5 Change Management Strategies for Digital Transformation (2024)

Change management is one of the most important strategies for ensuring successful transformation; probably one of the reasons the CIO position is now one of the most coveted and compensated roles in business today.

Companies operating in the modern business landscape are increasingly finding themselves managing more than just employees, customers, and products.

They’re also managing the introduction of new technologies, the sudden appearances of new market opportunities and shifts in the way consumers choose, interact with, and apply standards to their brands.

In short, modern businesses must manage change. To do so, they need to change their management strategies.

Yet, as with any drastic upheaval in an organization, formulating a structured change management plan can be difficult.

Employees may be reluctant to “try new things.” It can be tough to secure a budget as decision makers may not see the need to update processes which seem like they’re working. And even if they do, getting the right people involved to the extent they need to be can be a challenge in itself.

The ability to address and adapt to change within an organization is becoming a critical element of survival for many modern businesses in the current digital transformation landscape.

Is your company preparing to undertake change, or struggling to manage it? Read on to learn how change management has evolved, and what you can do to help create a viable, successful strategy.

5 Change Management Strategies for Digital Transformation (1)

The Goals of Change Management

Unlike project management—where it’s easy to point to schedules, tangible objectives, and specific outcomes—change management follows a more reactive and indefinite route.

What change management looks like may vary from organization to organization, but all strategies will share three primary goals:

  • To improve the ROI of the workforce.All changes, particularly those associated withdigital transformation, should be installed to improve the efficiency and productivity of your workforce. Whether it’s the technology to better communicate between departments or the tools to carry out skilled design work effectively, every change should help your employees do their work better and faster.
  • To create a competitive advantage.Companies evolve to get better at what they do. By giving the process of change a structure, change management helps companies spot opportunities to gain a competitive advantage through reduced costs, specialization, innovation, or increased quality of service.
  • Energize and empower employees.Research estimates that some70%of change initiatives fail due to a lack of support from employees. Change can be intimidating, especially when users have done things a certain way for a long time, or they fear that changes may lead to a loss of income. Change management helps make sure employees feel recognized and supported, thereby empowering them to support change initiatives.

Current Problems of Change Management In Digital Transformation

As we mentioned, making big changes to existing business processes is often a long journey and not easy, particularly when making necessary upheavals to business components that have been in place for many years.

A Harvey Nash/KPMG CIO Survey points out that only 41% of companies have an enterprise wide digital strategy, and only 18% of companies rate their use of digital technology as “very effective.”

Failure in digital transformation projects almost always comes down to a lack of preparation and strategy.

Clear communication; objectives and consistent reporting of progress; staying in budget—all of these are crucial to see an initiative through from start to finish.

Businesses that find themselves disappointed in the results of their digital projects often lack direction in these key areas.

One of the reasons businesses are more frequently using MSPs is for this precise reason—outsourcing the strategy and implementation to a third party that has demonstrated expertise over a number of years in similar projects is appealing to businesses looking to transform.

Having a water-tight change management strategy should be an organization’s top priority when embarking on adopting and implementing new technology.

So, without further ado, let’s jump into the most important aspects that make up a great overall change management strategy.

5 Change Management Strategies for SMBs

Change management strategies are critical to the success of any change initiative in a company, whether it’s a specific, targeted transition within a department or significant digital transformation across the organization. Here are five best practices for your change management steps within small and medium businesses:

1. Start from the top

Changes which affect the fundamental operation of the business will affect the company’s culture. Therefore, such changes must start from the C-suite.

The role of leadership during periods of change is well documented in management research. For example, research aroundleadership during mergershas found that when leaders took a more active role in change management, the merger process itself produced a more positive work environment.

The leader’s presence, guidance, and support signaled to their employees that they knew about and supported what was happening. It allayed fears, reduced anxiety, and helped employees feel more confident about the future.

Change which starts at the top reflects a committed, invested, unified leadership that’s on the same page about the future of the company. It’s the only way you will be able to elicit andpromote the culture neededto encourage the rest of the company to embrace change.

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2. Make sure the change is necessary and desirable

Introducing too much too soon can often be a huge problem down the line if a business doesn’t have a solid strategy in place.

It’s no secret that many digital transformation efforts end in failure or fail to meet expectations, often toa concerning degree.

