There are multiple definitions of the term ‘Digital Transformation’ and not all of them read the same. That made me delve a little deeper and understand what Digital Transformation really means to the world and the key to success in the journey of Digital Transformation.
Some of the well-known and prominent companies in the world are in the midst of digital transformation. Why won’t they? After all, technology is the biggest thing in business today. And putting technology in business transformation is what we call Digital Transformation, need of the hour today. In simple terms, it is transformation that’s enabled by technology - the transformation of customer experience, innovation, operations, business models, teams and culture. It is reimagining and digitizing the processes and the customer journey of an organization, rather than digitizing existing processes or journey. The top benefits of digital transformation are; improved operational efficiency, faster time to market, and the ability to meet customer expectations.
Now, companies that need to undergo digital transformation will require time, leadership, money, and investments in all aspects. It may not seem easy to undergo digital transformation, but the time to do this is actually NOW.
There are 2 aspects companies need to think through to ensure the successful adoption of technology, to transform their businesses.
- Leadership capabilities for managing digital transformation initiatives instead of solely implementing new technologies
- Physical investment to transform the customer experience, operational processes, and business models
When we say leadership capabilities, we mean transformational leadership wherein the digital leaders envisage the transformation and customer experience they want to bring in. This is just as important as investing in technology.
Then there are those organizations that without foreseeing or thought leadership invests in everything that comes with the label of advanced technology – like mobile apps from different vendors that will invariably do the same things across their business entities spread across the globe, with little or no governance. Here’s an example of what a company can do while adopting a digital workplace – they can audit the different apps their employees are using to complete their daily tasks, the time taken to switch between multiple apps, assess if these apps are doing different tasks, etc.
There are 3 key areas of Digital Transformation:
- Customer Experience – Understanding and reimagining customer touchpoints, customer understanding and envisioning top-line growth
- Operational Excellence – Reimagining the core process and its digitization, worker enablement and performance management in terms of the data flow in the organization
- Business Model – Reimagining new digital business, digital globalization and building new business models keeping technology first
Transforming operations will bring in operational excellence that will be driven by technology thus paving the way for innovation and excellence. Industrial Revolution 4.0 has brought in technologies like IoT, IIoT, Big Data, artificial intelligence (AI) & machine learning (ML), Robotic Process Automation, Intelligent Automation and so on. If your organization has not explored these technologies yet, you may be falling behind.
Another important area is the business model. Statistics by a leading firm says 60% of companies that have undergone digital transformation have created new business models, and even more importantly, 56% of CEOs say digital improvements have led to increased revenue.
Beyond all this, there is one crucial point. Putting customers, their data and experience, and the customer journey at the heart of the process is key for any digital transformation. The company's competitive edge comes from its customer experience.
If you want to analyze the ROI of your investment in digital transformation, you need to carefully establish the prime objective or motivation of doing digital transformation right in the beginning – whether it is enabling transparency throughout organization, improving employee engagement and collaboration, boosting operations efficiency, increasing productivity or anything else. Accordingly, derive the right metrics to measure the success, and align it to the organizational goals. Keep the customer data and customer interactions at the heart of this analysis.
Again, do not misunderstand digital transformation to be only about internal operations, customers, business model. It is about constantly refining and enabling the entire ecosystem of your business, keeping customer experience at the heart of this ecosystem – by implementing technology.