Digital transformation is one of the greatest challenges – and opportunities – facing businesses today. The traditional way of doing things has been disrupted by technology, and companies need to adapt in order to stay competitive.
Digital transformation is not a one off event; it’s a continuous evolution of an organisation’s business processes and technologies. It involves rethinking the current business model to produce better results through the use of digital tools, data, and analytics.
We have helped numerous businesses, from SME to global corporation, to deliver complex digital transformations so we know that businesses that succeed with their digital transformation projects achieve measurable results. The top benefits of digital transformation include operational efficiency, faster time to market, and meeting customer expectations.
A successful digital transformation project integrates IT strategy with business goals, produces real-world results, and leads to continued innovation. However, such a project should be initiated only after a thorough understanding of all its implications for both short-term targets and long-term goals in terms of resource allocation and organisational structure.
The Benefits of Digital Transformation
More and more companies are choosing to embrace digital transformation as a way to continue growing and improving their businesses while also reducing costs. By investing in the right tools, platforms, and technologies, businesses can enable themselves to be more agile and efficient.
Some more benefits include:
- Greater competitive advantage: There are many ways in which digitisation can help companies to get ahead. For example, through insights, businesses can gain the edge in terms of knowing what customers want and need. Predictive analytics also lets businesses anticipate those needs.
- Reduced costs and increased revenue growth: The ways that digital transformation can reduce costs are numerous. High-tech B2B companies have reported a 10-20% cost reduction due to improving customer experience processes. Start-ups have also proven to increase their revenue by 34% by implementing digital-first strategies.
- Increased innovation: Digitisation frees up humans to work on higher level tasks. With more time for strategic thinking and creativity, innovation can reach new levels and drive new developments faster than ever before.
- Improved morale: Due to the point above, morale increases as employees are able to apply themselves in new ways. Menial tasks are automated, allowing workers to challenge themselves and develop. This makes each day more interesting and improves overall job satisfaction.
Planning Your Digital Transformation
Identify the Required Technologies
Digital transformation encompasses a wide range of technologies and practices. It is often accompanied by increased employee mobility, automation, and other workplace changes that can help optimise processes and make employees more productive. Below are a few technologies that organisations are using to transform.
- Mobile solutions: The benefits of mobile solutions are endless. Not only do they facilitate easy communication between businesses and their customers, they provide a great opportunity for collecting data for customer insights and marketing purposes.
- Big data and analytics: Artificial intelligence and machine learning are the driving forces behind many sophisticated systems. Their application to analytics allows for identifying patterns in complex data in order to gain valuable insights and make informed decisions and predictions.
- The Internet of Things (IoT): IoT brings businesses a world of new opportunities for collecting data through sensors. Perhaps the most obvious application for this technology is in manufacturing. However, in 2019, 86% of healthcare organisations were using it for various purposes. The smart clothing market is also on the rise, with more than 20% of adults in the US regularly wearing a smartwatch or fitness tracker. IoT is often used in conjunction with digital twin
- Cloud-based systems: These provide cost savings by allowing businesses to use resources as needed rather than having to pay for every server or software license. They also facilitate flexibility, scalability, and the storage of large amounts of data.
- Robotics and Robotic Process Automation (RPA): Robotics was traditionally used in manufacturing but as this technology has becomes more versatile, it has steadily been making its way into other industries including healthcare and retail. RPA automates repetitive manual tasks and removes human error from the equation by using virtual robots to take over sequences of tasks that were traditionally done by humans. RPA is the technology behind chatbots; a few other scenarios where it’s used include order processing, data transfer, and scheduling.
This list provides some areas of focus but there are many more depending on your organization. Digitizing paper records, digitalizing marketing journeys and efficiently digitalizing internal communications are common workstreams within digital transformation projects too. The exact scope will change per project and so you’ll need to work with an experienced digital transformation consultant to understand this. We’d be delighted to help you here.
The benefits of digital transformation are clear, but there are also risks involved. It’s always been important for organisations to have robust cybersecurity measures in place, and that’s the case now more than ever. Cybersecurity measures should be thoroughly reviewed before implementing digital transformation initiatives.
Know Your Business Objectives and User Requirements
A digital transformation strategy should be based on a thorough assessment of business priorities, user needs, digital maturity, the present business model, and future goals.
A digital maturity assessment helps organisations to identify the current state of their digital transformation journey, the degree to which they are leveraging digital technologies in their business, and the areas where they could improve.
Before initiating any project, a business should define its current and future goals, identify the value a digital transformation project can provide, and understand the expected benefits and costs.
