As the world becomes more reliant on technology, many associations begin pondering whether or not a digital transformation is needed. For many, digital transformation is a buzzword that tries to explain how organizations reach a future version of themselves. According to Deloitte, 85% of CEOs accelerated some type of digital transformation during the pandemic. However, many of those efforts failed or struggled to show results because of the fundamental misunderstanding of what exactly a digital transformation is.
In this guide, we’ll give you everything you need to know about digital transformation along with strategies to help get your association started.
What is digital transformation?
According to Salesforce, one of the most straightforward definitions of digital transformation is “the process of using digital technologies to create new – or modify existing – business processes, culture, and customer experiences.”
However, this is often where the confusion starts.
A common misconception is the term “digital.” Most may think this means digitizing all of your manual processes. While this can help streamline how you operate, it does not mean you are digitally transformed.
Instead, a digital transformation is the process of going digital. It’s looking for opportunities where you can leverage technology and strategy to help make life easier for your staff and members.
Just like there is a misconception about what a digital transformation is, knowing what it is not is just as important.
As an example, we just said that transforming means investing in technology. However, that doesn’t mean buying the first new software you can find and calling it a day. According to the Harvard Business Review, of the $1.3 trillion spent on digital transformation, it’s estimated that $900 billion went to waste. Why? Because organizations spent on things that weren’t the right fit.
It also doesn’t mean changing your entire business model. As mentioned earlier, looking for opportunities to innovate the way your organization operates is essential. "Digital transformation is NOT merely the upgrading of your back-end tech stack," Maddie Grant, digital strategist and culture consultant, PROPEL says. "That work is important and has its place, but digital transformation is always ultimately about providing new and better value to your members through more holistic ways of building relationships with them, understanding their evolving needs and helping them get THEIR work done."
Similarly, the pace and scope of your digital transformation can also have an impact. Atlassian says, “trying to move too fast or creating too many changes can negatively impact the business.” That could mean disruption for your members or your staff, which can negatively impact not only your business but also your reputation.
Finally, digital transformation does not mean losing touch with your core values; in fact, it means creating more value for your members. According to Forbes, a key performance indicator of a digital transformation may be cost savings, but “if you can’t meaningfully improve the performance of your customer experience, you are missing a key component.”
While associations may tend to lean towards old-school thinking, the reality is that technology and media are becoming an increasingly important part of your members’ lives. As such, member expectations are changing, which is why a digital transformation is more important than ever.
Outside of technological improvements, however, this evolution can add other benefits, including:
As the last few years have taught us, being able to pivot and adjust to change is more critical than ever. Digital transformation works to create an innovative culture that can do just that, making your association more competitive and more able to handle the changing needs of your membership.
The key to a digital transformation is a happy balance between innovation and disruption. So how do we know what pieces we need to put in place to have one? Generally speaking, three main pillars support a digital transformation.
One major roadblock for many associations looking to work through a digital transformation is outdated thinking. Whether that is a hesitancy to allow staffers to go remote or a lack of investment in new technology, those decisions could easily have cost organizations in the innovation department.
A lot goes into a successful digital transformation. However, you should take five crucial steps to ensure it works for your association.
Resistance to change often comes down to identifying how these updates affect the business model. According to McKinsey & Company, board members need “metrics that truly reflect digital progress often in the “guts” of the business.”
This can be as simple as tracking how many people are using this new technology or the speed with which ideas translate into services your members are using.
Focusing solely on technology as the means for a digital transformation can quickly lead to failure. Instead, pointing your efforts to specific themes can help create the strategy around your focus areas.
According to Deloitte, “by thinking thematically … organizations can communicate across functions in a way that puts strategy before technology and can lead to initiatives that deliver a more modular, flexible technology core that better delivers transformation and strategic value.”
For our purposes, some of the thematic areas associations should focus on include:
Choosing the right focus area can help you dial in the type of digital transformation your organization is looking to achieve and also inform the innovations you’ll make along with the technologies you may need to achieve that goal.
A Digital Factory model could work for organizations looking for a hyper-focused solution to their digital transformation needs. According to McKinsey Digital, these “factories,” are comprised of a cross-functional team whose focus is on building new offerings based on member experiences or services.
“The secret to the Digital Factory’s success is that its small teams, working closely with the business side, function as a start-up accelerator.”
At the start of the process, senior leadership creates a “mission.” For associations, this could be something like shortening the accreditation process for a business. For example, going from 20 days to 10 – or moving from a one-business model to a cohort.
Once the mission is set, the Digital Factory is given specifics regarding timeframe and outcomes and left to collaborate and focus on this one outcome purposefully. While there is an opportunity for collaboration with leadership, these teams should be left to develop a testable solution.
This framework is an intensive model for organizations looking to create testable and time-specific solutions.
A great way to get a better understanding of what a digital transformation is is by seeing it in action. Many of the popular brands and tools we use today have gone through their own transformations, streamlining our lives and making all-new experiences.
While we all know the streaming Netflix of today, back in the early 2000s, they were mailing physical DVDs to homes everywhere. Then in 2007, they paired those DVDs with an option to stream, and by 2011, they stopped sending DVDs altogether.
While competitors like Blockbuster kept their physical locations, Netflix digital transformed and never looked back.
Today, they continue to innovate and add value to their customers. They consistently introduce new programming, including shows and movies, and create platform-specific content that keeps users engaged. It’s also important to note that these “streaming wars,” have changed the way all companies value and monetize their content.
Even before the pandemic, augmented reality had started to make its way into the shopping world. One of the earliest adopters was Ikea, whose app launched in 2017 and allowed shoppers to “place” their new furniture in their homes before buying.
By removing barriers for their customers – in this case, the need to go to a physical location – these brands leveraged technology to boost sales and user experience.
For associations, innovation is the key to growth – whether that means innovating the way your organization operates or in the way it provides value to its members. For many, the pandemic brought increases in memberships and engagement. However, to keep that trend going, digital transformation may be needed.
Maddie Grant says, "Why should associations care about digital transformation? Because your end-users - both members and prospective members - now expect a level of attention to "digital essentials" – like personalization and continuous cycles of improvements to the tools they are expected to use – that matches what they find in their daily lives and on their smartphones. If interacting with your organization feels outdated, why would they join or stick around?"
While there is plenty of confusion about digital transformation, it’s important to remember that it doesn’t just mean digitizing all your processes. Instead, it’s looking for opportunities to add technology to your strategy to help drive innovation, improve member experience and streamline the way your organization operates.
Jose Triana joined the Sidecar team as the Content Manager in 2021. He is a writer and creative focused on helping purpose-driven organizations learn and find value online. When he isn't working on content, you can catch him going for a run or resting with a good book.
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