What is digital transformation?
Digital transformation – to put it simply – occurs when you implement technological changes to your business, operations and workforce with the intention of making the process more efficient, effective, data driven and agile. This can vary from trying something new to modifying/re-imagining existing business processes, culture and customer experiences.
You can’t – for example – just copy services/processes that already exist. That is not the goal. No, the idea behind digital transformation is that you use technology (digitally) to help transform/upgrade your service and make them better than they were before.
You could even say, that digital transformation transcends sales, marketing and customer service, and instead begins and ends with how you think and engage with customers because ultimately you’ll be changing the nature of your organisation and the way your employees work, challenge themselves and deal with daily tasks.
Good examples of digital transformation include: moving to new IT systems; implanting digital services; providing improved digital services; artificial intelligence; the Internet or Things, or moving to cloud computing (by transferring workloads to cloud computing architectures).
More importantly, for these digital transformations to be considered ‘successful’, your overall business strategy, processes and objectives need to be understood and analysed. In other words, it is not just technology you need to consider, but changing your business processes and corporate culture.
As a result, you’ll need to consider retraining, reorganising and even creating new jobs to ensure you keep up with this digital transformation.
Why would your business go through a digital transformation?
There are many reasons why your business may go through a digital transformation, but the most common triggers include:
- Improving the efficiency of processes and workflows within the workplace
- Increasing the autonomy of employees (by utilising digital tools)
- Becoming more data driven as an organisation (this can link to increasing data protection in light of GDPR)
- Increasing levels of digitally driven business
- Reducing business costs – according to Gartner’s CIO Agenda, digital transformations could reduce your costs by 39%
- Increasing security (especially when handling personal data post-Brexit)
- Making information more readily available and accessible across your organisation in order to enhance communication (between departments and the staffing structure)
- Improving customer experience – positive experiences = positive feedback = an increased chance of repeat service/purchase. The truth is, digital transformation can add value to every customer interaction, as it encourages businesses to step back and take a proper look at everything they do. From their internal systems to their customer interactions (online and in person); it entices businesses to look deeper and search for game-changers, whilst taking advantage of the latest technological advances. Take for example social media. Its arrival was not meant to eliminate call centres, but act as an additional channel/means for customers to communicate their questions, queries or concerns.
- Keeping ahead of the curve – businesses who choose not to digitally transform or adapt to changing markers will eventually fall behind their competition or become extinct. In fact, you risk making your own products obsolete by not anticipating how emerging technologies will affect your products.
- Increase client and employee retention and commercial sustainability
- Boost employee productivity – a prime example of this is company apps that enable employees to share files even if they aren’t in the building.
Now a lot these are instinctual and a natural part of helping your business to evolve. Yet, it is not always easy to recognise this need for change, especially when there isn’t a clear sign telling you to ‘go digital’. Some like to reveal themselves as a whole host of various business problems.
Because of this, we strongly recommend that you learn how to recognise these signs, so you’ll know when it is the right time to ‘transform’ and create a digital transformation strategy.
Take a look at this checklist. If you tick off more than one, then it may be time for you to make a change:
- You’re not getting the same level of referrals that you used to – this may mean that you need to establish more of an online presence via social media, apps, email and messaging, or that you need to improve your digital presence to make yourselves easier to share with others online.
- Repeat business has dropped – this doesn’t necessarily mean that your services/products aren’t measuring up. This loss of repeat business may be due to competitors winning them over with deals or that you aren’t communicating/following-up with them (or a range of other reasons). Either way you may need to rethink your messaging strategy.
- Promotions that have worked in the past are no longer generating leads – the reality is, even the best digital strategies can lose effectiveness with time. So if something that once worked is no longer producing leads, then you may need to rethink your marketing approach from the bottom-up.
- Growing complaints regarding lack of cross-department communication/collaboration/information sharing – to be progressive you need to encourage collaboration across all teams. You should also aim to knock down the walls between departments and create a unified front.
- Technology systems feel outdated – with the development of apps, there is a certain expectation for them – and their features – from consumers. This means you can’t just rely on spreadsheets to do everything. Instead, you need to harness current business apps and technology platforms to make sure that you meet their specific needs, whilst offering them something that is user-friendly and compatible with multiple devices.
