When it comes to business, small companies and huge enterprises should quickly react to the latest changes in their field, technologies, marketing strategies, etc. They should be able to adapt to current trends and successfully implement them into the workflow of their system.
The faster and wisely you respond to the changes, the more chances you get to succeed in the future. Marketing and business overall are not static, and it is essential to keep up with trends, use them for your company, thus gaining more customers and revenue. Nowadays, businesses go through digital transformation. What is it? How can it benefit your business?
Let’s dive into the details of this topic.
Digital Transformation Definition Explained
Digital transformation is an integration of digital technology solutions into the work of the company. Although the term is mainly used about business, it is also applied to government, mass media, culture, medicine, science segments of society. It changes the way the company works and elevates the customer experience. Digital transformation is also used as a synonym to “paperless,” meaning that all the data is digitalized and stored in the company’s system.
The implementation of these solutions into your business will affect every department and all the operations that are carried within the company. It will change the way your company functions internally and externally. Thus, going through digital transformation successfully will bring value to the overall business workflow and customer experience.
Digital Transformation Examples: You’ve Already Seen Them
If you think that you haven’t seen any digital transformation examples, you are wrong. The change might be slow, but it happens. For instance, have you shopped on Nike’s website? You can check it if you didn’t. The first thing that impresses most is that you can create your own design of the shoes online. Thus, the user experience becomes more personalized, and the company can offer the best options available to suit the customer’s taste. What is more, there is no vendor involved in the process, and customers buy the products directly from Nike.
Another bright example of digital transformation is Disney. A few years ago, they were falling behind, but the company has come up with the idea of buying streaming services and turning Disney into the online platform, where you can watch movies. As a result, they are back on track and managed to increase their revenue.
One more example is Microsoft who has shifted from traditional software to cloud-based and managed to survive the competition with Apple and Amazon.
The examples of digital transformation can be found everywhere nowadays affecting every area of human activity.
What’s the Difference Between Digital Transformation and Business Transformation?
When it comes to business and digital transformations, the first one is a broader term that incorporates other transformations. It means that when a company wants to keep up with the latest tendencies that are appearing daily and wishes to deliver better services, have a better workflow, and better communication with customers, it has to go through a business transformation.
So, a business transformation involves all the changes in every department of the company and consists of:
– digital transformation (mainly is directed to facilitate and enhance the customer area of the company or inner company organization);
– IT functional transformation (focuses on how the work is done within the IT department of the company);
– enterprise transformation (directed on how the work is done within the company).
To put it in other words, a business transformation requires to set new business models that much depend on modern market demands. While digital transformation is about how this model can work and what tools and solutions are necessary to make new strategies work in the best way possible, meaning facilitating business-customer area of work, business-business cooperation, as well as inner company system organization of work (business-employee). Digital transformation is focused on technological tools and solutions that can deal with operational problems to reach the goal of business transformation.
Digital Transformation Framework: The Guidelines
To successfully implement and use new technologies, you have to come up with the guidelines. In other words, you need a blueprint, which is a digital transformation framework, with a detailed description of the process, parties, and components involved. It is a supporting structure around which you can build-in new technologies, and you can flawlessly move from one thing to another according to it along the way to digitalization.
Digital transformation framework involves four components:
– Processes and systems;
It is important to note that no specific framework will work for all the existing businesses, but there are essential components that should be taken into consideration. Thus, the CEO of the companies can analyze the data they have and create an individualized framework for their business. For instance, customers are an essential part of every business. Learn more about your customers. See what they like or dislike by going through the information they search for. This information is vital for modern businesses as they can use this data in digital marketing and personalize services, and as a result, enhance the customer experience.
Apart from better customer experience, the information you get from them can be used to enhance the products and make them suit customers individually. The same goes for services and processes. You can provide personalized service by taking into account the data you have about the clients and lead them through the whole purchase process.
Apart from this, think about how you can empower the inner company organization. You can improve logistics and employee experience by using digital technologies (like cloud, IoT, AI, etc.). By choosing automation and standardization, businesses can stay agile and quickly respond and adjust to the latest changes, as well as maintain and increase the profit.
To create a successful framework of digital transformation define all the important aspects of your company that stand behind these four components.
Digital Transformation Roadmap
The moment you set a framework of digital transformation, you can start building a roadmap of the process. To make it easier, remember that there are three main stages that should be outlined and divided into smaller steps in the roadmap. Here they are:
Stage 1: Defining value. This stage involves securing senior management. It’s the first step. You have to make sure that everyone in the company is involved in the process and takes an active part in it. Gather board meetings with management, as well as different departments of the company, to define the goals of the transformation. Make them challenging and motivating. The last but not least step on this stage is the budget. Allocate funds on the resources and technologies to be used.
Stage 2: Launching and maintaining a digital transformation. First, think of the lighthouse projects you can launch at the beginning of the transformation process. Once they are tested and operate at their best, you can follow up with the related projects to continue the transformation. Next, gather high-profile professionals in your team who will have all the necessary skills. Moving further, think of the new agile ways of the work organization.
Stage 3: Scaling up. From now on you have to continually upgrade and innovate the technologies you use as they develop and continuously offer new features and capabilities. Apart from technology, your employees should also be appropriately trained and be able to acquire new skills. And the last thing that should be included in the roadmap is the adoption of the new operating model. From now on, the focus will be shifted to new centers, so the model should suit them.
Digital Transformation Technology: What Can Be Used?
