Digital transformation is making use of digital technology to transform existing business processes and services or even creating new ones to keep up with changing market and consumer expectations and radically altering the way that businesses are managed and run, as well as the way the value they provide to their customers.
As per Deloitte, “digital transformation is all about becoming a digital enterprise–an organization that uses technology to continuously evolve all aspects of its business models (what it offers, how it interacts with customers and how it operates).”
As technology advances and your business grows, at this moment it’s not just about businesses deciding to change instead, it’s about the decision of how to change.
Digital transformation involves transforming your company by testing the latest technology and thinking about your approach to everyday problems. Because it’s an evolving process it doesn’t have to be defined by a specific endpoint. According to the MIT Sloan Management Review, which is a journal that studies how management changes in the age of digital technology and says that “Digital transformation is better thought of as continual adaptation to a constantly changing environment.”
For businesses, this means always looking for ways to improve the user experience. This could include providing better on-demand training or transferring data to cloud-based services, using AI, and so on.
3 Key Areas of Enterprise Digital Transformation
MIT Sloan Management Review highlights three major aspects of the digital revolution in enterprises:
1. Customer Experience
Customer Experience working to comprehend the needs of customers more deeply and using technology to help drive the growth of customers, as well as creating more customer-facing touchpoints.
2. Operational processes are improving
Operational processes are improving internal processes through automation and digitization, equipping employees to utilize digital tools and collecting information to monitor the performance of employees and make better business decisions.
3. Business models
Business models changing the way businesses operate by enhancing physical offerings through electronic tools and solutions while introducing digital products and utilizing technology to offer global shared services.
What is the Importance of Digital Transformation?
Although every digital transformation has its unique objectives, the main goal for any transformation initiative is to enhance the efficiency of your current processes. Digital transformation is crucial as companies need to adapt to stay competitive. If you’re not advancing and advancing, you’re in the wrong direction.
Let’s examine a recent case that illustrates the vital aspect of the digital revolution. Southwest Airlines.
The holiday season was a bit hectic; an intense winter storm hit the US on December 21 which led to major cancellations for the airlines. But, just as all other airlines were capable of getting passengers to their destinations on the following day. Southwest had to cancel 15,000 flights by the 22nd of December as well as continuing to cancel more than 250 flights every day during the following week.
Who is responsible for this mess?
The system was a 10-year-old scheduling process that has already led to minor problems and which had been the subject of the Southwest Airlines Pilot Association union warning the airline about since the early 1990s.
Southwest was unable to maintain its IT infrastructure and software updated, which cost the company millions of dollars in revenues, a lot of negative press, and ruined the image of the company with its clients.
However, while digital transformation is essential to prevent IT breakdowns, it’s so easy to upgrade legacy systems.
A Bain & Company study shows that “only 8% of global companies have been able to achieve their targeted business outcomes from their investments in digital technology.” One of the strategies that set leaders apart is the fact that they focus more on the transformation of their companies instead of managing them.
Digital transformation is crucial because it allows businesses to be flexible in the ever-changing industry and constantly improve how they conduct business.
For businesses, this means constantly looking for ways to improve the user experience. This could include providing training on demand or transferring data to cloud-based services, using the power of artificial intelligence, and so on.
Do you want Digital Transformation in Your Business?
The Benefits of Digital Transformation
The ROI of digital transformation is contingent on a myriad of elements but the right technology can significantly improve how your company functions and also the way customers interact with it.
1. Enhances productivity and reduces the cost of labor
Utilizing technology to perform more efficiently is among the most powerful ways to enhance your company. For instance, for large businesses, the amount of time and money they invest in training new employees as well as updating their digital assets can go out of hand. With the right tools, it is possible to maintain costs low and efficiency up.
2. Enhances customer experience
Tech-savvy customers need a pleasant experience via many touchpoints- mobile apps and social media, emails, and live chat. Transformations in technology are the primary driver behind improving customer experiences.
3. Catalyst for the development of technology and keeps you ahead of your competitors
Your competition is exploring digital transformation, regardless of whether or not you’re. Refusing to accept digital change is choosing to accept being out of the game.
Important Article: Digital Transformation in EdTech Sector – Benefits and Drawbacks
Most Important Aspects of Digital Transformation
To successfully transform, ensure that you keep the momentum of your project moving towards your business’s ultimate goals. To achieve this, you must continuously examine the major elements of the digital revolution: digital twins’ privacy and culture, augmented intelligence, and management of digital products.
Based on Gartner, CIOs need to concentrate on these five areas to ensure successful digital transformations for their businesses.
1. Digital Twins
Gartner defines digital twins in the form of “a virtual representation of an actual-world entity or system. The digital twin is an encapsulated software item (or model) that mirrors the unique physical object, process or person, or some another abstraction.”
Digital twins are a great tool for digital transformation since they enable experimentation and gathering the information that helps make better business decision-making.
If you aren’t able to manage the privacy of your online transformation, it is likely to be unsuccessful. As more and more digital tools are made available to businesses, they tend to be quick to adopt new technologies that promise greater convenience. Gartner’s research shows that a significant portion of both employees and consumers do not want to sacrifice security and security to gain convenience. Customers and employees will not be supportive of any change if they believe they are being violated by it or their privacy and security of personal data.
