Digital Transformation – The New Business Era
Does the term “digital transformation” sound very futuristic to you? Well, it might surprise you to know that it is a very real situation in today’s business era, and it is something that your customers already expect from you – and you’re probably falling short.
So what is this new threat (conversely an opportunity) to your traditional business?
Digital transformation is the movement of a business from traditional processes to more technology driven digitalized functions. It is an enterprise wide phenomenon that leverages information technology to transform the business model and operations into a more efficient one. This includes bringing in leadership that supports the radical change required, investing in the automation of business processes through application development, and training employees to adapt to the technology.
Digital transformation was first adapted by the big fish in the industry, such as Amazon, Google, GE, Apple, etc. These companies put significant effort into innovation, which is why they are constantly disrupting the market with breakthrough technology, and had made the move to a digital ecosystem well before time. This should concern you because their personalized services coupled with fast delivery and intuitive user-based online technology, all at an affordable rate I may add, has raised customer expectations to unreachable heights, and on a subconscious level. This means that the 21st century customer expects to find your business online, shop for products without the possibility of it being “out of stock”, pay for it using digital currency, have it shipped to their doorstep within a reasonable time, get refund/product replacement if so desired, and get personalized product recommendations when they login to your website. For your business to be able to provide this, you need digital transformation.
This radical change in the way a business is structured and operates at first glance seems more trouble than it’s worth. However, there are reasons other than the customer pull (if that isn’t reason enough!) that you should be going to the trouble to adapt it, which I have outlined for your benefit.
Still not convinced that your business needs digital transformation? The data speaks for itself.
Now that you know the importance of digital transformation, let’s find out how your business can be on board.
Form a Digital Transformation Strategy
The strategy should be based on a vision of where the company should be standing in the next few years, and should not be based on current capacity. After fixing the vision, the strategy should be such that it can achieve that vision, and for this, the entire company should be on board. This requires effective communication throughout the company. A lot of companies in the early stage of digital transformation have made the mistake of focusing on automating tasks, and have missed the bigger picture. The strategy should be something groundbreaking that will radically change the business itself. This means that obtaining the technology should not be the ultimate goal, rather the technology should be a means to achieve the strategy.
Technology is a Means to Achieve an End
The main trap that companies fall into when making the move to digitally transform their business is that they think it’s just about adapting a bunch of technology. This is why a lot of companies are disappointed when they fail to achieve the ROI they anticipated after mindlessly investing in technology. Before making the investment, keep in mind that your business should have a set of objectives, and technology should be a means to achieve that objective. You should only invest in digital transformation if it can achieve your objective more efficiently.
Understand the Way Your Business Operates
Analyze your business to find processes that can easily be automated given current technology. This can help make processes simpler, more time-efficient, and more cost-efficient. For example, an online collaborative workspace can help you cut down on office operational costs and increase productivity. Automation of daily administrative tasks can free up employees for more skill based and value creating activities. However, automation should not be the main purpose of digital transformation, analyze how the business interacts with its stakeholders and how valuable these interactions are. You will find more meaningful ways to digitally transform these interactions.
Bring in Leadership that embraces the transformation
For the digital transformation strategy to be executed, the leaders of the company should be driving the change. There should be a dedicated workforce with members from every function. They should be at the forefront of embracing the transformation and should motivate the employees to be tech-savvy.
Develop Talent In-House
Smart and talented employees want to work for a company that puts effort into technological innovation to be relevant with the times. They want to work where their skills will be polished over time. So retain the employees that show potential and they will thrive in the environment of continuous improvement. Engage them in meaningful work, enroll them to take online courses to develop new skills, and empower them to take initiatives.
Understand Consumer Needs
Analyze consumer consumption patterns and look for gaps in the market that you can enter through digitalization. For example, Uber disrupted taxi commute through a digital transformation of the taxi service with the consumer’s convenience in mind. The consumer should be at the core of your strategy.
Build Your Online Presence
The first step to build your online presence is to have a business website/web application, preferably a mobile responsive one. The next step is to build a mobile application to engage your audience by providing services through innovative user experiences. Also, make sure your business has its own social media accounts on popular platforms, such as Facebook, Twitter, Instagram, etc. In an era where interactions are increasingly online based, having a strong online presence builds trust, enhances brand awareness, and helps build relationships with the target audience.
Digital transformation has, in some cases, drastically changed the way businesses operate. We will now take a look at some examples of how entire industries were transformed with breakthrough technology, and the value it has created for consumers.
According to a 2006 report by the Institute of Medicine (IoM), medical errors are responsible for about 44,000 deaths annually. Of this, a staggering 7,000 deaths are due to illegible handwriting on prescriptions. Now, most hospitals are adapting Electronic Health Record (EHR) systems and e-prescription to address these issues. Doctors now input all patient data to the patient’s account so that the patient history is easily available. E-prescriptions can advise the doctor when two medications may react with each other, or contain similar chemicals that result in overdosage. As the data is electronically transmitted to the pharmacy, with details about dosage and no human interference, patients get the right medication. For the general public, wearable devices and applications can help them keep track of their health, get notified to take medication, and follow their diet and exercise routine.
IT has influenced the retail sector so profoundly that it has become difficult for businesses to survive without some degree of digital transformation. Companies such as Amazon provide tailored services using a combination of technologies to pinpoint the preferences unique to a customer. These technologies include online user behavior tracking to use personalized engagement strategies, and data analytics to analyze user trends to predict outcomes. Not only are traditional retailers failing to satisfy customers, they are incurring more costs. Digitalized supply chain processes now help retailers to control stock more efficiently, and cut losses. This has been possible due to technologies such as RFID chips and IoT sensors. Suppliers are automatically notified when stocks are to be replenished, and quality is maintained across the supply chain.
Consumers already expect their banks to provide online banking services. In fact, the demand is evolving from online banking to fintech services through which they can manage their investments and spending patterns, and get personalized advice about investment prospects. Digital currency, such as bitcoin which does not have any government representation, has again set the wheel of change in motion as it has become an acceptable means of payment. Banks are no longer the place to manage wealth, they now have to compete with various online platforms, such as Blockchain, that can provide better services, faster, more cheaply, and securely.
These were just a few sectors that have been overhauled through digital transformation. As these major sectors are becoming more and more technology driven, their related sectors are also changing to better cater to the business needs. It has become a necessity for all businesses, big or small, to ponder whether they will adapt now and gain a first mover advantage, or become a story of caution.
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