Another point you need to consider is that according to Gartner’s CIO Agenda, digital business will represent up to 36% of your businesses overall revenue by 2020; whilst 66% of companies believe they will earn more revenue from undergoing a digital transformation.
How to successfully carry out a digital transformation for your business
Ok, you know what digital transformations are and how they can benefit your business. But how can you take this idea and turn it into something credible?
We suggest employing the following tactics:
- Make sure that you have set clear and measurable goals to aim for during your digital transformation.
- Reduce the gap between your online and offline business practices, and bring them under one roof. By bridging this divide, you can develop more comprehensive strategies. This includes increasing the speed of which your new products/services reach the market.
- Don’t let your competitors influence your decisions – instead, do what works best for you and your situation, and don’t let your competitors actions interfere or lead you astray. What works for them won’t necessarily work well for you too.
- Don’t be afraid to ask for assistance – there is nothing wrong with reaching out to a consultant, partner or a tech vendor to ask for advice. After all, they have been trained to offer you a higher level of experience and expertise, and will have likely been in similar situations with other companies. This means, you can confidently harness their knowledge of digital transformation, and use it to create a better plan of action, as they will know the most direct paths for achieving a successful transformation. PLUS, alongside bringing something new to the table; asking them for help doesn’t have to be expensive. There are many large companies who freely offer advice/training for SMBs for no cost.
- Make sure you select the right tools for your business – again don’t let other businesses influence your decision, but instead do your own research and match what you find to your business needs. For instance, you’ll quickly find that some free services (with limited usability) are better suited for SMEs than large organisations. In the case of large businesses, there will be times where they benefit more from expensive solutions that aren’t necessary for SMEs.
- Remaining committed and cooperative to the transformation process, all the way up to leadership level.
- Make sure you give your employees plenty of time to train and practice new procedures before you permanently implement these changes. Not only does this stop consumer experiences from becoming diminished as a result of silly mistakes; you can also use these training sessions to ask for ideas and feedback (during the planning stage). And this is very useful, as their insider perspective will help you to gauge how they will be affected in the long term.
- Don’t drag out the project – the sooner you enter into digital transformation, the quicker you’ll receive feedback – which you can use to improve your strategy. With every new suggestion, you can modify your plan and adapt it so you achieve maximum benefits for your business.
- Continuously evaluate performance and potential against your business objective. With every new challenge/obstacle you can change your strategy where necessary.
- Before you start do an internal assessment – this will help you to identify gaps, problems and areas where you may experience problems. We recommend involving everyone as they will all play a part/role during this digital transformation. For instance, your decision could impact on their daily workflows. For this reason, aim to get them all on board and involved early on. NOTE: during this internal assessment you should look at ways to reinvent supply chains, workflows, employee skills, customer interactions and value, so that you can keep up with emerging customer demands.
- Build into your strategy the opportunity to remain flexible, so that you can easily adapt your strategy as your business evolves.
- Make sure the technologies you’re investing in can integrate – this means adopting a scalable platform that will enable processes and information to move freely as possible.
- Perform an IT assessment – as well as an internal assessment, you should review every aspect of your current IT setup. This includes reviewing and assessing your IT infrastructure, hardware, software, licensing, landline communication, mobile communications, IT support provider (and their contracts), IT security and procurement and utilisation.
- Don’t forget about existing infrastructure investments – whilst you want to stay up-to-date, up to 90% of current applications will still be in use in 2023, so you don’t want to change everything. Instead, you need to make sure that these existing infrastructures (legacy systems) don’t become obstacles in the future, but can easily be replaced when necessary.
- Make sure you understand these cutting-edge technologies – if you don’t understand ‘how’ they will bring value to your organisation and your customers, then you won’t achieve digital transformation.
- Analyse where the market is heading and your place in it, so you can anticipate potential digital disruption.
The thing to remember is that digital transformation doesn’t stop. Nor does it have a shelf life or a set expiration date. Instead, it is a constant journey that is always evolving and seeking to better itself.
For that reason, you need to be prepared for the long haul.
Luckily, at Economit our specialist consultancy team can help you to easily traverse future technological advancements and ensure that – from start to finish – you achieve a successful digital transformation.
From developing a deeper understanding of your current systems and architecture, to taking into account your budget, security, compliance and commercial viability; we can help you to navigate this terrain and ensure your products/services don’t become obsolete.