6 steps to implementing an effective digital transformation strategy

March 29, 2021
Case studies from three industrial companies identify digitalization best practices.

Companies across industry have developed and adopted strategies to enable their digital transformation, some more effectively than others. As advanced technologies become more accessible and widespread, facilitated by decreasing prices and the prevalence and reliability of high-speed internet, businesses have rapidly adapted or have fallen behind.

Those that effectively implement their strategy gain a distinct advantage over the competition; however, businesses often discover a divide between digital transformation strategy formulation and implementation. To help you overcome this particular roadblock, we have examined a research study, “Implementing a Digital Strategy: Learning from the Experience of Three Digital Transformation Projects,” involving three companies that digitally transformed their businesses and successfully renovated their business plans.

Why digital transformation projects fail

Understanding failure is imperative to bring about future success. When it comes to digital transformation projects, failure is not hard to find. Somewhere between 65-percent and 85-percent of attempts fail, leading to substantial loss of time, money, and effort.

Contributing significantly to this high failure rate is the disconnect many businesses experience between their strategy and implementation. While related, these two concepts are separate projects.

Digital strategy formulation

  • Focused on how value can be created and exploited using digital technologies
  • Identifies necessary business model modifications

Digital strategy implementation

  • Translates strategy into an actionable plan
  • Ensures actions are consistent with the predefined objectives

A stellar approach to implementation may correct failures in the formulation, while a lackluster implementation can dismantle even the best-laid formulation.

While there are other reasons for failure – misreading the market, missing the mark when melding technology and product or service, and so on – it is the disconnect between strategy formulation and strategy implementation that is most often to blame.

Learning from a case study: A how-to guide for implementing strategy

The research study by Correani et al. published in 2020 gathered first-hand data from ABB, CNH Industrial, and Vodafone over an average of 12 months. Other data sources were also considered, including interviews with those directly involved in the projects and public information available on websites and in business magazines. These data were then analyzed with an intent to identify what key elements were present in the successful implementation of each strategy.

The researchers constructed a basic framework that companies can use when implementing their transformation strategies. Looking at the three companies—ABB, CNH Industrial, and Vodafone—each is in their own industry (electrical equipment, agricultural equipment, and telecommunications, respectively), and each had different objectives for their digital transformation projects.

From the case study, we can identify a general, step-by-step guide for implementing your digital transformation strategy:

  1. Identify the main objective of the digital transformation project—lay this out specifically to set goals, identify guidelines, and understand what your ideal end result is. In other words, first define your scope.
  2. Begin your digital transformation project by properly managing your data—this is critical for effectively supporting the digital transformation, and will rely on the management of your external and internal data sources to help implement your new strategies.
  3. Create and use an intuitive data platform through which product and all software as a service are generated then pushed to end customers.
  4. Consider a thorough revision of your firm’s operations and business models—new professional managing roles will need to be determined.
  5. A radical change in core capabilities might be necessary, so it’s necessary to establish and grow partnerships with several types of stakeholders to create support.
  6. Employ artificial intelligence to adopt rapid insight and data exploration for your implementation process.


Having a defined scope of the planned transformation is vital to maintaining focus on specific, detailed goals and ensuring continuity throughout the implementation process. In other words, narrowing the scope of your digital transformation strategy is one of the most beneficial steps you can take toward successful implementation.

Clearly define and organize your goals and stay on task to avoid inefficiencies. For example, the three companies included in the case study did just that by narrowing the scope of their goals as follows:

  • ABB: Use software- and platform-enabled services to create continuous value for customers.
  • CNH: Digitalize fleet to develop new services using predictive maintenance and intelligent logistics.
  • Vodafone: Improve customer care through automation.


The driving force behind digital transformation is data, which can be divided into two categories – data sources and data platforms. Properly leveraging both is one of the key elements of a successful transformation framework.

  • Data sources include both external and internal sources. External data sources include consultants, installers, original equipment manufacturers, retailers, and so on. Information from these sources can provide valuable context and insight that can then be leveraged to better strategy formulation and implementation. Internal sources are those within your business. They could be anything from your products to customer interactions and can give you an idea of how well you are performing.
  • Data platforms are used to transmit generated data throughout the entire ecosystem, from data generation to customer and everything in-between.

People and partners

Digital transformation projects obviously require involving people. This includes hiring those with expertise in the development and implementation of transformation strategies, partnering with those who can aid in the transition, and both retaining and attracting customers with the new value offered by your digital transformation, something relevant to all three companies.

In ABB’s case, they were attempting to create software that would offer continuous value for customers, something that wouldn’t just attract a client but retain them. As for CNH, they were committed to driving the evolution of the agricultural industry while supporting the development of the digital farming paradigm to connect customers with internal and external partners. Vodafone, similarly, was hoping to improve their attentiveness to customers through automated, efficient customer care.

Artificial intelligence

According to the case study authors, all three of the companies utilized artificial intelligence (AI) to further the value created and extracted from their data. The efficiency of this approach and the insights it generated contributed to all three businesses executing their digital transformation strategy implementation in a highly effective manner.

In all three cases, data collected was used to develop and test machine-learning models for various purposes. More specifically, according to the study, AI technologies were adopted rapidly within a data exploration framework to ensure an agile approach to value creation—a key success factor that allowed for developing better solutions to existing problems, identifying new patterns in data, and promoting both radical and incremental improvements.

Concluding thoughts

Raw data must be interpreted into useful information in order to be valuable. This process looks different for different businesses, but the end result should be the same – insight and understanding generated by data and used to further the digital rebirth of the business. This newfound knowledge and the plan guiding the company’s transformation will influence the processes and procedures that are used to offer value to customers.

About the Author: Hanna Marcus

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