For example, a company may intend to transform its customer experience by improving the quality of service and increasing the number of digital channels available to its customers. Another basic example is an organisation’s transformation from managing a paper-based to a digital-first system.
Not all technologies are suitable for every organisation. Choosing the right technologies is an important factor in successful implementation so it’s important to have clearly defined selection criteria. Selection criteria may include maturity level, the integration of new tools with other technologies, ease of use, and cost.
Businesses that are arbitrary when it comes to selecting technologies are more likely to fail at delivering a successful transformation, so always ask the question, ‘How will this technology provide value to stakeholders?’ This will serve as a helpful reminder along the journey.
Use Data to Guide Strategy
Successful digital transformation projects are driven by data. Organisations should ensure that any transformation project is based on data insights and is designed to achieve the expected business goals.
Digital transformation projects are intended to provide the organisation with a competitive edge by leveraging advanced technology, data, and analytics. Hence, it is important to collect relevant data about the organisation’s customers, products, and services to identify areas for improvement and profitable opportunities for growth.
The project team members should create a data and analytics roadmap to identify the sources of data, their potential, and the recommended usage. Data sources can include internal organisational data, third-party data, and data from social media channels.
Defining Project Teams and Partners
To deliver the desired business results, a project should be staffed by the right mix of people, along with strong partnerships with key stakeholders. Every transformation project has unique requirements and dependencies. Therefore, project team members should be carefully selected to balance experience, knowledge, and skills with the specific project requirements.
Even though the project’s scope dictates the ultimate objectives, it should take into account the organisation’s capacities and available resources. Therefore, project team members should be selected based on their potential and ability to work together effectively.
Ensure constant communication and transparency with your team
Effective communication, both internally and externally, is crucial for managing a successful digital transformation project. Hence, it is important to maintain constant communication among team members and stakeholders.
The project team should be dedicated to the project and committed to its success. Hence, team members should be aware of their responsibilities, interdependencies, and the benefits associated with the digital transformation project. The project leader should always make sure that the team is fully equipped with the tools and resources they need to complete their tasks.
Monitor User Feedback Continuously
Digital transformation projects should be designed to meet the changing needs of stakeholders. Monitoring user feedback ensures that the design and delivery the project is aligned with user needs. Therefore, a feedback mechanism should be created that allows users to provide feedback about services, products, and digital channels. The feedback can be used to identify areas for further improvement.
As mentioned, digital transformation is not a one off event. Project team members should keep an eye on the latest trends and updates. If there is one thing consistent in the digital world it is inconsistency. Change is inevitable and is daily so staying on top of these trends is vital so that your business stays current.
In addition to the obvious benefits of digital transformation, there are also some potential downsides. One of them is the risk of losing company culture along the way. When a company starts adopting new technology on a large scale, it can be difficult for employees to keep up without proper guidance and training. In some cases, there is also the fear of job loss due to automation. These factors can lead to low morale.
Whilst some degree of job loss is certainly possible, it’s important that employees are reassured that new opportunities are ahead for them while also understanding the risks that may affect them, as disruption will not necessarily affect workers in the way many people assume. Encouraging the workforce to upskill is an important part of adapting to automation and the opportunity for development will be well-received in most cases.
Other steps that companies can take to prepare for change include creating opportunities for employees to discuss their concerns about the shift and identify ways the company can best respond to those concerns. They can also ensure that the organisation has the resources needed to support the process, as well as the processes themselves. By doing so, companies can better prepare themselves for the changes that are coming and ensure that their culture remains strong through them all.
As well as addressing the negative impact, it’s also important to focus on feeding digital into your culture at the very heart of what you do. It should be built into every division, every product, every team. It should be integrated into board level discussions and should be understand by all the key decision makers.
This may involve an education programme for senior staff, a review of processes across the business and this is often best led by an external digital transformation consultant. This is not about making everything digital or talking about ‘digital’ itself – but about digitalising your business from within. This must not be lip service but must be a true integration. Internal communication and workshops are vital here to gain buy in from the more sceptical employees.
Digital transformation is a continually evolving process that is bringing many companies significant benefits, from reduced costs to heightened innovation.
However, it’s important to start a digital transformation process with a clear understanding of the business objectives, user requirements, and available technology options, along with their selection criteria. Not all companies need to be adopting smart robotics and IoT to get ahead; simpler options may provide a great deal of value.
If you are looking for a digital transformation agency or digital transformation consultant, reach out to our team today and we’ll be delighted to help you to scope the work, understand the roadmap and support you in delivering meaningful change.