Digital transformation for businesses of different industries is necessary due to all the emerging technologies. These technologies change the way companies function and organize their work. They help to deliver better user experience, as well as bring more revenue for the business.
Today we have several technologies that can be implemented into the company’s system. Each technology can be tailored to the needs of your business and level up the services you provide. There are certain tendencies in the technology used for the digital transformation of the enterprise, this list includes:
– Cloud Computing
Cloud computing can be the first thing to consider when embarking on the path of digital transformation. There are several good reasons for this. Think about how you can improve internal and external processes, operations, and services. Cloud computing has the required infrastructure, platforms, and computing abilities, thus helps you stay agile in your business field and ready to embrace the latest changes in the world of technology. Taking this into account, Cloud computing is cost and labor effective, secure (you can omit system shutdowns and create several backups). Scale and speed come with Cloud computing, two essential things the company needs to move towards digital transformation nowadays.
– Artificial Intelligence (AI)/Machine Learning (ML)
AI and ML, when properly used for digital transformation, can help businesses gain additional income and reduce time spent on executing day-today activities. ML is capable of analyzing big and complex data and making accurate decisions based on the available information. Thanks to the implementation of these technologies there is less room for errors and more for impeccable high-quality service.
Blockchain is a powerful asset for the companies that are heading to digital transformation. The use of this technology will facilitate transactions, eliminating the third party in the process, thus making it easier and more transparent both for partner businesses and clients. The point is to make decentralized ledger that will reduce transaction time and cost, as well as will be more secure.
– Augmented Reality (AR)
Augmented Reality is a technology that can change and boost operational activities of the departments and enhance the competitiveness of the company on the market. AR gives a chance to see inside of the objects (for instance, machines, bodies, etc.) without opening them and have a full description of the problem found inside. It can be applied for product development, maintenance, and safety measures.
– Internet of Things (IoT)
Another way to make a digital transformation is to use the Internet of Things (IoT). Like the previous ones, this technology brings a lot of benefits to the business. For instance, it opens several new opportunities for the company thanks to the collected data that can be used to understand your customers and their needs better and, as a result, offering them better services. Also, IoT can help you expand the circle of your target audience. In addition, it improves employee productivity and reduces costs, as the processes are automized.
Think of the technologies listed above and how they can be useful for your company.
Digital Transformation Process: How Is It Done?
Digital transformation cannot be completed in one day. It’s rather a continuous process that involves a lot of work. Any process involves several stages, so you should think about the strategy for your company, the execution part of the process, and its outcome. Setting a plan is ⅓ of the process, but going digital without one is a lost cause. Here are the steps you should follow to outline the process of digital transformation:
Step 1. Analyze the current state of affairs within the company and outside. It is important to understand where you stand at this very moment, know your strong and weak sides. Check how the competitors are dealing with the similar problems you face.
Step 2. Set up transformation objectives. What do you want to see as the final result? What is the goal of the company? Which operations, departments, or processes should be renovated? These are the essential questions you have to answer before moving to the next stages of the process. Involve your employees into the process as much as possible, as they do certain activities daily and know all the pitfalls or inaccuracies.
Step 3. Choose the right technology and outline the budget. When thinking of the technology to be implemented into the work of the company, provide thorough research. The technology should suit the needs of your company, employees, and clients. Communicate with the vendor and set close relationships for further collaboration, as support of the system is as important as its development or implementation. Make sure the technology is scalable, so you can continue to grow if some part needs to be innovated or changed.
Step 4. Create a clear roadmap for the process and prioritize the activities. Access the capabilities of the company, resources, budget, identify changes, and do a cost-benefit analysis. Then, logically prioritize activities.
Step 5. Identify and train your team. Choose employees and create teams that can execute the implementation of technology. All the changes that are going to be made should be demonstrated to the employees. It is important to educate your staff, so can do digitally transformed business, once the system starts to operate differently.
Step 6. Implement the changes. Do everything that is required to incorporate the technology into the work of your company, run tests, and add additional changes if needed.
Step 7. Provide ongoing support of the new technologies and use new features to scale up the performance of the system and services.
Benefits of Digital Transformation: How Is It Useful for Your Business?
Taking into account the information stated above, we can highlight several benefits that come with digital transformation. Although the process can be time-consuming and require a lot of resources to be completed, still the advantages it offers, cover the expenses.
So, what are the benefits we get with the digital transformation of business?
1. Less manual work as operations and processes will be automized, thus making the overall work more efficient and almost flawless.
2. Reduced time spent on day-to-day activities, as the system will be automized.
3. The client’s satisfaction will grow. It follows from the benefits listed above. Flawless and quick service will win the hearts of your clients and more likely make them your regular customers.
4. Increased revenue. This advantage is also a result of the listed above. Reduced time and errors in the process save up a lot of funds, and loyal clients will bring more revenue.
These are four significant benefits a digital transformation brings to businesses, both small and large ones. Of course, the list is not complete, as everyone will find something different for their own business.
Future of Digital Transformation: What Is Next?
Digital transformation is a rather new concept for now, and it only starts to develop and penetrate different business fields and spheres of human activity. We already know the benefits it possesses and can only imagine how it will look like in the future, as the technologies constantly upgrade, evolve, and acquire new features.
The tendency mainly prevails in IT and financial spheres, but it has a lot of potential and can be used to improve government matters, health, and insurance, retail, education, etc. Companies should take a serious look at digital transformation and make use of it for their systems to survive current and future competitions, keep their clients and increase revenue.