In the Industry 4.0 age, business digital transformation is highly desired for digitization. The main focus of several publications, research, and panel debates on how to remain current and competitive in an increasingly digital business environment has been digital transformation (DT or DX). The hype train is currently nearly packed and barely manages to keep on its rails. As a result, many businesses begin their digital transitions without making the necessary preparations, seizing digital technology in a hurry and speeding through the process, which has unintended consequences. Let’s examine DX and methods for dealing with it in more detail.
What is digital transformation, exactly?
The process of integrating digital technologies into all facets of an organization, which radically alters how it functions and provides value to its clients, is known as “digital transformation.” The reason this seems so nebulous is that each company’s specific digital transformation process will vary greatly, making it very impossible to develop a definition that applies to all DX.
Researching and implementing new digital channels and technologies could necessitate fundamentally altering the business models and operational procedures that up until now served as the cornerstone of organizations. Therefore, a sound and well-thought-out digital transformation strategy are essential to ensuring that the organization emerges stronger than it was before.
Things to consider when transforming to digital
DX has been the subject of several myths over the years.
Here is a collection of the most typical ones along with the truth:
- The execution of digital transformation demands leadership from the top, which is completely incorrect in this case.
- Digital transformation primarily affects the customer experience. It creates enormous prospects for productivity, efficiency, and employee leverage.
- We can pursue DX despite our IT because a successful DX depends on the interaction between business and IT being improved.
- Another common fallacy is that digital transformation only affects technology and B2C businesses. In reality, DX offers opportunities across all industries and is significant everywhere.
- We may wait and watch how the digital world develops with DX in our company, but the longer you wait, the further behind the digital leaders in your sector you will be. You won’t be able to catch up to them if you wait too long.
- The DX method varies between industries and enterprises – even though the actual process is nearly always unique, all DX leaders have a similar DNA, and the road to digital transformation exhibits consistent characteristics across industries.
How Crucial is digital transformation?
Going digital is essential for market survival, thus the answer is rather straightforward. We are firmly established in the digital era, and anyone who does not implement digital technology (such as the internet of things, modernization of legacy systems, artificial intelligence, and machine learning), will eventually fall behind owing to failure to satisfy the demands of the market or failing to use the most effective online business solutions.
Successful digital transformation projects can revitalize a business or even give it a new lease of life. Examples?
We don’t need to search very far because LEGO created games for mobile devices that combined the real and virtual worlds. Additionally, they are heavily experimenting with cutting-edge technologies like 3D printing, sensors, and sophisticated components that can be managed by a special app.
Main DX areas
The process of digital transformation has been extensively researched. These studies highlight crucial aspects for successful efforts in digital transformation.
The key four can be summed up as follows: digital marketing, operational digitalization, IT modernization, and innovative initiatives.
Modernizing IT
The initial phase in the digital transformation process is frequently improving current IT infrastructure, which includes things like updating software, changing hardware, introducing new technologies, using data clouds, and putting in mobile infrastructure. Such digital initiatives will not only update the IT and communication infrastructure of your business, but they will also save maintenance costs and boost worker productivity. And all of that is because you just switched to modern tools. But keep in mind that effective adoption of new technology requires time and qualified IT architects.
Modernizing IT can also be done in the future; prosperous businesses continue to make IT investments long after their DX is finished. This guarantees ongoing improvement of the customer experience and work efficiency as well as continued evolution of the current procedures.
Digitization of operations
Your activities will become simpler, more efficient, and more logical once you digitize them. This vital process, which is often carried out right before DX, can take many different forms. Of course, moving from analog to digital labor is the simplest of them all. Your company’s restructuring may need to go much farther, such as by combining different divisions into one. Operations can be gradually digitalized by starting with the fundamentals and progressing as the business grows.
What makes this action crucial?
Without streamlined, refined operations, leaders in the digital revolution will surpass your business. Additionally, effective process digitization creates more transformational opportunities. An effective illustration of this is the ability to spur the development of a whole ecosystem of goods by merely enhancing an organization’s eCommerce platform and logistics and expanding the range of goods it offers.
