Just like how biological evolution makes sure that a species survives the many changing conditions in the world, digital growth ensures that irrespective of the many technological changes happening across the globe, a business can still thrive and grow. Simply put, digital transformation is the process of using up and coming digital technologies to either modify or create new business processes. While many businesses view the concept of digital transformation as a disruption, there’s no doubt that they add incredible value to the organization and bring multi-faceted benefits to any business. Digital transformation transcends traditional roles like sales, marketing, or even customer service. It goes beyond businesses trying to meet the changing needs of the market and stay ahead of the competition. Digital transformation begins and ends with only one factor — customer engagement.
What digital transformation means for business
When it comes to digital transformation, it’s tempting to fixate on the digital part—the platforms and processes—rather than the transformation part. The idea that you could just buy the right software and instantly increase productivity is appealing. But fundamentally, digital transformation is about changing how teams work together, not just what tech they’re using to get that work done.
While digital transformation looks different in every company, digital businesses share some fundamental characteristics:
Collaborative: Every member of the organization is meaningfully involved in achieving a shared vision. This means working together at different levels of the organization and across teams to build trust, promote transparency, and engage employees.
Cultural: Requires shifting away from traditional business structures and hierarchies and empowering employees to make decisions and contribute ideas.
Cloud-based: Cloud-based services are economical and agile, allowing businesses to choose the ones that meet their needs and streamline their IT and infrastructure costs.
Mobile: Customers expect ease and convenience from businesses, which means they need to be on mobile, where more than half of all web traffic is generated.
Innovative: Digital businesses are always experimenting and then learning from the outcomes to inform larger changes across the company.
Continuous: This isn’t a project with a start and end date. Technology will continue to evolve and call for adaptations to current processes, which means you need to keep learning and evolving.
Data-driven: This includes not only collecting and analyzing data about your customers but measuring what’s happening inside your company too.
Customer-centric: Ultimately, these shifts are all focused on providing better service and a better experience for your customers.
Notice that none of these is about what your company does; they’re about how you do things. Digital transformation companies don’t change the core values or offerings of their business. Instead, it’s about developing a connected workplace culture and acquiring digital transformation tools that will support strategic goals.
For example, The New York Times uses data on audience engagement to generate internal alerts, letting staffers know when a story is performing well and merits a push notification. But the alerts don’t automate the process entirely; they generate important information that allows staff to communicate with one another about how to share the story with readers. Technology-enabled collaboration, not just data, was key to improving their processes and outcomes.
There’s no doubt that digital transformation is changing how businesses work. As organisations move from traditional paper and spreadsheets to smart applications to manage their operations, they have a chance to reinterpret how they do their business — how they engage with their customers, with digital technology on their side.
More and more companies are now taking a step back and revisiting everything they do — from internal systems that they use on a day-to-day basis to how they interact with their customers. Questions like, “How can I change my processes to add value to every customer interaction?” and “Can my processes enable a better and personalised customer experience” is on the mind of many CEOs in the world today.
For instance, let’s consider Netflix: A classic example of digital transformation and customer engagement is Netflix. Netflix started as a simple mail-order service but ended up disrupting the entire brick-and-mortar video rental business. By taking advantage of digital innovation, Netflix made wide-scale video streaming possible. Today, Netflix has almost replaced the traditional broadcast and cable television networks by simply offering a growing library of on-demand content at extremely competitive prices.
Digitisation not only allowed Netflix to stream video content directly to their customers on their laptop screens and mobile phones but also gain an unparalleled insight into the viewing habits and preferences of each user. The amount of massive data collected helped Netflix design a better user experience, and understand the shows and movies that the majority of their audience is interested in. Thus, by using digital transformation, Netflix made a net income of over 1.86 billion U.S. dollars in 2019! (Yes, you read that right!)
In fact, one of our clients, Hesus reached out to us because their existing systems were old, laborious, and obsolete. They wanted to digitally transform their business so they could streamline their processes and increase their overall efficiency.
1. Streamlines existing processes
If you’ve been running a successful business for a couple of years now, then you know that executing any operational process is extremely time-consuming. In a world where time is a luxury, you just cannot afford to spend precious time on redundant processes — operational or otherwise. By using digitisation and cutting edge, new-age technology, business operations such as communication, data storage, and analytics can become more adaptable and collaborative, in turn, maximizing results.
2. Increases overall efficiency Because all your processes are now streamlined, thanks to digitization, you no longer have to worry about unexpected bottlenecks. Digital processes allow the quick flow of inter-departmental information, eliminates redundant tasks and improves the overall efficiency of the business.
This, in turn, also helps reduce the operational costs that are associated with complex, time-consuming workflows. The digital transformation of business prevents the bottleneck of data and information. Also, streamlined processes and increased efficiency means that the workflows can be adjusted quickly and easily, based on the changing priorities and goals of your business.
3. Promotes an environment for growth With digital transformation comes a strong customer base, increased customer engagement, efficient processes, and automated workflows. And that’s why it’s no surprise that companies that implement digitization find it easier to grow and expand.
For instance, an organisation that has no online presence whatsoever probably generates sales through retail stores and word of mouth. However, by building an optimised and robust website, the business will be able to attract more customers than before. This means that they now have more opportunities to promote their products, generate more sales, and in turn, reap profits. Further, by tracking the behavioural patterns and feedback of their existing customers, they can create more products that appeal to their clientele and scale their business accordingly.
4. Empowers the workforce Technological advancements and innovations also empower the workforce to become more proficient and productive in their day-to-day tasks. Working with streamlined processes means that they can accomplish all their tasks quicker. Further, by learning and implementing digital transformation, engineers are exposed to the latest technologies such as Artificial Intelligence and Machine Learning. Thus, digitisation allows them to capitalise on their efficiency by using AI-powered tools and getting the job done in lesser time. They also get to learn advanced skills, which can go a long way in boosting their personal growth as well.
What is a digital transformation strategy?
A “digital transformation strategy” refers to all steps and actions a company takes to implement technology and reap its benefits. It starts with understanding current business operations and how they can evolve by means of technology. Then, the company sets business objectives and analyzes potential risks about implementing software and platforms across processes and departments. Thorough research is essential to identify available resources and how technology can impact the business.
An example of a digital transformation strategy would be revamping the recruitment process via technology. For instance, a talent acquisition platform could include anything from AI that supports sourcing activities to complex analytics on the efficiency and quality hiring methods.
Keep in mind that a digital transformation strategy needs time to produce positive results. Some employees may find transitioning to the “digital world” challenging. Whether these employees are slow to adapt to new technology or whether they’re consciously resisting change, companies need to address their concerns via a well-formulated plan. With the right training and mindset from leaders and managers, these setbacks can be overcome. Digital transformation requires buy-in from all parties – be it executives, employees, or even customers – to truly succeed.
Trends in digital transformation in 2020
Digital transformation accelerated across many industries in 2019. 2020 will also see the rapid scaling of digital initiatives across different industries globally. Here are some digital trends that you should be on the lookout for this year:
AI and Machine Learning will take centre stage.
Newer digital transformation success metrics will be created.
Businesses will pay more attention to the long-term value of digital initiatives.
Adoption of different digital operating models, such as integrated cross-functional teams.
An expansion of public cloud adoption.