Digital transformation is something every CEO, employee, and layman has heard of- LinkedIn posts, news articles, and blogs cannot stop raving about the importance of digital transformation for your business. But let’s be honest, how many of us know what digital transformation entails? Is it a change in your business model or how you operate? The truth is that digital transformation is both of those AND a cultural shift.
The truth is that there isn’t a one-size-fits-all definition, and Digital transformation can look different for different companies. Success lies in analyzing the operations of a business, identifying opportunities for innovation, and having a strong bias for action that promotes experimentation and implementation of new ideas to improve customer experience. This zeal to change is often hindered by the hesitancy of organizations unwilling to walk away from their comfort zone- outdated systems, redundant technologies, and slow processes. And this leads to stagnation which is a recipe for disaster waiting to unfurl its wrath.
Digital transformation emphasizes three pillars of change- leveraging technology to enhance business capabilities, building operational efficiencies, and constantly improving customer experience.
When the Greek philosopher Heraclitus said that change is the only constant, he wasn’t thinking of companies in today’s market looking to transform themselves digitally, but the truth remains. In a highly disruptive market, it’s essential for companies to constantly reinvent themselves, boost operational efficiencies, and have a competitive edge over others. This involves being prepared for a cultural change- an affinity to challenge the status quo, getting comfortable with innovation and experimentation, and embracing failure if needed. According to Gartner, 91% of businesses are engaged in some form of digital initiative, and 87% of senior business leaders say digitalization is a priority.
Digital transformation comes with its own set of hurdles. From management that rejects change to employees unwilling to upskill and learn something different, friction comes from all angles.
Upper management can reject change in business processes and be opposed to developing new systems and methods. Leaders’ passivity in the organization can make the company lag behind in its journey to digital transformation.
Very few organizations understand the payoff that investing in digital transformation can bring about. A common reason companies cite for being opposed to digital transformation is budgetary constraints, but very few realize the long-term benefits it can bring.
Often, digital transformation is associated with tremendous confusion because organizations embark on this journey without a clear objective in mind. Melissa Swift, who leads Korn Ferry’s Digital Advisory for North America and Global Accounts, says that “digital” is a problem because it means different things to different people. “Say ‘digital’ to one person, and they think of going paperless; another might think of data analytics and artificial intelligence; another might picture Agile teams, and yet another might think of open-plan offices,” she says.
Outdated systems hinder growth. While it is crucial to embrace innovation, it is also essential to do away with obsolete systems and legacy technologies. The time and money spent on updating old systems can be diverted to building innovative systems that will yield long-term results and trickle down to better value add to customers.
Indeed, digitally transforming a business isn’t easy, but a clear objective helps smooth the transition.
Your current business model may not fetch the expected results, especially in a post-pandemic era. You want to change or diversify your business model to adapt to current trends. When the pandemic hit, many companies had to move from being retail-first to being digital-first. Once you know that your business model needs to adapt to current changes, you’ll be able to map the road ahead.
All businesses have a profit motive, and cutting costs is an essential part of this. The usage of legacy technologies may keep the employees comfortable. Still, rapid innovation and transitions to new-age tech can become a game-changer when competing with newer startups disrupting the market. Essential resources utilized in maintaining these old systems can be deployed in innovation and experimentation.
Customer experience can never be replicated, which makes it the hardest to master. Digital transformation can aid in standardizing and reducing human error pertaining to customer experience. From simple feedback loops to common queries that can be answered through bots, digital transformation sits at the forefront of excellent customer experience.
No one shoe fits all. It would be not very careful to cite metrics that can vouch for the success of your organization’s digital transformation journey. And thus, it’s essential to personalize KPIs based on the business and functionality.
Many KPIs point toward the success of a business, but very few genuinely indicate the success of digital transformation. It makes good business sense to assign weightage to each KPI in terms of importance. For example, a retail first clothing store looking to move online can measure its success in many ways—namely, its shopping cart abandon rate, site traffic, or even the net promoter score. The secret to an accurate analysis lies in understanding the business’s stage, considering that the store has just built an online presence. Site traffic as a KPI may carry more weightage than the other KPIs.
Having a clear end goal helps streamline your business’s digital transformation. Understanding the business benefits that digital transformation can bring about, the customer value that it can add, and the role that the various stakeholders play in the journey significantly contributes to the overall success of your company.
People can make or break an organization. It’s imperative to ensure that digital transformation is not just a change in business operations but is also a cultural change. This involves higher management making active decisions to innovate, upskill and experiment, and employees being trained adequately to meet challenges as and when needed. Clearly defining expectations from various stakeholders aids in a smooth transition.
A large part of digital transformation is acquiring new, savvy systems. But true success lies in simplicity and making the existing processes more robust. Instead of wasting precious resources on figuring out completely new techniques, it makes more sense to map existing business processes.
Also Read: Digital Transformation Demystified !!
Your roadmap to digital transformation may look completely different from someone else’s, but it’s essential to keep the vital ingredients constant.
Identifying the business’s current strengths and weaknesses to enable digital transformation is crucial to building a robust objective that is to be achieved. Assessing the present scenario is key to making changes to move forward.
Identifying relevant technology is critical- it can make or break your organization. Automating workflows may seem trivial, but it can make all the difference. For example, choosing no-code platforms to automate workflows is much simpler, less costly, and more efficient when compared to hiring talent specifically for the maintenance of relevant tech.
Successful digital transformation is a cultural change, just like a business change. It’s imperative to train employees to adapt to this change and provide adequate resources to upskill.
Constant reassessment of projects is necessary if a business truly wants to gain a competitive edge. Digital transformation isn’t a task; it’s an ongoing process that requires constant innovation, supervision, and feedback.
It’s impossible to think of digital transformation without considering the difficult transitionary period of change. But digital transformation is less about technology and more about a change in mindset and culture- when all the stakeholders related to the business get on board to reinvent old systems, adopt new technology and take the initiative to simplify workflows, the effect can be spectacular.
When companies execute projects with agility, they can deliver high-value solutions to their customers, delight them more accessible and faster, and save costs while they’re at it. There is no right or wrong way to transform a business digitally, and that’s its beauty. The key is to understand business goals, find ways to constantly innovate, and never shy away from adopting technology to build operational efficiencies. To stay relevant in a digital-first world, it’s essential to become digital and move away from legacy technologies. After all, even a caterpillar has to come out of its cocoon to become a butterfly.
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