Of course, this process will take time and involve technology, but when done correctly, it will result in considerable cost, time, and resource savings while also increasing customer satisfaction.
Internet Advertising
Using digital solutions for online sales, client profiling and acquisition, or brand awareness are all examples of becoming digital with your marketing. This area stands out from the others since it concentrates on a very specific subject: digital tools for communicating with and interacting with customers. You’ll need to make investments in particular resources, such as collecting clean consumer data, analyzing it, and purchasing tools to create an omnichannel presence (such as chatbots, AI, and automatic responders).
Digital channels can be utilized effectively to launch digital marketplaces, develop viral campaigns (including geo-targeted ones), etc. The aforementioned artificial intelligence can be used to analyze consumer behavior and help the marketing team adapt its approach to emerging trends.
By digitizing your marketing, you can lower the cost of customer acquisition, increase the return on marketing spending, improve customer service, and attract new clients owing to the data gathered.
Brand-New Initiatives
The digital transformation ultimately creates new growth opportunities. Your business should be well-established to fully benefit from this market because tactics that result in new business models, services, or products, or that build an entirely new business environment, can be highly disruptive. Businesses that have recently undergone DX or those that are currently in the process lack the resources and digital maturity necessary to properly embrace such audacious measures.
Do the advantages outweigh the risks? The so-called Key Performance Indicators, or KPIs for short, can grow incredibly intricate or even nebulous in this situation, so it’s a personal affair. This may be summed up as coming up with a solution for a significant client issue and making money off of it. You can’t call that appealing, can you? For this reason, a thorough assessment of the market and the company’s capabilities should come before every new business initiative.
What is the best way to approach your business’s digital transformation?
As was already noted, since each process of incorporating digital technology is unique, it is difficult to offer particular advice and answers. Here, all we can do is offer you a few general “do’s” and “don’ts” that can help you stay clear of the most common digital disruption: improper planning.
Contact an experienced business transformation expert for more detailed guidance and assistance in developing an effective DX strategy.
Three areas—vision, plan, and action—should be incorporated into any effective digital transformation strategy. Therefore, you should ask yourself a few crucial questions before beginning the planning step.
There are three that are “essentials”:
- Why is transformation necessary?
- What do we have to change?
- How do we change?
With them, you’ll have a strong starting point for studying further subjects including long-term objectives, necessary abilities, and knowledge, who should be involved, potential outside assistance, gaining insights, etc.
Make security a top priority once your business has established a DX business plan and has begun the transformation process. Digital firms that are changing or that have just been launched are particularly susceptible to cyberattacks; moving to remote labor can result in security weaknesses that hackers can ruthlessly exploit. Investments in reliable security measures (hardware and software) should therefore be given top attention. This is especially true for large businesses that work with private online data.
Setting the hybrid work paradigm as a priority is another wise move. A flexible work model offers many more alternatives than limiting yourself to only remote or on-site work. It may also be tailored to your employee’s demands, which will increase productivity. But bear in mind that careful preparation is necessary for a hybrid work structure to be effective over the long term. The effort is unquestionably worthwhile because a hybrid work system greatly expands the horizons of your company. For instance, it offers up larger pools of possible employees by permitting asynchronous work across multiple continents.
The first important “don’t” is to never launch any effort without considering data analytics. Every company choice should be supported by reliable data, especially those involving DX. Your resources will be stretched thin without the work of data scientists and analysts, and you’ll be more prone to experience digital disruptions. Your chances of success are much higher even with a small amount of data support (such as with 4 developed KPIs).
While we’re talking about “don’ts,” it’s a bad idea to underestimate the value of the customer experience. Customer and client experience should be a key component of digital transformations because they are at the core of any business strategy. These two are frequently closely related and have a big impact on one another.
Conclusive Reflections
Although the process of digital transformation can be time-consuming and difficult, done properly, it can greatly improve your company’s performance and position in the market. DX should never be carried out hurriedly or without adequate forethought. Do not be afraid to ask for assistance from a qualified DX expert to ensure that your digital transformation strategy will produce the desired results. Such people can be found at Silicon Cities, a Sydney-based organization that offers professional advisory and consultancy services.
