Digital Transformation Strategy


A digital transformation strategy is a detailed plan including the objectives, steps, and measures of a company’s digital transformation efforts. As companies grapple with modern challenges and competition intensifies, the digital workplace has become useful in more ways than one.

However, without proper implementation, digital transformation can create more problems than it solves, in addition to being a money-drain for the company. That is why it’s important to have a solid plan of action to guide you so that the changes are made consciously and intelligently.

Whether you’re pondering on the decision or trying to course-correct after making some mistakes, read on to get a better understanding of digital transformation strategy, including how to develop one and the challenges you can expect to deal with.

What is a digital transformation strategy?

Digital transformation can mean different things to companies across different industries, i.e., the specific ways in which they are affected by the change. In some cases, digital transformation has meant more efficiency at work, greater camaraderie, better customer service, or more time with the family.

This influences the employee’s expectations and eventual satisfaction with the shift. A digital transformation strategy allows you to take these into account. For instance, an improved corporate communications system could allow a hybrid workforce where employees work at the premises and remotely.

A strategy gives you a chance to create space for such flexibility. It also allows you to know the limits. For instance, while desked workers may enjoy a hybrid work environment, deskless workers in manufacturing or frontline staff in health will not expect the benefits of digital transformation to come in that form.

To create a successful digital transformation strategy, you must zero in further and view it at the company level. Companies in the same market have unique needs, and to gain a competitive edge they must be innovative.

Digital transformation tips

Create a custom digital transformation strategy that takes advantage of your company strengths and bolsters your company culture. The following five tips can help make sure of that:

  • Ensure that the company vision guides the objectives of the strategy.
  • Choose technology offering capabilities that align with the company’s needs and values.
  • Develop strategy this will be built around, or at least support, employee experience management.
  • Select value metrics to help you measure the success of the strategy effectively.
  • Set up a digital transformation governance team to guide the strategy and be accountable for its success while involving everyone in its implementation.

Companies across the globe are putting their weight behind digital transformation, with global investment expected to increase from $1.8 trillion in 2022 to $2.8 trillion in 2025, according to Statista. Another report attributes the driving force for the shift to market pressure as 51 percent of the efforts respond to growth opportunities while 41 percent are spurred by increased competitiveness. Companies also respond to new regulations.

Thus, the digital transformation strategy should be treated as an urgent issue that needs to be handled sooner rather than later. All departments including Internal Communications, IT, Finance, and HR should be actively involved in the process, with the heads of each being part of the digital transformation governance team.

Five employees in a board room discussing their company's digital transformation strategy

Why is a digital transformation strategy important?

As more companies adopt advanced methods, one of the crucial elements of success is having a clear and focused digital transformation strategy. Without one, you risk losing ground to the competition as your shift stalls. A successful digital transformation strategy will:

1. Provide a sense of direction to the company

Generally, employees want to know where the company is headed before they commit themselves to the journey. This is as true to potential hires as it is for existing employees. Potential hires want to join companies that give them as much as they take, and the existing staff will adopt new changes with energy and enthusiasm if they understand the goals.

2. Prioritize and align efforts

Developing a strategy is about making the right choices, establishing priorities, and allocating limited business resources for maximum output. There are important decisions to be made throughout the process, from which technology vendors to use to identifying and filling skills gaps.

Setting priorities can help the company develop realistic expectations and focus efforts for better chances of success. Finally, the strategy ensures proper utilization of resources to prevent overspending in some areas at the expense of others.

3. Define responsibilities and determine accountability

Defining responsibilities helps you not only find the right people to lead the digital transformation efforts but also improve the employee experience. A digital transformation strategy allows you to understand the responsibilities before assigning people. Additionally, leaders will be more confident stepping into a role that has a clear purpose for the company.

With well-defined responsibility, you can create accountability to motivate leaders and reward good performance with proper employee recognition.

4. Enhance employee engagement throughout the implementation

Employee buy-in is crucial to the successful implementation of the digital transformation strategy. Thankfully, simply by having one, you can significantly improve employee engagement. They are more willing to adopt new ways and tools, and they provide feedback on the system’s effectiveness.

5. Provide a framework for ongoing evaluation and decision-making

Since having a strategy means that all efforts should support it, the digital transformation strategy is a reference point for decision-making and performance measurement. Proposals, new ideas, and innovations can be vetted easily through the criteria established in the strategy.

Employees in front of a white board discussing their company's digital transformation strategy

Benefits of a digital transformation strategy

A digital transformation strategy benefits the company from its creation to its implementation and evaluation. The process itself can reveal opportunities you didn’t know existed and draw your attention to significant risks amid rapid changes. The strategy keeps you focused on the goals and agile as unforeseen situations arise.

1. Improved efficiency and productivity

Two of the main benefits of having a digital transformation strategy are: It optimizes the use of resources and improves the output of individuals.

If you’re installing an intranet, for instance, the planning stage draws your attention to the different approaches you can take between IT-configured and platform-based options. At the same time, it allows you to decide if you want to reassign some of your staff to the platform’s maintenance or have a vendor who takes care of the technical aspects.

2. Enhanced customer experience

Customer expectations are high and rising. Customers want personalized experiences and products tailored to their unique needs. They also demand speed and convenience. A digital transformation strategy will take this into account and plan for solutions that are not only designed to improve business operations but also the employee experience, the purchasing journey, and customer satisfaction.

