Digital transformation is a hot topic right now in business.
Companies all over the world are looking to improve their performance with assistance from technologies they hope will help them produce at lower cost, improve productivity and expand their reach.
But the process of digital transformation isn’t standalone: it requires a fundamental reengineering of business processes to make it a success.
In this article, we’re going to discuss some of the critical elements that are required to achieve any digital transformation project, whether in the realm of customer service, organisation efficiency, or business models.
Study The Technology
Any digital transformation requires the procurement of technology: buying technology-based solutions that you hope will drive the desired changes in your business. But finding the solutions that will drive the transformative change that you want can be difficult. Which technologies will perform best? And which are most suited for the business model that you hope to achieve?
Today’s technology procurement extends well beyond the traditional SMAC – social, mobile, analytics and cloud. Businesses must now explore many other emerging avenues of technology, including cybersecurity, artificial intelligence, the internet of things (especially sensor networks) and collaborative robots. These new technologies have long since moved off the drawing board and out into the real world, and are ready and waiting to be used in productive business activities.
Deciding which technologies to procure is as much a creative process as it is an analytical one. As technology advances and becomes more integrated, the nature of organisational transformation is changing too. Digital transformation ten years ago meant something radically different from what it means today. When procuring technology, think about what it can do now and brainstorm different applications. If possible, move beyond traditional areas of transformation (the cloud, outsourced IT etc.) and into new ones.
Build A Culture That Loves Change
You might have found the perfect stack of technology for your digital transformation, and you may have a clear vision of how everything will fit together, but if your team isn’t on board with the idea of change, then it’s unlikely that your project will be delivered in the way that you anticipate.
For business transformation to be a success, especially digital transformations that aim to alter the organisational structure, your entire team has to be committed to change. Innovation shouldn’t be seen as a threat but an opportunity to improve working practices, products and services.
Generating a culture of change is easy in the boardroom, but how do you implement it in the wider company? One way that you can do it is through external acquisitions. Often change from within is difficult, but buying a company with a ready-made culture of innovation can deliver immediate results. That arm of the company can then implement the change that helps the rest of the organisation grow. It can be a new entity: a shining example of what is possible and how to apply it.
Deliver Better Customer Experience
Ultimately, it’s the job of businesses to serve the needs of their customers. So any digital transformation must focus on client needs if it is to be a success.
Today’s firms are using digital transformation as an opportunity to understand their customers better. Digital tools are helping them discover what their customers like, and what they don’t, and which aspects of their service are leading to dissatisfaction.
Any organisation undergoing change needs to monitor the happiness of its customers. Changes at the organisational or business model level might seem prudent, given market conditions, but customers might not like them.
Understanding customer response to organisational change is just as critical a component of digital transformation as the implementation of new technology. Maintaining customer relationships through rapid change is essential for the survival of the business through such a disruptive period.
Digital transformation can enhance the customer experience in many ways:
Allows Better Understanding Of Customers. Many of today’s top companies use digital tools to both discover and market to their target audience. The most successful among them investigate their customers in detail and then feed their data into smart software which conducts analytics and makes suggestions on how to market to particular individuals, how they might want to consume the company’s products or services, or what price they might be willing to pay in that specific moment. Innovative restaurants, for example, are now dynamically adjusting prices depending on how busy they are, how much food they have in stock, and what the weather is like outside.
Enhance Conversions. Converting customers from little interest to committed buyers is often a long and challenging process, especially for firms with sophisticated products. But digital transformation is helping to make the process easier, boosting bottom line revenue growth. How? Companies are now using data collected from a customer’s digital activities to replace slow (and often ineffective) in-person sales interactions. Firms, for instance, can track customer purchase patterns to tailor specific products that they will love. They are also directing marketing at the times of day that are most likely to lead to conversion.
Improve Customer “Touchpoints.” Touchpoints is the name given to the many interactions that a company might have with a prospect, whether that’s a visit to the company’s website, an instant message sent to a chatbot, or a post on social media. Enhancing touch-points online using traditional methods are costly and labour-intensive. But new technology is making it possible to automate these processes and create new opportunities for customer interactions. Perhaps most exciting of all, digital transformation gives firms the ability to continue communications with customers across multiple channels such as telephone, online chat and email. Integrating these channels enhances the customer experience (especially when troubleshooting), and offers a way for firms to differentiate themselves from the competition. Although customers are used to repeating their problems over and over to different representative, they find it frustrating. Integration should, therefore, provide a competitive advantage.
Digital transformation success depends on the ability of firms to organise themselves in a way that is appealing to workers. When done correctly, these transformations can attract more talent, helping the firm deliver better products and services to customers.
With the rise of digital communication tools, companies are beginning to adopt hybrid working models. Firms are encouraging employees to work two or more days from home and only come into the office for face-to-face meetings when required. Many organisations have abandoned the idea of set desks for employees, including the C-suite, preferring collaborative and flexible office spaces. The hope is that these new working models will help to attract the best people, driving performance gains in enterprises that can offer progressive working practices right now.
Acknowledge And Plan For The Lifecycle Of Digital Services
Many managers approach the problem of digital transformation as a one-shot event, but it’s not. Digital transformation is an ongoing process which depends on the life cycle of digital services. Sustainable business transformation plans plan for years ahead by managing and evolving their digital offerings. The most successful firms take ownership of their digital tools and look into the future to see how they might be used, expanded or replaced.
Transform The Business Model
No digital transformation can be a success without a concurrent transformation in the business model. Companies need to change the nature of their operations, just as much as they need to use new technology to augment them.
Move To New Platforms. One way to ensure digital transformation is to move to a new platform. Take a jewellery retailer, for instance. The retailer may be committed to brick-and-mortar stores, but with 20 per cent year-on-year growth in the online retail sector and stagnation on the high street, it’s clear where the money is going to be made in the future. Part of the transformation of the business model involves thinking of ways to engage customers online to a similar degree to in-store.
Diversify Into Digital Products. Although traditional products might be your “bread and butter,” digital transformation often embraces changing your product makeup to reflect the new digital environment better. For instance, if you’re a stockbroker, you might want to offer customers an in-house app that allows them to make transactions on their mobile devices, rather than going into a branch and speaking with a manager directly. Likewise, a company that sells music might want to launch a new music listening platform so that customers can listen through their devices, rather than requiring them to visit the store.
Share Global Resources. International businesses often face administrative issues, especially as the complexity of their operations increase. Standardising certain processes across countries can be difficult. Digital transformation can only be successful if firms integrate things like HR and product design on a global level.
Digital transformation is happening across a variety of industries, but for it to work and deliver better service to customers, companies have to be prudent in how they implement change. It’s not enough to focus on the tradition cloud, analytics, and mobile aspects of change: there’s a need to explore the role of AI and plan for the long-term lifecycle of digital services.