One of the primary reasons for this is that decision makers are unsure of how to correctly approach a digital transformation and the impact it will have on their business.

A lack of a comprehensive audit can lead to the implementation of solutions which are unnecessary for an organization’s needs, meaning added costs, additional training, and increased—often unrealistic—expectations

Related Post: Managed Service Providers: What to Look for in a Partnership

It is all the more pertinent for SMBs that are pursing digital transformation to be conscious of the effects that the introduction of new solutions will have on the company.

Will the proposed solutions be an overall benefit to the operational capacity of the organization, accounting for staff onboarding and familiarity issues? And this leads us to the next point.

3. Minimize disruption

What employees feel is necessary or desirable change may vary from department, level, or performance record. The main indicator? How much a change disrupts their daily role.

As many executives will know, having to change existing processes within an organization can be a headache. Mitigating the effects of changes on employees is vital.

All too often, employee anxiety around change stems from the introduction of new strategies or technologies designed to make management and business operations more efficient.

For instance, whereas leadership may see the introduction of automation into core business functions as a way to save time and money, employees who were previously tasked with these roles may feel replaced, threatened with obsolescence, or lacking a direction.

In addition, organizational restructuring may cause employees who are moved to another position to feel indignant, confused, or wondering what was wrong with the previous structure.

The result in both cases is lower morale, more unsatisfactory performance, and a brain drain as your best performers flee. Therefore, disruption among the workforce can be minimized by:

  • Planning for some disruption and getting the word out early.
  • Providing employees with the training and resources to adapt to changes.
  • Fostering aculture which supports changeor transformation.
  • Empowering champions such as project managers or team leaders to provide clarity and context for changes.
  • Making sure yourIT department is in the loopand ready to support technological or infrastructural changes.

4. Promote communication

We’ve alluded to the need for proper communication during organizational change, as it seems to be one of the underlying factors which determine the success or failure of a transition or transformation.

Excellent communication keeps everyone on the same page and assures the people who will feel the brunt of these changes that they’re not in any danger.

Talking about change candidly and openly is one of the most powerful things you can do to help your company embrace change.

MIT conducted a studyon the effects of communication by leadership to employees during digital transformation. While 93% of employees supported digital transformation once it was discussed, only about 36% of CEOs communicated their vision sufficiently to their organization’s employees.

Likewise, encourage communication not just from leadership to employee, but also from employee to leadership.

Create channels for employees to reach out with questions or concerns. Support cross-department communicationto help ideas and innovation spread as new processes take hold. Like your vision, communication drives efficiency and has the potential to shape culture.

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5. Recognize that change is the norm, not the exception

Are you treating change as a project with a defined beginning and ending? You may run into difficulties because change is not a project but rather an ongoing process.

Today’s world moves exceptionally fast—technology, markets, consumer preferences, even environmental conditions are all rising and dissipating in the blink of an eye.

Businesses not only need totransform their operations to be able to keep pace with their customers. They need to anticipate change and be ready for itwhenit occurs.

Harvard Business Review defines change readiness as “the ability to continuously initiate and respond to change in ways that create advantage, minimize risk, and sustain performance.”

Sound familiar? That’s nothing less than the goals of change management outlined earlier. You can only be change ready if you recognize that change is the norm, not the exception to the rule.

Bottom Line

  • Organizations are unique—change affects them in different ways. Change management strategies will look different across a constellation of organizations.
  • Successful change—whether large or small—requires a committed, active leadership which fosters good communication, a culture of learning, and a clear vision of what that change entails.
  • Change is an inevitable,vital element of running a business in today’s world. However, by embracing change readiness, businesses can turn change into an opportunity rather than a challenge.
  • All change brings some disruption to the workplace, but you canmitigate harmful disruptionwhile allowing it to breathe innovation into your operations.

Advanced technology solutions help companies achieve and maintain a competitive advantage in their industry. Through leveraging the tools available, you can increase staff productivity and decrease costs—your business can enjoy higher operating capacity and deliver a superior customer experience.

For more information about how tech solutions can help your SMB, download our free eBook,“Fast-Tracking Your Digital Transformation,” featuring information on data backup and business continuity, document workflow solutions, cybersecurity, and more.

