helps.

The problem often arises when change initiators are too impatient and expect that employees will immediately embrace a new way of working. Unfortunately, that rarely happens. Everyone has their own pace in moving through change curve phases.

In successful digital programs you can see a dedicated effort in recognizing different change phases employees need to go through and action plans on how to address them.

At Schuberg Philis we love starting with a small experiment.

In short, driving digital initiatives is fun, but never easy when it comes to extracting actual business results. There is a lot of pressure on leaders who dare to step-up and drive their organization into this future digital world. It’s still a lot like an unpaved road where many of us are learning to take our first steps.

At Schuberg Philis our experience with several clients is that, when business leaders start with a quantified business problem, measure its progress consistently taking people factors into account, this highly increases the chance and speed of extracting meaningful value to business.

We promise to write more about our customer success stories in the coming months. In the meantime, if you have any questions about how to drive digital transformation within your organization, please get in touch with us!

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Agne Nainyte

Digital Transformation Consultant at Schuberg Philis and blogger at https://nainyte.com/