Digital transformation refers to the strategic use of digital technologies. It is used to increase productivity and deliver better customer and employee experiences, manage risk and control costs. There are many tools, solutions and processes that enable digital transformation. A customized strategy for every organization is the best way to create an effective strategy. Without a strategy to strategically adopt technology, few organizations will be able to withstand the test of time.
Why is digital transformation so important?
An organization’s ability and willingness to adapt quickly through the use of new technologies is key to staying competitive in a changing global market. IDC projects that global spending on technologies and services to enable digital transformation will exceed $2 trillion by 2022. At its core, igital transformation is about engaging customers through multiple channels. Organizations that embrace it are more focused on creating delightful experiences for their customers. Those who don’t embrace digital transformation risk being left behind.
Digital transformation plays a key role in:
- Customers experience: Today’s consumers have more options than ever. Businesses must not only offer innovative products and services, but also provide meaningful interactions and experiences that will delight customers and build brand loyalty. Think about all the options available for food delivery today. The reason you choose one or the other may be due to a company’s digital prowess. This could be a simple app, seamless transactions, fast delivery, or customer service.
- Employee experience: It’s not about giving your workforce the most up-to-date apps and devices. It’s about creating an easy, modern, and more satisfying experience for your most important asset, your employees. Research shows that employees who invest in their experience are more productive and engaged. This translates into a better customer experience. Organizations can use digital transformation to provide the tools they need and instant access to all of their information from anywhere.
- Process optimization: The ability to seamlessly work on the backend is key to an organization’s ability deliver exceptional customer and employee experiences. Organizations can improve efficiency by streamlining workflows, automating tasks and well defined and executed processes.
- Product digitization: This is the use of digital technology to improve a product or service. For example, smart-connected devices or voice-activated products can offer novel customer experiences. Companies that stay at the forefront of technology allows them to adapt to rapidly changing consumer needs and create new products.
Who is responsible for digital transformation?
Digital transformation projects were initially viewed as an IT initiative. However, digital transformation has become synonymous with business transformation. This is a crucial aspect of gaining leadership support for any digital transformation initiative. It is also important to show how technology investments will directly impact your bottom line.
Digital transformation is led by IT and HR
IT has had to change from a fix-it mentality to become a strategic business partner, responsible for driving organizational change. Because customer and employee experiences are so closely intertwined with IT, IT and HR share a common stake in the company’s digital transformation.
It’s not about just providing the latest technology. It’s about making technology more meaningful and efficient so that the company can retain the employees it needs and improve its business results .
A report by Economist Intelligence Unit found that IT and HR executives feel equally responsible for improving employee experiences (74 percent and 75%, respectively) . To ensure that technology supports people’s needs, the CIOs and CHROs need to work closely together. This involves collaborating on objectives, planning and cross-functional skillsets.
Digital transformation is a collaboration between employees and employers
IT and HR share responsibility for planning and implementing employee experience and digital transformation initiatives. However, it is important to be clear about employees’ needs. This can be done by holding regular surveys of employees or focus groups that are conducted on an ongoing basis.
What is a successful strategy for digital transformation?
There are many success stories in digital transformation across all industries. Netflix is one of the most famous examples. Blockbuster, the company’s largest competitor, wasn’t ready for Netflix’s digital challenge. It took seven years for the company to create its own DVD-by mail service. Netflix had already begun offering digital streaming in that period. Netflix’s ability to quickly offer digital solutions to customers was key to its continued success.
Retailers like Target and Walmart have implemented digital transformation strategies in order to expand their online reach and compete against Amazon. Walmart and Target were able leverage their brick-and-mortar locations as convenient pickup and delivery points for customers who prefer shopping online. These large e-commerce businesses not only increase revenue from in-store customers but also expand each brand’s reach to areas where there is less competition.
Digital transformation is happening even in educational institutions to provide more flexible learning opportunities. Indiana University has, for instance, replaced its outdated computer labs by a modern virtual environments in which students can access educational applications from anywhere.
A successful digital transformation strategy brings you many benefits
- Increased mobility. Not only are consumers spending a lot of time on their mobile devices every day, but also employees are constantly connected to their smartphones, tablets and laptops. Mobile solutions for agile companies are essential to provide the same experience in the workplace as the mobile devices they use. Modern enterprises must expand their end-user experience to include mobile platforms.
- Data security. Effective digital transformation projects can help an organization support its commitment data security, particularly in the age of connected devices and big-data. Stakeholders must be aware of the data sovereignty responsibilities and ensure that user information is protected, particularly when they are entrusted to large amounts of sensitive information. Companies may be subject to several international privacy laws. These laws should be considered in any strategy for transformation.
- Improved user experience. Businesses have begun to adopt new technologies to increase worker productivity by using simpler interfaces and intuitive interactions. Even if the backend of enterprise applications is efficient, cumbersome interfaces can make it more difficult for employees to do their jobs.
What are the most common challenges in digital transformation?
1. Failing to develop a strategy
Digital transformation isn’t a one-and done project. Digital transformation is an ongoing process that needs to be nurtured and improved. Technology that isn’t integrated into the larger picture will create more problems than it solves. The vision for digital transformation must be embraced and all projects should follow that vision. It is important to consider your business goals and objectives when defining your vision. This will help you determine how a digital transformation strategy can assist them.
2. Insufficient leadership buy-in
Engaged leadership makes any business transformation digital or otherwise more likely to be a success. Leadership is more likely to engage in projects that align with the business strategy. You can avoid budget problems that could impact your project by securing the support of your leadership.
3. IT Silos
In the past, digital transformation was handled solely by IT. This is now a cross-functional endeavor across the company, so leaders and employees must be involved.
4. Employee Engagement
Leaders who implement technology without engaging employees risk investing in tools that do not meet their company’s needs. To ensure the solution is effective and doesn’t create new problems, leaders need to understand how end-users experience it. In the initial stages of any new investment, decision-makers should talk to employees about their experience with the current system. This will help them gain insight into the potential improvements. During the implementation of the new technology, stakeholders should continue to seek feedback from those who use it. The feedback loop will provide valuable insights that will help with future transformations and contribute to an improvement cycle.