How to Convince Your Leadership Digital Transformation is Worthy of Investment
Digital transformation is at the forefront of not just luxury brands, but nearly all players across nearly all industries right now. But convincing the upper echelons of management of its importance and the need for investment can sometimes feel like an uphill struggle.
Technology has changed the business landscape greatly, of that there is little doubt. From social media and content marketing to ecommerce and big data analytics, there's hardly a corner of the world where digital tech is failing to cause severe disruption.
However, for many CEOs and executives - particularly in the traditional luxury sector - the benefits of digital investment are abstract concepts. They see new technologies as additional to the core business model, rather than being essential to it, and are often in need of quite a lot of convincing before they sign-off on spending plans.
The fact of the matter, however, is that as tech-savvy millennials are accounting for more and more luxury sales, investing in technology and digital customer experiences is just as important for luxury brands as it is anyone else. You know this - but how do you go about convincing your leadership that digital transformation is worthy of investment?
Show Them the Money
With recent predictions suggesting worldwide IT spending is set to increase by more than 6% to $3.7 trillion this year, one of the best ways to convince your executives to contribute to the pot is to show them what's going to come back.
ROI is what your C-suite really cares about. These people are so busy with the business of running the company, they have little time or patience for the tiny details of how digital transformation will be carried out. Their interest in a project will be more keenly focused on how the initiatives you are proposing are going to translate into increased revenue and profit, and that those yields are going to be worth more than the investment you're asking for.
Start with an analysis of the current market, such as what your competitors are doing and the results they're seeing. Give examples of how digital transformation is changing the growth of your industry and disrupting the competitive environment.
Tell them the impact your initiatives will have on factors such as customer experience, operations, and other aspects of your organization. Explain how this impact will lead to reduced costs through things such as operational efficiency, and/or increased revenue and profit through more sales.
Make sure to detail how you plan to measure these changes and your plan for remaining flexible going forward. The very nature of modern technology makes it hard for even the most knowledgeable experts in the field to predict trends further than 4 to 5 years in the future, and your executive office is not going to want to constantly sign off on new initiatives every few months. So, make sure there's an agile plan in place.
"In selling the concept of digitization to your board and executives, adopt a mindset of the venture capitalist, as if you're investing in a brand new company for the first time," said Principal Analyst and Founding Partner of Futurum Research and Analysis, Daniel Newman. "Know where value in your industry is migrating and explain it clearly using data and analytics from your entire industry."
Tell a Story
When it comes to convincing the C-suite to use digital transformation to solve more specific pain points, though you will need to present fact-based and brief arguments, it will also pay to tell a story which leads your audience through four key analytical stages:
- Descriptive - Explain the problem and back it up with facts. For example, X% of customers fail to receive email communications from us.
- Diagnostic - This is where you identify what the cause of the problem is. The need to manually send out email newsletters to too large a contact list, for example.
- Predictive - The impact the problem is having on your bottom line. Losing out on X number of sales of X average value, due to customers not being informed of new products or promotions.
- Prescriptive - The solution. Here's a tool which will automate our email marketing processes and ensure all customers receive all communications in the future.
This is what your executive office wants to hear - the facts of the current situation, what it will take to solve the problem, and the impact of that solution. Always go in with more information than you plan on volunteering, however, as you will likely need to field additional questions.
Remember, when standing before your leadership, you will be trying to convince them how vital your request is to their business. This means you will be walking into an environment where skepticism is the default setting - so you need to be prepared to convince them your request is the exception to the rule, and that digital transformation is worth the investment.
"When digital transformation is done right, it's like a caterpillar turning into a butterfly," said Principal Research Scientist at the MIT Sloan Initiative on the Digital Economy, George Westerman. "But when done wrong, all you have is a really fast caterpillar."