How to Build a Digital Transformation Strategy
The integration of cutting-edge technologies into company operations is known as digital transformation. This strategy comprises fundamental adjustments to management practices, business culture, external communications, and implementing contemporary hardware or software.
As a result, both employee productivity and customer happiness rise, and the business develops a reputation as a forward-thinking, cutting-edge enterprise. Process digitization is essential not just for small businesses; entire industries have chosen this development course as the only way to adapt to the world’s accelerating changes. Because of this, every individual and every business today are experiencing a change as a result of the digital transformation of business, retail, the public sector, and other sectors.
Key Benefits of Digital Transformation
Let’s look through the benefits of going through a digital transformation within your business.
Better Customer Experience
Digitization technologies enable the most individualized engagement, which most customers prefer. We already deal with digital communication channels, omnichannel, artificial intelligence, and robotics in our daily lives. Chatbots, for example, are critical to banks’ digital transformation, while hospitals actively employ modern mobile devices in their job. When we talk about customer experience, we don’t just mean how internal and external customers engage with a business. The company’s employees’ work efficiency is improved by the digital transformation of procedures, which raises each team member’s productivity. For instance, automating regular work frees up time to solve very crucial and challenging problems.
Agility and Acceleration of Business Processes
Suppose the enterprise does not take advantage of current technology’s capabilities and does not adjust to the rapid speed of doing business. In that case, it will be unable to compete with others that have already started its digital transformation journey. To be successful, you must be quick and adaptable: change when there is a need, not when there is an opportunity. The goal of business digital transformation processes is for firms to make quick decisions, quickly adjust work to the time’s needs, and satisfy customers’ expectations.
Innovative Business Development Opportunities
The digitalization of business offers the door to new approaches to doing business:
- Cloud technologies enable several teams to work on the same project at the same time while utilizing the company’s resources efficiently.
- Companies that use the Mobile First strategy receive and monetize mobile traffic, which has already surpassed traffic from fixed devices.
- You can save time by using ready-made solutions to solve jobs. Various applications, extensions, and connections optimize the company’s work while requiring little time to develop and adapt.
All of these and other digital transformation technologies have lowered the barrier to entry into many fields. Starting and growing your own business has become more accessible thanks to the vast array of tools made available by the digitalization of industries and organizations.
Use of Modern Technologies for Working with Data
In today’s environment, information is a valuable resource. Humanity generates massive volumes of digital data every second, requiring storage space and assisting businesses in conducting their operations. To fully utilize all available information, it is necessary to collect, structure, and evaluate it.
The enterprise’s digital transformation contributes to this through advanced technologies such as Big Data and Artificial Intelligence (AI). They are designed to process information flows to assist business-related decisions and build offers tailored to specific customers.
Partnership and Cooperation
Digitization opens new avenues for collaboration with other businesses, some of which are unforeseen. For example, thanks to modern technologies, your location is no longer an impediment to doing business and finding partners in any region. Plus, things like open API facilitates and simplifies collaboration. For example, software interfaces have been utilized for several years in the digitalization of finance, particularly in the banking sector.
It is also important to realize that without digital transformation, being the greatest or working with the best is impossible. Leading firms are already adopting digital transformation plans and seek to partner with those who share their values and are at a similar stage of development.
Digital Transformation Strategy: Why Is It Important
The company employee accountable for the enterprise’s digital transformation (whether the CEO, CTO, CIO, or another authorized person) must clearly comprehend its importance in these circumstances. According to research conducted by 451 Research, 60% of organizations that have chosen the digitalization road do not have a matching authorized plan. This is a dead-end street.
It is difficult to properly carry out a company’s digital transformation without a clear strategy and vision — it is vital to grasp exactly how digitization will help the firm go in the correct direction and achieve its goals.
A key element to remember is that digital transformation is a long-term undertaking that necessitates a systematic and serious approach. However, you shouldn’t stop even after completing such a complex process; you should consistently improve your business while considering new advancements and technologies.
Four Key Steps for Adopting Digital Transformation
A digital transformation adoption strategy is a plan for how an organization will move from its current state of using technology to a more advanced state of using digital technologies. This strategy typically includes a roadmap that details the steps needed to be taken to achieve the desired state, as well as metrics for measuring progress.
Understanding the industry’s strategic axes, your company’s potential, and participation scenarios in these changes are all crucial.
Before adopting any kind of change, you should answer the following questions:
- What are the company’s ambitions? What is our desired speed and distance?
