Technical transformation: A leader's guide to B2B digital transitions

Highlights

You’ll learn all you need to know about technical transformation and how to approach it.

• Start with an innovative mindset: Shift from tech-first to growth-first thinking
• Encourage curiosity: Ask the right questions and communicate clearly
• Foster alignment: Build a shared and unifying vision across your teams

Lead smarter—start your technical transformation journey today.

Technical transformation focuses on reimagining operating models, creating value through innovation and driving competitive advantage. In that sense, it is not merely a technology upgrade.

According to McKinsey, 70% of complex B2B digital transformations do not achieve their stated goals, and in 45% of cases, this is usually due to leadership inadequacies.

What is technical transformation?

You can think of it as a set of actions a business takes to reassess and overhaul its IT systems in line with the demands of a digital economy. It is a critical part of an organization's business transformation. Given its messy and disruptive nature, leadership plays a crucial role in the process. 

The key drivers of technical transformation

Technical transformation is the redesign of digital business operations through the strategic implementation of digital technologies.

• Digital strategy alignment: It starts with a cohesive digital strategy that aligns modern and emerging technologies with business objectives. This strategic alignment ensures that technical initiatives deliver measurable business value. So, you are not merely implementing technology for its sake.
• Business outcomes and value creation: This comes from the need to modernize tech stacks for better speed, uptime and IT security in line with digital trends. These factors contribute to the overall business strategy and value creation goals.
• Technology advancements: ML and AI, AR/VR and cloud computing serve as catalysts for digital change. Aside from that, the need for more flexible and personalized experiences has led to the use of headless and composable technologies. These shifts necessitate that businesses upgrade their IT systems in line with the trends.
• Changing customer needs: Customer needs have become more dynamic, with growing demands for tailored experiences. These demands catalyze a system upgrade for B2B companies.

Assessing organizational readiness for technical transformation

Before embarking on technical transformation, leaders must asses their organization’s digital readiness and maturity. This provides a reliable insight into current issues and potential roadblocks before implementing digital initiatives.

Assess digital maturity

Digital maturity refers to an organization's ability to adapt to and leverage digital technologies. A report from the MIT Initiative on Digital Economy found that companies with high digital maturity are 26% more profitable than their industry peers. To assess digital maturity, here are the key factors to evaluate:

• Current technological capabilities and legacy systems
• IT and digital skills across the workforce
• Data governance practices
• Capacity for innovation and cultural readiness

Several frameworks exist for assessing digital maturity, including the Digital Maturity Model (DMM) and the Digital Transformation Index (DTI).

Identify technical debt

Sometimes, businesses take a short-term approach to quickly deliver products or features, often at the expense of future stability. This concept, known as technical debt, leads to increased costs to maintain IT systems. It also delays necessary technology upgrades.

Research suggests that technical debt eats up up to 40% of most organizations' IT budgets. If identified and addressed, it clears the pathway for new initiatives. Here are indicators of technical debt:

• High maintenance costs for legacy systems
• Declining system performance
• Limited ability to integrate new systems
• Recurring security issues 
• Inability to implement new features

Understand the technology adoption lifecycle

The technology adoption curve categorizes organizations as innovators, early adopters, early majority, late majority and laggards based on their stage of tech adoption. Understanding what stage you are in offers valuable context that enables you to assess digital readiness.

Based on the bell curve distribution of tech adoption, only 13.5% of organizations are innovators and early adopters. These organizations tend to achieve three times greater ROI from technical transformation initiatives than laggards.

Building a digital strategy

A comprehensive digital strategy serves as the foundation for successful technical transformation. It comes into play after you have ascertained the organization's digital readiness. Here are the basic steps to follow:

• Align digital initiatives with business goals: Articulate business priorities, identify digital enablers, outline measurable outcomes and success metrics and provide executive sponsorship. This ensures your digital initiatives support the business goals.
• Create a strategy to implement the technology: This should define the specific approaches for digital transformation. It may include cloud-based migration, AI integration, business process automation and CMS modernization.
• Develop a value proposition: This articulates the benefits of technical transformation to stakeholders. It should address ROI timeframes, expected impact on the business, strategies to mitigate risks and opportunities for differentiation.

Leadership competencies for technical transformation

You need leaders who are well-grounded in managing people and technology, and they must display specific core skills for a successful outcome. Here are six critical leadership competencies to guide the transformation process:

• Digital vision and strategy formulation
• Ability to facilitate cross-functional collaboration
• Change leadership and stakeholder management
• Agile implementation oversight
• Risk management and governance
• Data-driven approach to making decisions

Senior technology leaders, like chief digital officers, drive business transformation. They are to secure the buy-in of internal stakeholders, bridge IT and business functions, advocate for digital innovation and orchestrate the transition. 

How leaders can build digital competencies

Where digital competencies are lacking, the organization must develop them within its leadership, and here are practical ways to achieve that:

• Executive education focused on digital programs
• Repeated digital simulation exercises
• External advisory relationships by consultants or advisory board members

How to manage the human side of technical transformation

Sometimes, digital leaders focus too much on technology, ignoring the people who drive the change. People drive change. They are also responsible for putting the technology to efficient use. Hence, leaders cannot afford to neglect the human side of the process. Here are several ways to manage it.