3. Increased revenue and profitability

Digital processes help companies reduce human error and inefficiencies, such as wrong inputs and time-consuming manual processes. Additionally, gathering and analyzing data at scale enhances operations through data-driven decision-making. Developing a digital transformation strategy is the first step to creating a system that harnesses these abilities to boost revenue and profitability.

4. Competitive advantage in the market

Most businesses realize that without accelerated digitalization, their current business model will fail within the next few years. Customer needs are changing, and the solutions are evolving to meet new demands; some revenue streams are drying up as others are opening up, and new threats to business are emerging. A digital transformation strategy improves business agility, which is more important than rigid approaches. This creates a competitive advantage in the market.

Why do companies implement a digital transformation strategy?

There are many reasons why companies decide to implement a digital transformation strategy.

1. To keep up with customer expectations

The best way to keep up with customer expectations is to stay one step ahead. Advanced tools and processes allow them to see the other side of the moon, i.e., what drives customer behaviors and expectations. This not only tells them why customers want certain things now but also explains impending shifts.

2. To attract and retain talent

Closely tied to digital transformation is the employee experience strategy. Talented employees are looking for opportunities with companies that prioritize their daily experience. A digital transformation strategy serves as an advertisement and pitch to potential hires. Similarly, employee retention depends on the company’s ability to keep growing – this signals the employee that there is room for professional growth.

3. To mitigate business risks

A low level of digitalization is not only inefficient, but it can also be risky to the business and individuals. For instance, in Manufacturing, delaying the implementation of certain digital processes could endanger workers, leading to lawsuits. A digital transformation strategy improves employee experience management with better communication and collaboration. This protects against several potential risks, including disengagement, stagnation, and attrition.

Steps involved in developing a digital transformation strategy

Developing a digital transformation strategy is a challenging task. A level of discomfort with change is natural for business leaders and employees. But if unchecked, this discomfort could develop into uncertainty, fear, and outright opposition. 

According to one report by Zippia, only 7% of companies have fully implemented a digital transformation strategy, 18% are in execution, while 28% are in the development stage. 

Don’t let uncertainty stall your digital transformation strategy. Follow these steps to develop the right strategy for your business:

1. Identifying the objectives and goals

Since the digital transformation strategy should be based on your company’s unique needs, the first step should be identifying the objectives and goals. That said, these and similar questions can help you chart a path to successful implementation:

  • How will it improve the employee experience?
  • How will business operations be improved?
  • How will it make the company more prepared for constant changes?

2. Assessing current systems and processes

While in some cases, digital “transformation” could mean a complete overhaul of the business, it’s usually more about improving current systems and processes rather than replacing them. To be sure what needs replacing, repairing, and updating, conduct a detailed assessment of the current work environment.

3. Defining the scope of the transformation

Still stressing the importance of developing a unique digital transformation strategy, this step is about selecting the target areas for the process. You can divide your company into four main areas and develop a strategy that addresses all, namely: Business process, business model, culture, and domain transformation. Some companies may start with certain aspects and gradually transform the rest.

4. Creating a roadmap and timeline

Once you understand the scope of the digital transformation strategy, create a roadmap and timeline for the project completion. The roadmap details the specific tasks, milestones, and expected timeline.

This gives your company a visual representation of the big picture and familiarizes people with their responsibilities. It can also include information on risks, challenges, and resource management. It is also used to keep stakeholders updated on the progress.

5. Identifying the resources needed

The next step is to identify the resources needed for the successful implementation of the digital transformation strategy. Primarily, you will need a team of leaders from various departments to decide on other necessary resources and where to get them. A strong digital transformation governance team will ensure that other resources are gathered and allocated appropriately.

6. Defining the metrics and KPIs for measuring success

Ultimately, you will want to determine the success of your efforts. Thus, your digital transformation strategy should include metrics and KPIs for measuring success. In deciding which indicators to track, keep these tips in mind:

  • Choose metrics that can be easily understood by the relevant audience.
  • Ensure that metrics address a specific audience.
  • Interpret metrics in terms of the business outcomes they are designed for.
  • Establish achievable metrics to avoid frustrations.

Challenges of implementing a digital transformation strategy

Implementing a digital transformation isn’t easy. Companies face many challenges in the process, including:

1. Resistance to change

Employees and leaders may be unwilling to change their “business as usual” model, especially if they think it is working. Developing the strategy can help fight the resistance as more people understand the purpose.

2. Budget constraints

Companies don’t always have the resources to implement a digital transformation strategy. However, this is not an excuse to avoid or postpone the exercise. Part of the reason to develop a plan before investing is to find ways to navigate budget constraints.

3. Lack of technical expertise

Digital systems require ongoing technical maintenance, which many companies may not be able to afford on top of their regular IT staff. This can be solved by procuring from reputable vendors who offer technical support after installing the system.

4. Data privacy and security concerns

The vulnerability of digital systems to cyber-attacks can deter employees from using them or leaders from implementing it. The security of your system will largely depend on how it’s built. If you choose to build it internally, be sure to hire IT security experts, and if you buy, be careful to select vendors who provide high levels of security.


Developing a digital transformation strategy can be challenging and time-consuming. But now that you know what it is, you can’t skip or skimp on the process. If you need further guidance from an expert, reach out for a demo of Simpplr’s award-winning modern intranet.