Digital Transformation: The New Way of Running a Business

Digital Transformation: The New Way of Running a Business

• We are entering a phase where Digital transformation is happening everywhere. The world is becoming increasingly digital, and digital technologies are being integrated into all areas of business.

• To remain competitive, businesses need to keep up with the accelerating pace at which technologies are changing society. Nobody will wait for your business to catch up. Transform or face extinction? Easier said than done. What’s required is an all-encompassing transformation strategy that fully taps into the opportunities that digitalization has to offer.
• In this guide, we are taking a closer look at the need behind Digital transformation and how you can succeed.

• What is Digital Transformation?
• Why does Digital Transformation Matter?
• What are the benefits of implementing Digital Transformation?
• Reasons for Digital Transformation Failure
• Steps to Build a Digital Transformation Strategy
• What needs to be in your Digital Transformation change Management?
• Advantages of Digital TransformationWhat is Digital Transformation?

Digital transformation means adopting new digital technology to transform services or all areas of business, through replacing traditional or manual processes with digital processes or technology. It’s a fundamental cultural shift in how you interact with your customers and deliver value to them. It constantly requires the organization to challenge the status quo experiment, and get comfortable with failure.

• Many companies confuse modernization and digitizing with digital transformation, which is not true. Digitization is just introducing a tool. For example; Switching from using typewriters to word processors and personal computers.

No doubt, these technologies changed the way people used to work but they did not bring any fundamental change in the way business operated.

• Digital transformation is required to change and improve customer relationships first. Companies need to put more emphasis on rather than just on tools they use; they must consider an overall digital business transformation. In 2020, every business is using digital. No matter what you sell, you will need a digital platform to reach your customers. One example of digital transformation is the use of cloud computing.

• Why does Digital Transformation matter?

Companies adopted digitizing decades ago, so, why is the term transformation hyped in 2020? Thirty years ago, companies had the advantage of doing things slowly. That’s not the case anymore. Technology is rapidly changing; Companies need to be ready enough to embrace and adapt. Digital transformation is not a once–and–done deal. It is a continuous process and mindset for companies. CIO’s and IT teams should be continually evaluating and testing new technologies to see what could add value to the company.

Earlier, it was a notion that digital transformation can give a competitive edge. That’s no longer the case. Companies need to change and adapt for survival, let alone competition.

The key takeaway is that if you don’t develop a digital transformation strategy, your business will fail. 

• What are the Benefits of implementing Digital Transformation?

Efficiency and productivity are the main benefits of digital transformation, but transforming the way you do business unlocks the potential for positive impacts on your customer experience, operations, and employee engagement.

Let’s have a look at the most common benefits companies can get from their transformation efforts.

• Reasons behind Digital Transformation failure

1. Lack of Executive Leadership

Digital transformation begins at the top. The entire executive team must not only buy-in to the plan, but actively promote and implement it. If executives dismiss digital transformation as merely an IT project, the company will struggle to make changes

2. Poorly defined goals- Before achieving any goal, you need to define it. Digital transformation can be interpreted for lots of things. If you lack a consensus for what it means for your organization, it will be hard to execute.

3. No Road Map - Vision is needed and a roadmap for how you going to get there. Many companies recognize the need for transformation but struggle when it comes to identify what and how they will do it.

4. Resistance to Change- Like any significant organizational change, Human’s natural resistance to change will be challenging to overcome. Companies that lack in developing and executing a change management plan are most likely to fail.

5. Poor talent development or recruiting- New technology means you, employees, with different talents and skills. Mismatches between your talent skill set and technical talents can prove fatal for a project.

6. Steps for building a digital transformation technology

A renowned author, Harvard professor, John Kotter’s 1996 book leading change is one of the most used frameworks for how to navigate business change. When developing a digital transformation strategy consider following Kotter's 8 step process:

1. Create a sense of urgency
2. Build a guiding coalition
3. Create a strategic vision
4. Communicate the vision
5. Enable action by removing barriers
6. Generate Short- term wins
7. Sustain acceleration
8. Anchor changes in corporate culture.

• What needs to be in your digital transformation change management plan?

No one can transform their business online. It will likely to complete this journey in several phases or projects. For each stage, consider drafting a change management plan that will define:

• Change Scope

1. How big is the change?
2. What does it impact?
3. What is and is not going to be a part of this rollout?

• Timeline

1. When should the change be fully implemented?
2. What dependencies are there in the rollout plan?

• Responsibilities

1. Who is responsible for each part of the rollout?
2. Who is responsible for ensuring compliance with the changes after rollout?

• Training

1. What training will employees and managers need for the change?

• Analysis

1. How ready is the workforce for this change?
2. What parameters should be used to determine if the change was successful?
3. How and when will the metrics be collected and reviewed?

• Advantages of Digital Transformation

1. Enhanced Data Collection

Most businesses are collecting mountains of data, which will be analyzed so that it can drive the business forward. Digital transformation creates a way through which we can gather the right data and incorporate it fully for business intelligence at a higher level.

2. Greater resource management

Digital transformation stores data into a suite of tools for businesses. Rather than dispersed software and databases. It brings together all the company’s resources in one place that can lead to process innovation and efficiency across all units.

3. Data-driven customer insights

Data can be the key to interpret customer insight. BY better understanding customer needs, you can business strategy that is customer-centric.

4. Better Customer Experience

Digital transformation helps in giving a better customer experience as Customer expectations should be met fundamentally.  

5. Increased Profits

Companies that have undergone digital transformation improve efficiency and profitably.

6. Improved Agility

Digital transformation makes organizations more agile. Businesses can increase their agility with digital transformation to improve speed to market and adopt continuous improvement strategies.