• Understand resistance to change: Potential job losses and technical skills gaps are real concerns for employees. There is also uncertainty about what the new state has to offer. Keep open channels to enable them to share their fears and worries.
• Deploy change management frameworks: These structured frameworks offer proven strategies to navigate the human elements of technical transformation. Examples are Lewin’s model, Prosci’s methodology and Kotter’s 8-step process for leading change.
• Manage the psychology of technology adoption: Focus on factors like perceived usefulness and ease of use, as both can improve adoption rates. 
• Foster a positive digital culture: Technical transformation also entails a cultural shift. So, it makes sense to make it positive. Enable an innovative mindset, and encourage open communication, continuous learning and experimentation.

Strategies to manage B2B technology transition

IT and digital changes require structured approaches that manage change, people and processes. Here are some strategies to prioritize.

• Agile methodology: This strategy has been shown to be effective in transition projects. Key practices include using an iterative approach with frequent feedback, continuous improvement, team collaboration and a minimum viable product approach.
• Improve efficiency of operations: Focus on strategies that will enhance your processes and, by extension, customer experience. This includes automation, improved use of data, optimized resource usage and streamlined workflows.
• Monitor progress: Start with a clear goal and outline KPIs. Use real-time dashboards to visualize metrics and review IT governance. You may also deploy predictive data analytics to forecast and plan for future outcomes.
• Deploy the right technology: You want to deploy technologies that simplify workflows and automate processes. For instance, Contentstack's composable DXP has a low/no-code interface that business users can easily adapt to. It also supports API integration for phased deployment, seamless data migration and real-time synchronization.

Main obstacles to technology transitions

While investing in digital maturity has become critical for the B2B sector, organizations must prepare for and navigate several related challenges, which include:

• Resistance to change: Inertia remains a primary obstacle. That, along with the uncertainty of change and a team used to a specific culture, can make things difficult. Gartner research shows that leaders who respond to resistance and incorporate feedback increase their odds of success by up to 62%.
• Skills gap: B2B companies with low digital maturity will struggle to innovate. Also, the option of acquiring new talent may be costly, and in some cases, unrealistic.
• Legacy systems: These systems often create technical debt and integration issues that can bloat IT budgets. This leaves limited resources for innovation. Businesses may need to combine hiring, upskilling and partnership approaches.
• Data security and privacy concerns: Technical innovation increases data usage and systems integration. This may create security and privacy issues. Leaders need to deploy adequate security and governance frameworks to manage these issues.

Building digital capabilities

Leaders must address digital skill gaps to ensure the success of any digital innovation initiative. They can start with assessments that focus on technical skills, digital literacy, digital mindset and specialized knowledge. Here is a structured approach to building digital skills.

1. Assess current skills: Conduct a technical skills audit across teams to ascertain digital maturity. This allows you to know what digital skills to prioritize.
2. Create learning paths for critical technologies: Technologies to prioritize include API development, cloud architecture, data management and automation.
3. Implement hands-on learning: Strategies include technical bootcamps, partnership trainings, sandbox environments and paired programming.
4. Specialized partnerships: This can be partnerships with technology vendors and industry partners. For instance, Contentstack’s partnership program offers a robust ecosystem of partners to help accelerate your digital innovation.

Case study

Pirelli

Pirelli's legacy CMS caused inefficiencies in publishing, high operational costs and lacked scalability, as it reached end-of-life with no updates or security patches available. They implemented Contentstack's headless CMS, enabling them to migrate 218 websites while decoupling front-end and back-end processes.

The migration was completed in just 10 months, ahead of the 12-month target. As a result, content publishing became 75% faster, and content efficiency improved by 55%.

"When Pirelli launches a new product worldwide, we need to adapt content and update the catalog, homepages, SEO pages and product pages of 50 websites in more than 25 languages with a very short time to market. With Contentstack, compared to the previous CMS, the operating time has been cut in half." Viola Viganotti said.

Read more to see how Contentstack powered Pirelli's technical transformation.

FAQ section

What is a technical transformation?

It is an overhaul of an organization's IT systems to improve efficiency and delivery in a digital economy. It is part of the larger digital transformation strategy and is led by leaders, such as a CIO or CDO.

What is the technical meaning of transform?

It means going from a state of outdated and legacy systems to a desired state of modern, flexible technology systems.

What are the four types of digital transformation?

Digital transformation can focus on business model, business domain, business processes and cloud migration.

Learn more

Technical transformation is a strategic imperative for B2B companies seeking to remain competitive. It hinges on active leadership, strategic planning and a sustained commitment to technology and cultural changes.

The frameworks identified in this piece enable leaders to navigate the complexities that come with the transition. Contentstack offers the right suite of tools to support your innovation initiatives, including a composable DXP with a headless CMS. Talk to us today to see how these technologies can power your transformation drive.