5 Change Management Strategies for Digital Transformation (2024)

FAQs

What are the five effective change management strategies? ›

5 Steps in the Change Management Process
  • Prepare the Organization for Change. ...
  • Craft a Vision and Plan for Change. ...
  • Implement the Changes. ...
  • Embed Changes Within Company Culture and Practices. ...
  • Review Progress and Analyze Results.
19 Mar 2020

What are the 5 domains of digital transformation? ›

Customers, Competition, Data, Innovation, Value.

What are the top 5 challenges or opportunities that digital transformation can help with in your business? ›

9 Top Digital Transformation Challenges Impacting Businesses in 2022
  • Lack of Change Management Strategy. ...
  • Complex Software & Technology. ...
  • Driving Adoption of New Tools & Processes. ...
  • Continuous Evolution of Customer Needs. ...
  • Lack of a Digital Transformation Strategy. ...
  • Lack of Proper IT Skills. ...
  • Security Concerns. ...
  • Budget Constraints.
2 Dec 2021

What are change management strategies? ›

A change management strategy is a plan for how to make something different. In business, a change management strategy describes specific ways in which an organization will address such things as changes in the supply chain, inventory requirements, scheduling or project scope.

What are types of change management strategies? ›

Within directed change there are three different types of change management: developmental, transitional, and transformational.

What is a digital transformation strategy? ›

A digital transformation strategy is the approach to remodeling the enterprise to incorporate digital technology across appropriate facets to achieve everything from greater efficiencies and collaboration to improving delivery speed and customer satisfaction.

What is digital transformation examples? ›

Some digital transformation examples include implementing tangible, customer-centric digital tools like mobile applications or websites that improve the customer journey. And others involve machine learning algorithms that transform a traditional business into a digital business.

What are the five domains of DX for each How do digital technologies transform the business model and business process es? ›

He stated five vital domains of digital transformation plan which is: customer, competition, data, innovation, and value. Even though these essentials are well-defined, the transformation isn't simple.

What is a domain transformation? ›

Domain. Domain transformations occur when one business is able to slide into another area successfully. Amazon, for example, added its own streaming platform (Amazon Prime), as well as Amazon Web Services (AWS), which is now the largest cloud computing/infrastructure service.

What are the five biggest challenges that companies face when adopting a digital strategy? ›

Biggest Barriers To Digital Transformation and How to Overcome Them
  • Employee Pushback.
  • Lack of Expertise to Lead Digitization Initiatives.
  • Organizational Structure.
  • Lack of Overall Digitization Strategy.
  • Limited Budget.
4 days ago

How do you measure the success of a digital transformation? ›

10 KPIs to Measure Digital Transformation Success
  1. Return on Digital Investments. ...
  2. Employee Productivity. ...
  3. Adoption & Performance Metrics. ...
  4. Customer Experience Metrics. ...
  5. Percentage of AI-Enabled Business. ...
  6. Reliability & Availability. ...
  7. Cost-Benefit Analysis. ...
  8. Revenue from Digital Technology.
5 May 2022

Why are change management strategies important? ›

Developing a change management strategy provides direction and purpose for all other change management activities. By outlining the unique characteristics of the change and its risks and potential resistance, change practitioners set themselves and their project team partners up for success.

What is a strategic change model? ›

Strategic change is characterized as a complex change including four independent but each other interconnected areas: technical, organizational, methodical and social changes. The model represents a methodology for process of change.

What are the 5 types of changes? ›

However, one can't prepare without knowing what type of change is occurring.
...
The 5 Types of Organizational Change
  • Organization Wide Change. ...
  • Transformational Change. ...
  • Personnel Change. ...
  • Unplanned Change. ...
  • Remedial Change.
4 Sept 2022

What are the four types of change management? ›

4 Change Management Principles
  • Understand Change.
  • Plan Change.
  • Implement Change.
  • Communicate Change.

Why is digital transformation strategy important? ›

Digital transformation puts technology at the core of business strategy. This approach can reduce operating expenses and inefficiency. It could even change the course of your business. With a unified model across business and technology, it's easier to achieve future ambitions.

What are the key elements of a digital strategy? ›

Key components of a digital strategy
  • Online presence. Your online presence refers to how and where the community and other businesses see your business online. ...
  • Digital marketing and advertising. ...
  • Selling online. ...
  • Digital communications. ...
  • Cyber security. ...
  • Supplier interaction. ...
  • Digital solutions for efficiency. ...
  • Cloud computing.
11 May 2022

What are the 3 key elements of digital transformation? ›

Executives are digitally transforming three key areas of their enterprises: customer experience, operational processes and business models. And each of these three pillars has three different elements that are changing. These nine elements form a set of building blocks for digital transformation.

