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Accelerating Digital Business Transformation (Part 1 of 2)

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Accelerating Digital Business Transformation (Part 1 of 2)

photo - Digital Business Transformation - Part 1

In this digital age, we are witnessing a more agile and innovative business landscape. The progress of digital technologies is greatly affecting the business processes and the pace of its growth continues to accelerate. Digital transformation is an impressive, exciting journey. Its profound impact in our daily life and the society cannot go unnoticed.

In this part one of a two-part article, we will discuss the significance of digital transformation, how it has evolved in organizations, and how it has affected customer experience.

Speeding up Innovation and Transformation

Many companies across the globe are embracing digital transformation, with a large percentage putting it at the center of their corporate strategy. While there are companies who are still conservative with their approach to digital transformation, many organizations view speed as a crucial strategy to take the lead. The technological evolutions across various industries are happening at a fast rate, and the disruption, innovation, and changes they bring in many areas (business models, regulatory frameworks and customer behavior) are also accelerating fast.

This exponential speeding up of innovation and transformation paved the way for a digital transformation economy. It is more than just revving up disruption and changes; it is accelerating innovations.

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Reshaping Modern Enterprises

It is worthy to note that digital transformation does not only occur in tech-based companies. A few disruptive organizations like ‘Uber’ have been cited as examples of enterprises that strategically use digital technologies to change the existing business models. Digital transformation also affects business operations. Technology success stories happen in all industries around the world.

A McKinsey analysis explained that digital transformation has an impact on every aspect of modern enterprises including the following:

  • Customer experience – digital applications offer seamless multichannel platforms and limitless connectivity
  • Product and service innovation – innovation of business and operating models result to new products and services
  • Distribution, marketing and sales – digital augmentation of traditional channels deliver concrete business improvements; digital marketing offers higher return on investment
  • Digital fulfillment – automation of manual activity replaces labor with technology, allowing full straight-through processing
  • Risk optimization – big-data insights enhance customer targeting; automated controls and risk profiling drives asset and resource utilization
  • Corporate control – improved management information systems boost corporate control and advanced analytics, which allows better decision-making

With digital transformation, all these aspects are interconnected. There is no room for silos, be it from technological, process, or people perspective.

Focusing on the Realities of Digital Transformation

In the face of accelerating technological changes, many organizations confront the challenge of choosing the right way to move forward, digitally. To fully benefit from digital transformation, organizations should focus on their core business, technology, and customer challenges. To avoid making unfortunate and costly decisions, business leaders should know that many perceptions about digital transformation are actually just myths.

The following are the digital transformation realities, according to Capgemini Consulting.

  • Digital opportunities also exist in efficiency, productivity, and employee leverage, not just customer experience.
  • Opportunities exist in all industries, not only to technology and B2C companies.
  • Digital transformation is led from the top; bottom-up activity is the wrong way to go.
  • Transformation management intensity is the right approach; doing digital initiatives is not sufficient.
  • Business and IT relationship is crucial and must be improved if it is lacking; digital transformation will not happen if only one party is highly active and involved in achieving the goal.
  • Digital leaders have a common DNA; the approach to digital transformation is the same for every industry. To be digital leaders, executives should not wait and see how their IT initiatives grow; they should outperform their competitors in the industry. Be the disrupter instead of being disrupted.

Elements of a Successful Digital Transformation

To effectively execute digital transformation, organizations need to look at several elements including the following:

Change management

In all digital transformation projects, there are several opportunities for change; and change management is critical. In the face of changes and key opportunities, companies must act decisively and quickly. Moreover, organizations need to leverage big data analytics to gain optimum benefits from their digital investments.

 

Goals and priorities

Business goals and priorities matter a lot in any digital transformation projects. They drive the steering wheel to success. Since transformation cannot be planned fully in advance, business leaders should know how to set priorities and the senior team should share the same vision on how to proceed. The business environment will keep on changing, and the next steps will evolve with these changes while keeping focus on the ultimate goals.

 

Digitization is not the same as digital transformation

Digitization or the process of converting information on paper into digital formats then into processes is not equivalent to digital transformation. While digitization is absolutely necessary for digital transformation, the process does not end there. Digitization in many business areas must be accomplished. There must also be a strong connection and communication between the back office and the front end.

 

Silos, responsibilities and skills

It is crucial to look at these aspects in order to successfully execute digital transformation.

  1. First, digital transformation is about interconnectivity and collaborative methods, requiring the team to work across silos instead of focusing on just one silo.
  2. Second, the responsibility for all initiatives and efforts is also another important element – whether it is the Chief Digital Officer, Chief Information Officer, Chief Technology Officer, or even the Chief Marketing Officer, who should take the lead.
  3. Third, it takes more than just being digital-savvy to successfully implement digital initiatives. Having the right skill sets and experiences through cross-departmental exposure help a lot in understanding and executing the whole digital transformation process.

Customer Experience: The driving force behind digital transformation

Digital transformation involves several stakeholders, including the customers. It is no surprise that customer experience is regarded as a catalyst for digital transformation initiatives. Digital leaders can significantly boost profitability and command a clear performance advantage by enhancing and transforming customer experience. While technologies enable the transformation and affect customer behavior and expectations, it is the people and processes that drive digital transformation. And in the customer experience context, the people dimension is the most important aspect.

 

Modern technologies advance rapidly in the business environment. Digital transformation is happening in many organizations worldwide. Both consumers and employees are using digital innovations that have created a great impact in our daily lives. This phenomenon is transforming not just business models but also customer experience.

In part two of this article, we will explore how digital transformation is present in many business processes and diverse industries.

Photo courtesy of FutUndBeidl.

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