Many IT professionals feel that they are running out of time to start transforming digitally or face financial and competitive suffering. They are right. Without the aid of a time machine, there is no better time than now to affect digital transformation.
With January’s fresh start, companies are jumping into new endeavors, making plans and, of course, setting up budget spending. Digital transformation, as part of your company’s budget planning, is wide-reaching and unpredictable, but by taking the right steps you can make digital transformation, and the associated budget, easier to handle.
Digital transformation, quite simply, is the act of taking analog processes and tools, and transforming them into a digital version of the same. If your company pushes a lot of paper around, for example, switching to online forms, filing and communication saves time and resources, not to mention trees.
Automation is a large part of digital transformation too. It takes much of the mundane, repetitive aspects of running a business and turns this into something that quite literally handles itself.
Digital transformation spans every department of your company, from customer service representatives relying on social media communication with customers and cloud-based help desk software to using cloud recovery in your disaster planning versus on-site hard copy backups.
In a 2016 report, 41 per cent of business leaders surveyed said they had seen an increase in market share due to digital transformation, and 37 per cent saw a positive impact on employee morale. With a full digital transformation taking place in your company, you will see those benefits and more.
Innovation, increased access to assets and resources–and less burden on physical resources lead to cost savings–and a better experience for everyone; your employees, your business partners and your customers. That’s why it is well worth investing in this area, with a digital transformation budget.
When planning a digital transformation budget for the next year and beyond, there is one important thing to keep in mind through every decision: digital transformation is a mindset, not a process.
There is no set checklist, or specific steps to take, that will take every company from analog to digital in the same way. Rather, if you keep your focus on ensuring that digital technology is integrated into every part of your business in a sustainable, suitable way, you should find that the task is less daunting.
Knowing that your mindset is what will lead you to success, there is an approach to planning your digital transformation budget that is key: instead of locking into specific vendors or platforms, make choices that are flexible and future-proof. These will not necessarily be the same choices you’ve made in the past.
Making a few slight changes to your previous budget won’t effect real transformation. When you rework your IT budget for the next year, consider how you can spend your money to promote growth and change, rather than keeping the status quo. To do that, you may need to completely overhaul your budget. Many businesses should.
For true digital transformation, your budget has to move away from the usual approach of funding lucrative projects, or the same old systems and take some chances. Every person involved in and impacted by your budget has to buy into the power of digital transformation, and the idea that it is a mindset not a process.
In a great Forbes article, Peter Bendor-Samuel explains it as such:
“In a traditional initiative structure, the business case focuses on return on investment (ROI). At a minimum, this focus creates an unacceptable drag on the pace of transformation. From this approach, the business case for the journey likely won’t be sustainable because many individual projects won’t have an ROI at the initiative level. But there will be a strong ROI at the portfolio level… Allowing a traditional budget approval and funding structure to impede progress will not achieve the goal and may cause the digital transformation to break down.”
Remember that ROI may not be seen as a money figure, but as customer engagement, new clients, boosted business and other positive signs.
You need to plan for what can’t be planned. It sounds impossible, right? Nonetheless, digital transformation involves elements of the unknown, especially when you are exploring what might or might not work for your company at the start.
Many budgets are focused on process and progress. For the greatest impact, your digital transformation budget needs to be set up in a manner that allows you to pull funding from a failed project, or add more to something with potential.
You can build flexibility into your digital transformation budget by focusing on a few smaller projects that can shift and change as you further understand how digital technologies and processes will fit into your business.
Instead of funneling all of your money into one overarching digital transformation strategy, work at it from a more piecemeal perspective for effective transformation without tying up all of your capital at once. You may need to create several budget plans for various scenarios, but it is worth it to get closer to full digital transformation.
Consider planning for a discovery phase, providing a smaller amount of funding to the start of a digital transformation project. This can help with executive buy-in, show how digital transformation works, and how it can positively impact your business. Ultimately, it can lead to a stronger commitment to digital transformation.
Cloudhelix consulting services help make your digital transformation as smooth and innovative as possible. When you are setting up your IT budget for the next year, invest in expert assistance to make your digital transformation a reality. Contact us today for expert consulting services that will help you take the next steps.