Resistance to change is a natural human response. If you don’t consider the cultural aspects of a digital revolution, you’ll hit the walls of resistance very quickly. In fact, 46 percent of CIOs claim that culture is the largest resistance to change. The way to address culture will ensure you get an internal commitment to your digital transformation plan. When you have change makers who are vocal supporters of your digital transformation they can utilize their voices to propel your project to the next level.
4. Augmented Intelligence
Augmented intelligence is more than Artificial Intelligence (AI) that allows both machines and humans to work in tandem. AI’s data analysis and collection capabilities are superior to the human workforce. However, augmented intelligence doesn’t mean replacing human workers with machines it’s about enhancing the knowledge of people. AI gathers and displays information in a manner that lets people increase their knowledge.
5. Digital Product Management
Gartner describes Digital Product Management as the changing of thinking from product to project. These products have to be created to improve customer satisfaction and delivered via digital channels. Management of products in digital form is all about understanding your market and creating products that are suited to it. For instance, instead of waiting for the health industry to be aligned with Apple’s offerings Apple designed a watch that monitors the fitness levels of its wearer.CIOs who concentrate on these five factors can keep ahead of the pack by continuously improving and expanding their business.
Why Digital Transformation Projects Fail
Digital transformations fail for a variety of reasons, but the majority of problems can be traced back to the three digital transformation problems such as communication, people, and measurement.
The people you choose to work with can be the difference in any digital change. Keep in mind that culture is an important driver for digital transformation, and also among the 6 pillars that make successful initiatives. If you don’t have enough emphasis on the people and their culture, your project is likely to be a failure. Sixteen of McKinsey’s 21 key elements to the success of digital transformation revolve around people.
2. Poor communication
An announcement of a digital transformation project is not the same thing as sharing the news with your team members about the initiative. Sometimes, leadership just orders changes but doesn’t take the time to explain why and the way to do it. If you don’t give clear and concrete guidance before and during, or even following a transformation the initiative will not succeed in achieving its goals.
3. Inadequate measurement
It’s impossible to have success in your digital transformation if you fail to establish what “success” is to you. Some companies think they can measure performance based on key performance indicators (KPIs) they’ve set up for their businesses. However, if you’re transforming the way you conduct business it’s necessary to establish additional KPIs to track the results.
How to Begin with Digital Transformation
The digital strategy provides a strategy of action to initiate analysis, planning, and driving the digital transformation process ahead. The strategy you choose to implement will determine the objectives you want to accomplish through digital transformation.
A successful digital transformation plan will provide a structure for you to follow during the constantly evolving process. Before you start you must know what you’re hoping to accomplish to be able to identify KPIs that you can track throughout the process.
For instance, if you’re migrating customers from Salesforce Classic to Lightning, the most important metrics to measure the level of adoption are log-in rates and usage, as well as data quality and business performance.
In this scenario, it is possible to drill further and track the results, such as:
- Volumes of sales for the month
- Opportunities are created
- Productivity of sales (e.g. time saved, the volume of sales activities per rep)
- User log-in rates
- Account of a prospective client with key fields filled
A well-thought-out strategy should also be able to consider how the changes will impact your customers as well as your employees. Begin by creating change leaders that will publicly endorse your change. The choice of trusted change leaders who are in the charge of announcing and encouraging the change will help create momentum. Involving everyone affected by the transformation can also ensure that the momentum is maintained.
Be sure to record the achievements of your team in your monitoring of progress. If you’re not highlighting a quantitative accomplishment, e.g., a 10 percent increase in login rates, or qualitative, e.g., Beth established a Slack group to answer questions regarding the transformation process, acknowledging milestones in the process is crucial.
Employees and customers alike will look to the individuals who initiate the transformation to learn the skills they require to be successful. It’s your responsibility to supply the tools necessary.
The tools could be available in a variety of types, but if you’re undertaking a digital transformation there are likely digital resources that could help your journey. Do you plan to utilize e-learning programs for learning? Video tutorials could help users study at their speed.
Be aware that changes are a process of evolution, therefore using tools that can change quickly, such as digital platforms for adoption, may help you save time and energy in the future.
Related Article: An Ultimate Guide to Enterprise Digital Transformation
Are You Looking for Digital Transformation Services to Revamp Your Business Structure?
Different types of transformations are popular and decrease in popularity as technology evolves. Being aware of the latest current trends is an excellent way to assess ways to enhance your digital transformations and be prepared for the inevitable changes to your field.
Today, the most popular developments in digital transformation have one common theme which is improving the service for employees and customers. Though many people, employees particularly, worry that certain technologies are meant to replace human workers and humans, the most successful digital transformations utilize technology that is compatible with human work, that is supported by iTechnolabs.
AI, Robotic Process Automation 5G, mobile app development, and personalized user experiences are just a few examples of these digital strategies that intend to collaborate with humans to accomplish all things from improving the way we communicate, to limiting repetitive tasks.