What are the 3 approaches of digital transformation? ›

Types of Digital Transformation
  • Process Transformation. Companies can revise internal processes to lower costs, improve quality and reduce cycle times. ...
  • Business Model Transformation. ...
  • Domain Transformation. ...
  • Cultural/Organizational Transformation.
20 Jan 2022

Where does change management play a major role? ›

Answer: Data culture and literacy is True answer.

What could we do to better prepare your colleagues for digital transformation in our company? ›

12 Tips to Prepare Your Employees for Digital Transformation
  1. Close the skill gap (reskill and upskill) ...
  2. Revisit your company culture. ...
  3. Consider appointing a Chief Innovation Officer (CIO) ...
  4. Communicate the benefits of DX to eliminate fear. ...
  5. Align employees with your business goals. ...
  6. Bring your Internal Communications on board.

What is the difference between a traditional manager and a current manager? ›

Comparing Traditional and Modern Management models

Stability: Traditional organizations usually are stable in business activities and progress, while modern organizations are more dynamic with multiple business strategy, which need multiple process to deal with constant changes.

What is the best example of digital transformation? ›

A great example of digital transformation is UPS. The American shipping and supply chain management company used digital tools to synchronize its operations and logistics strategy to better meet customer demand.

What are the key trends in digital transformation in 2022? ›

Distributed cloud will be an emerging digital transformation trend in 2022 as more and more businesses move to the cloud. The distributed cloud gives businesses the power to connect data and applications across multiple locations, allowing for faster innovation and better resiliency.

What are the benefits of digital transformation? ›

The Benefits of Digital Transformation
  • Increases Customer Satisfaction. ...
  • Drives Data-Based Insights. ...
  • Enables Software Monetization. ...
  • Enables High-Quality User Experience. ...
  • Encourages Collaboration & Improves Communication. ...
  • Increases Agility. ...
  • Limits Human Error. ...
  • Encourages an Environment of Employee Excellence.

What are the five elements of digital information technologies? ›

5 Components of Information Systems
  • Computer hardware. This is the physical technology that works with information. ...
  • Computer software. The hardware needs to know what to do, and that is the role of software. ...
  • Telecommunications. ...
  • Databases and data warehouses. ...
  • Human resources and procedures.

What are the different types of digital transformation? ›

There are four different types of digital transformation, including process transformation, business model transformation, domain transformation, and cultural/organizational transformation.

How do you make a transformation plan? ›

10 Steps for Successfully Creating Digital Transformation Plan
  1. Be Clear with Your Purpose. ...
  2. Set your vision and mission. ...
  3. Understand and Identify the Needs of your Customers. ...
  4. Include the right leaders. ...
  5. Give culture a focus. ...
  6. Include gathering expertise and resource to your plan. ...
  7. Select the most suitable technology.
4 Aug 2021

What is a digital transformation roadmap? ›

A Digital Transformation Roadmap is a set of steps that organizations can follow to achieve short-term and long-term business goals with the use of digital technology. The roadmap begins by understanding business needs and finding gaps in the existing system to build a strategy that avoids these gaps.

What are the 4 types of digital business models? ›

Different kinds of digital business models
  • Free-Model (Ad-supported Model) ...
  • Freemium Model. ...
  • On-Demand Model. ...
  • E-Commerce Model. ...
  • Marketplace Model (Peer-to-peer, two-sided marketplace) ...
  • Ecosystem Model. ...
  • Access-Over-Ownership Model / Sharing Model. ...
  • Experience Model.
20 Apr 2021

What are the largest barriers to digital transformation? ›

The inability to experiment quickly is the biggest barrier to digital transformation. This is greatly linked to companies' reluctance to part ways with the way they have been doing things for years. Suddenly changing lanes seems like a huge risk that most businesses aren't willing to take.

What is the most important transformation phase? ›

The most important moment in a digital transformation is at the very start, where decision making is nimble and it's easiest to affect valuable change.