- Which user segments and value chains in the market are open to our presence?
- Do new realities require a change in the business model?
- Will the strengths of today’s business remain relevant tomorrow?
Digital transformation is about more than just technology; it is also about changes in business models brought about by new technologies, as well as the evolution of human (employee and consumer) behavior.
The most important thing to remember at this phase is not to base a new economic model on the old one. It must be transformed from the ground up, changing not only the exterior but also the basis to meet the demands and opportunities of the digital age.
It is critical to understand the client’s specific needs to implement such changes, regardless of the current company model. People require financial services, not banks, and mobility, not cars. People’s requirements are constant, yet a product is merely a short-term solution.
Four factors contribute to the success of digital transformation:
- Predictive and prescriptive analytics based on data and analytics. To effectively use data, begin with value and build data operations and analytical competencies around possible sources of value.
- IT systems will evolve from being isolated to becoming omnipresent and completely interconnected based on a flexible and modular architecture.
- Internal collaboration gives way to ecosystem integration in operations and partnership structures.
- Working with talent and culture is becoming an even more important topic due to the challenges of multi-functionality and ongoing “re-tooling.” The culture should promote inventive and quick thinking, multidisciplinary SME collaboration, and tolerance for risk and errors.
Companies that are effective in digital transformation demonstrate their strengths in five core areas:
- Scaling: Breaking down large projects into smaller components that can be handled by small teams and then effectively scaled across the organization.
- Management: defined goals and tasks, performance evaluation, and timely project completion.
- Leadership: thorough involvement of leaders in the process, and comprehension of digitalization at all levels of the organization.
- Funding: venture model for digital project finance, involvement of external investors, off-budget project financing.
- Inclusion: proactive engagement with regulators and communities.
How to Choose a Digital Transformation Model
There is no one-size-fits-all digital transformation model. It is impossible to fit the entire company under a single generic template because every organization is unique. Running simultaneously in both directions is not a good idea, though. The customer experience, a corporate culture of innovation that incorporates the expansion of staff capacities, operational efficiency, and, of course, the integration of technologies are all business processes that must be incorporated into the digital transformation framework.
Many businesses begin with automation because it provides the groundwork for future progress. This includes sales, production, financial flows, document management, and so on. For this, various options are available, ranging from cloud technology to specific software developed to handle company activities (ERP).
Furthermore, specific divisions of the corporation are implementing technology and solutions to establish new business models at the same time. The Internet of Things (IoT) in manufacturing, blockchain in accounting, online sales tools, warehouse robotics, and so on are examples.
Even the best digital transformation model will not produce results if all its stages and links are not coordinated. That is, there is a strategy in place, and improvements are being implemented, but the company’s management and owners are unsure how everything should interact. Therefore, it is critical to regularly test and optimize the IT infrastructure and business processes in order to detect and eradicate issue points as soon as possible. After all, there will be evident delivery issues if the sales department is not “linked” to the warehouse. If the production part is left to its own devices, there will be complaints regarding product quality sooner or later.
Another issue is that ideas are not always universal. Still, for some reason, businesses already view technologies, such as chatbot implementation or software for managing remote workers, as globally applicable. These are merely individual choices that, apart from synchronization, can typically cause the transition to lag.
Why Employee Involvement is Crucial
For some reason, businesses neglect the most critical aspect of digitalization — the part their employees play in these processes. That being said, it is crucial to fully include the team in the transition. A thorough evaluation of the workplace, which should be set for active teamwork with the potential for speedy employee participation to solve project tasks, is one of the engagement components.
Top managers should also communicate with staff members constantly. The management is required to promote the advantages that the transformation will bring to the company and to each employee, in addition to ensuring that the staff is tech-savvy and actively participating in their training.
It is essential to consider your subordinates’ ideas and accept their proposals for enhancing the organization without dismissing them. This will excite and drive people to take the most active role in the transformation because they will recognize their significance and understand the relevance of their ideas.
Digital transformation entails constant change. Essentially, the company is shifting its business model and corporate culture to a higher level. At the same time, it continues to evolve and improve. In addition, ideally, a separate unit should be established to monitor and regulate all activities linked to the transformation and vital activity of the “digital” body, as well as to analyze the findings and constantly expand the technological component. Only in this way will digitization and everything associated with it transform into a corporate culture, and the company will be able to respond to market needs and completely answer client requirements in a painless and timely manner. Let’s talk if you’d like to start a digital transformation journey.