Why Your Business Needs Digital Transformation

“Companies need limitless, adaptable, and essentially human systems to thrive in the ever-changing world.”

Technology in today’s business environment either reveals validations for success or threatens businesses that reject the transforming nature of the corporate landscape. Some claim that corporations are forced to make changes due to the digital equivalent of the fear of losing out and not the fear of digital disruption itself. In other words, some leaders are aware of the potential benefits of undergoing Digital Transformations and do not want to pass up the chances that may result from such implementations.

What Is Digital Transformation

In a world of fast-growing technology, Digital Transformation is often used interchangeably with Digitalization. Digitalization is the use of digital technologies to automate processes and activities while, on the other hand, Digital Transformation is a broader concept that includes digitalization and other changes.

Digital Transformation is the application of digital capabilities to processes, products, and assets to boost efficiency, increase customer value, and manage risk. It’s the adoption of digital solutions to minimize risk and navigate new revenue generation opportunities.

The process is both internal and external, involving in-house changes to people, information, and processes to improve results as well changes to external relationships to boost efficiency while reducing costs. Indeed, a successful digital transformation is characterized by a fundamental shift in operations, a culture shift, and a rethink of the organization’s status quo.

According to Accenture, Digital Transformation and business is the key to unlocking new opportunities in the modern world. Automation is perhaps the best evidence of digital transformation. Organizations can now automate processes such as email marketing to reach customers with better marketing messages. It also enhances timing, effectively improving open rates and email conversions. Another common tool in the digitally-transformed organization’s toolbox is Artificial Intelligence (AI).

Types Of Digital Transformation

Digital Transformation is not a single massive entity. Frequently corporations are focused entirely on organizational transformation and overlook the fact there are four types of Digital Transformations. As a result, they’re limiting themselves from taking full advantage of all Digital Transformation has to offer.

1. Process Transformation

From data, analytics, APIs, and Machine Learning to other technologies, much focus within the corporate environment has been on new ways to reinvent business processes to lower costs, improve quality, or reduce cycle times. Examples of successful process transformation include companies like Domino’s Pizza, where today customers can order from any device. They’ve entirely reimagined the food ordering process. This innovation has helped them to overtake their rival Pizza Hut concerning sales.

Other companies have implemented Robotic Process Automation to simplify their back-office processes, including legal and accounting as examples. Process Transformation can create tremendous value in a company.

2. Business Model Transformation

Process Transformation focuses on finite areas of the business. Business Model Transformations aim at the foundational building blocks of how value is delivered in a specific industry. In essence, companies are using Digital Transformation to change traditional business models. Examples of this type of reinvention of the business model include Netflix’s redesign of video distribution and Apple’s reinvention of music delivery: iTunes.

3. Cross – Domain Transformation

A prominent example of how domain transformation works is the online mega-retailer, Amazon. It marched into a new market domain with the launch of Amazon Web Services (AWS) and is currently the largest cloud computing/infrastructure service in a formerly owned field by giants such as IBM and Microsoft. AWS is a clear example of how new technologies redefine products and services, blurring industry boundaries and creating entirely new sets of non-traditional competitors. Domain Transformation currently offers one of the most significant opportunities for company growth.

4. Cultural/Organizational Transformation

A redefining of organization mindsets, processes, talent, and capabilities for the digital world is always needed to achieve long-term Digital Transformation for any industry. The most successful corporations recognize digital transformation requires a flexible workflow, a decentralized decision-making process, a bias toward testing and learning, and a greater reliance on different business ecosystems.

One of the best examples of this Cultural/Organizational Transformation is the consumer credit agency Experian. It was able to change its organization by instilling collaboration and agile development into its workflows. Additionally, it spearheaded a fundamental shift in employee focus from equipment to data throughout the company.

Approaches To Digital Transformation

1. Wait For Proof Of Digital Success

This first approach will help organizations focused on empirical results. The difficulty with this approach is the tremendous risk of remaining idle until your digital transformation catches on. It provides competitors with a distinct advantage if their digital success happens faster than it does for your company. Since most organizations have a mixture of digital and non-digital solutions, this first approach is usually the first choice for most companies.

2. Develop An All-inclusive Digital Strategy

This approach focuses on getting the strategy as complete as possible from the start. It requires a robust long-term plan. The all-inclusive Digital Transformation strategy focuses on changing the culture and rapidly implementing innovation. It is usually quite an expensive approach with many dangers. Businesses with great patience and an appetite for risk need only apply.

3. Incremental Delivery Of Digital Skill

This approach focuses on delivering benefits as a company moves toward a potential changing digital destination after identifying an initial target and route. But as the organization progresses, lessons learned and new inputs are considered, thereby changing the digital goal and sometimes the path to the destination. Therefore, this approach concentrates on delivering a solid yet malleable strategy that can evolve with industry changes throughout its lifetime.

Benefits Of Digital Transformation

If you’re wondering whether you should jump on the Digital Transformation bandwagon, the following are five ways a transformation can benefit your business.

1. We’re In A User Experience Economy

If you haven’t realized, the economy has changed from a seller’s market to a buyer’s market. Sellers no longer call the shots. They no longer determine what the customer buys. Unlike in the past when the seller had the monopoly over buyers, the buyer, with information at their fingertips, now have more say. Thus, sellers are now required to reach out to buyers rather than the other way round.

