The Fundamentals of Digital Transformation
Digital transformation may sound to some like the latest tech buzzword, but in reality it's a vital process for keeping organizations up to speed in the modern world to ensure they stay relevant. The rapid adoption of technology is changing how customers engage with organizations in every industry and businesses need to adapt to create new sustainable competitive advantage if they are to keep up.
What is Digital Transformation?
Digital transformation is the integration of digital technologies into all areas of a business. The transformation results in a fundamental change to how a company operates and delivers value to its customers. However, it is so much more than simply adopting new technologies. Digital transformation is a metamorphosis of the entire organization; it involves changing the way people work and challenging their mindsets and the existing processes and strategies that they rely upon. Embracing the cultural change that comes with true digital transformation requires organizations to continually question existing conditions, experiment and become accustomed to failure.The aim of digital transformation is for businesses to become more efficient, data-driven and agile, allowing them to take advantage of business opportunities and fight off competition. To enable organizations to use technology in this way, digital transformation needs to be a journey rather than a one-off task. An organization that is continually transforming will strive to optimize its processes, competencies and models to fully take advantage of the available mix of technologies. Digital transformation will make an organization relevant in today’s society but also focus on how to keep it that way into the future.
Why is Digital Transformation Important?
Digital transformation allows businesses to embrace sophisticated digital technologies thereby enabling them to communicate, collaborate and do business more efficiently and effectively. It is becoming ever more important to leadership teams, many of whom now consider it a matter of survival in an ever-evolving digital world. Ultimately businesses don’t transform out of choice; it is a necessity; they need to evolve in order to stay in business.However, above the core motive of keeping up with change, there are a number of reasons why an organization adopts digital transformation. Technology offers the opportunity to increase profitability, improve customer satisfaction and accelerate the route to market. Digital technology has transformed the working landscape in every way, to such an extent that regardless of industry every company is now a technology company. Having a digitally-driven business model is the only way to keep up with the speed of change, compete in rapidly evolving marketplaces and meet rising customer expectations.
Digital Transformation Strategy
Digital transformation can be a complicated process; finding the right strategy is fundamental to successfully achieving transformation rather than merely adopting new pieces of technology. It is strategy itself which should drive the change, not the technology behind it. Focusing on the core business goals, often improving customer experience and bringing new products or services to market, are the aspects that enable organizations to become digitally mature.Scopes and objectives should form the basis of any digital transformation strategy with technology being the last consideration. Technology, after all, is just the enabler, it’s the way that any new technology is implemented that will allow it to have the most significant change and ultimately the greatest impact on an organization’s success. It’s also worth noting that digital transformation strategy shouldn’t focus purely on the digital world. The strategy should bridge the gap between online and offline experiences. People don’t want digital for everything, and human interactions will always be significant, the difference is that digital technologies have the ability to empower and inform those interactions.Digital transformation is a massive undertaking and requires a clear roadmap, involving all stakeholders and breaking down silos. With strategy based on an end goal that will continue to move, digital transformation will become a journey which is based upon testing and innovating within the digital landscape.
Digital Transformation Culture
Often, organizations considering digital transformation, are most concerned about the logistics of switching from legacy systems, managing siloed data or getting buy-in for new technology. The most important piece in the digital transformation puzzle, however, is company culture. If a company focuses on technology without considering organizational capability, they won’t be able to ensure they will have the desired impact. Mindsets and processes need to be adapted to build a culture that fosters change.Technology can fix a business problem, but it will be short-lived if the company culture isn’t there to support it. This is why company culture should be the number one priority during digital transformation. Everyone within an organization needs to change the way they work and behave; otherwise the technology itself will likely fall flat. Employees need to work with technology to achieve its strategic intent.
Where to Start with Digital Transformation
While the argument for digital transformation may seem obvious, getting started can be a complex and potentially daunting process. It involves change that will impact every aspect of a business, embracing new ways of working and more than likely stepping out of the company’s comfort zone. However, digital transformation isn’t reserved for global brands. It’s available to any company dedicated to innovating and adopting change. To start on the path to digital transformation consider the following:
Corporate buy-in - transformation has to start at the top with full buy-in from the corporate team. This ensures that those with the authority to make changes understand the digital strategy and key aims.
Small wins - digital transformation doesn’t have to happen overnight. It is a journey, and you can start on a positive path by implementing some small wins.
Communication - it’s vital to communicate early, often and with everyone to ensure successful adoption of digital transformation.
Talent required - there will be a requirement for new skill sets to meet the demands of changing technology and to support the firm’s transformation.
Collaborate - break down silos, enable people to work together and to continually innovate.
It can be a leap of faith to shift from a declining yet still profitable business model to embrace a more digital approach. However, more and more companies are making the leap and combating digital disruption with digital transformation. Embarking on a journey of strategic and planned organizational change has the potential to make a huge difference to any business ensuring it has a place both now and in the future.