What are the key challenges associated with digital transformation? ›

A Lack of Organizational Change Management

Outdated organizational structures, inefficient workflows, and rigid leadership styles can all impede digital transformation success. This was never more apparent than in 2020 when companies struggled to quickly shift to a remote business model.

What are the top 5 challenges or opportunities that digital transformation can help with in your business? ›

9 Top Digital Transformation Challenges Impacting Businesses in 2022
  • Lack of Change Management Strategy. ...
  • Complex Software & Technology. ...
  • Driving Adoption of New Tools & Processes. ...
  • Continuous Evolution of Customer Needs. ...
  • Lack of a Digital Transformation Strategy. ...
  • Lack of Proper IT Skills. ...
  • Security Concerns. ...
  • Budget Constraints.
2 Dec 2021

What are the five 5 biggest challenges for online business? ›

Five Of The Biggest Challenges Facing Online Marketing
  • 1) Social Media Management. ...
  • 2) Getting Value From SEO. ...
  • 3) Multi-Device Usage. ...
  • 4) Optimizing The Mobile Experience. ...
  • 5) Competing With The Noise. ...
  • BONUS ROUND [Nov. ...
  • 6) Proving ROI of Marketing Activities. ...
  • 7) Managing Our Website.
30 Jan 2014

How can we overcome technology challenges? ›

Here's what they suggest:
  1. Step 1: Innovate with the Tools You Already Have. ...
  2. Step 2: Seek Out Free, Easy-to-Use Digital Resources. ...
  3. Step 3: Overcome Your Fear of the Unknown. ...
  4. Step 4: Start with Small, Fast Projects That Enhance Learning. ...
  5. Step 5: Learn with Your Students.
6 Aug 2008

What is a digital transformation strategy? ›

A digital transformation strategy is the approach to remodeling the enterprise to incorporate digital technology across appropriate facets to achieve everything from greater efficiencies and collaboration to improving delivery speed and customer satisfaction.

What is KPI in digital transformation? ›

Digital Transformation KPIs are indicators of the progress towards achieving DX goals. This way, businesses can track how their activity affects the digitization processes.

How is impact of digitalization measured? ›

There are two ways to measure the impact of digital transformation: through metrics and by the qualitative analysis of your business. These metrics can include customer satisfaction scores, revenue growth and retention, and employee productivity.

What are the key elements in successful change management? ›

5 Key Elements of Change Management
  • Smooth Approval Processes. Approval status issues play a key role in ensuring smooth change operations. ...
  • Process Automation. ...
  • Governance Tools. ...
  • Data Access. ...
  • CAB Functionality.
17 Nov 2014

What are the components of an effective change management program? ›

Typically, there are six components of Change Management: Leadership Alignment, Stakeholder Engagement, Communication, Change Impact and Readiness, Training, and Organisation Design.

What are the 4 major components of organizational change? ›

For successful change implementation in organizations, there are 4 main components serving as pillars holding up the change. These pillars are various distinct phases of change – planning, leadership, management, and maintenance of change.

What are 4 things key to change management? ›

Successful change management relies on four core principles:
  • Understand Change.
  • Plan Change.
  • Implement Change.
  • Communicate Change.

What are the five essential ingredients for successful change? ›

Once you have key stakeholders onboard, there are five essential ingredients you need for successful organizational change. If one of them is missing change can still happen, but it will have negative consequences. The five ingredients are vision, skills, incentives, resources, and an action plan.

What is positive change management? ›

Positive change management implies a few things: Positive feelings and emotions about the transition. A program that is proactive, intentional, and directed. A change project that is successful.

How do you implement a change management plan? ›

Follow these six steps to developing a change management plan to ensure a smooth organizational transition.
...
Follow these six steps for developing your change management plan.
  1. Step 1: Build your team. ...
  2. Step 2: Set goals. ...
  3. Step 3: Create a plan. ...
  4. Step 4: Do the work. ...
  5. Step 5: Support the change.
13 Apr 2022

What is change management process flow? ›

The Change Management process is designed to help control the life cycle of strategic, tactical, and operational changes to IT services through standardized procedures. The goal of Change Management is to control risk and minimize disruption to associated IT services and business operations.

What are the 4 types of change? ›

Not all change is the same.
...
The Four Kinds of Change
  • Mission Changes. ...
  • Strategic Changes. ...
  • Operational Changes. ...
  • Technological Changes.
6 Aug 2020

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