The only way to survive in a buyer’s market is to embrace Digital Technology. Think about a seller who wants to purchase shoes but will only do so from the comfort of their sofa. They aren’t willing to head down to the supermarket anymore. So, what can the supermarket do? The only solution is to establish an online presence that allows that customer to purchase the desired shoes online and have them delivered on time. For such businesses, digital transformation and business is no longer just a thought to be entertained- it’s the key to success.

2. Digital Transformations Boost Efficiency

Think about the time it takes to capture employee details and process payroll. Back in the day, all these were handled manually and it sometimes took weeks to prepare a month’s payroll. The worst part is errors. Manual payroll processing is characterized by mathematical errors that can cost the company dearly. Duplications alone can cost the company thousands of dollars annually. Yet, tacking and resolving the duplications is even more difficult.

Digital Transformation solves most of these issues through Automation. Rather than capturing and processing payroll and other processes manually, you can now implement software solutions that do the same in a shorter time – with fewer errors. Improved efficiency ultimately means greater productivity and higher profitability.

3. Provides Valuable Insight

The Digital revolution has led to a scramble for consumer data. Everywhere you go, organizations are spending millions of dollars to acquire user data to help them make better business decisions. Embracing Digital Transformation would allow you to join the revolution. By implementing Digital solutions throughout your business, you can capture valuable data to drive profitability and growth.

For example, an organization may collect customer data to help them optimize the customer journey. You can capture customer entry points to determine which channels bring in the most customers and which ones perform poorest. Then, using the data, you can invest more in the high-performing areas. If most of your customers come from Google ads, you may allocate more money for Google advertising in your next budget.

4. Strengthen Business Partnerships

A Digital Transformation for business can help you acquire new business partnerships. If you’re wondering how, the first thing you need to think about is how peer-to-peer business relationships work. Essentially, it means two businesses that view themselves as similar coming together to do business. If you’re not digital yet, digital enterprises may not see you as a “peer.”

Additionally, merging Digital Transformation and Business can help you strengthen existing partnerships and get more from your current business relationships. Consider e-signatures, for instance. Wouldn’t it be a lot more effective when you can sign off on loans from your laptop or smartphone without visiting your lender’s physical office? It creates a new level of transparency that entrenches trust and confidence from both business partners.

5. Important For Security

Finally, security is a critical matter in the modern business environment. Think about the consequence of employee smartphones in the workplace. Think about the viruses and malware sitting on your business computers and systems. Think about the external threats from cybercriminals and the loopholes or weak links in your security chain.

Many organizations rarely think about these threats. However, you’re not safe until every link in the business chain is secure. If the same employees who constantly receive email updates from the company occasionally use public Wi-Fi to access the internet, you’re already at risk. If you allow personal laptops in the workplace, you’re also at risk. The only solution is a complete Digital Transformation that includes security measures to safeguard your organization.

Challenges Faced In Digital Transformation

Many of the most significant barriers that businesses looking to grow Digital solutions must overcome are not technological. The success of Digital Transformation depends on taking decisive action on these problems, which can include eliminating organizational silos, addressing Digital skills gaps, and dealing with a lack of resources. Therefore, it’s essential to understand the most significant obstacles which have surfaced and should be tackled head-on.

1. Silos In Organizations

The respondents cited siloed tactics and decision-making as top challenges. Organizational silos are a perennial problem because they affect all facets of a successful digital transformation, including strategy, funding, and implementation. Governments, ministries, and corporate sectors all have these silos, each needing a unique solution.

2. Culture Of Caution

Frontline and service delivery workers frequently have resistant cultures because they are risk-averse and don’t see the need to change what they consider to be tried-and-true procedures.

A person leading a technology-led transformation faces a challenging job in this setting. For your Digital Transformation efforts to be successful, you must link them to corporate objectives and make organizational change their central focus.

3. Insufficient Resources

Budget shortages are frequently a sign of segregated strategies and decision-making, but they can also be brought on by the idea that technology expenditures are tactical rather than strategic.

Show the link between your investment in Digital Technology and the results it produces for your business to dispel this impression.

4. Gaps In Digital Skills

The most frequent issue with Digital Transformation for government is a lack of depth or breadth of Digital skills across the company.

For Digital Transformation programs to be successful, core specialized competencies in fields like enterprise architecture, cybersecurity, cloud, analytics, and digital experience design are essential. In addition, developing digital agility throughout the entire company is crucial to raising change preparedness.

5. Inadequate Business And IT Resources

The lack of IT skills was a severe issue for respondents, preventing the adoption of critical technological domains such as platform services, security, the digital workplace, and IT automation. In addition, the inability to promptly reach IT, business, and subject matter experts is frequently the result of misaligned goals, compartmentalized decision-making, and cultural issues.

While educating staff on self-service digital/low-code technologies is helpful, much more must be done to prepare them for challenging digital business contexts. Resources can benefit from improving IT resources’ digital dexterity and filling organizational gaps in digital skills.

However, companies will need to make a determined effort to ensure sufficient resources are committed to the relevant initiatives promptly, given the post-pandemic acceleration in digital investments across all industries.

Final Thoughts

Merging Digital Transformation and Business can be the catalyst you’ve been waiting for. Although not a magic wand, it can be the turnaround moment for your business. However, you must start now. Otherwise, you risk lagging behind your competitors.

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