Specialist Information on Digital Transformation
For organisations looking to implement new strategies that will ensure growth within the company and continuously meet customer expectations, it is important to carry out digital transformation. If this is not an aspect of business that you are familiar with, read on to find out more about what digital transformation is, its benefits and advantages, disadvantages, and trends within it that may see an organisation prepared for the future.
What is digital transformation?
As the process of digital transformation will vary considerably for different organisations, it can be difficult to come to a definition which neatly fits all variations. Generally, it is defined as the integration of digital technology into all areas of a business. This most often results in fundamental changes to how businesses operate and carry out work processes, and how they deliver value to their customers as a result.
Beyond this, digital transformation also represents a cultural change within an organisation. It requires a business to continually carry out processes related to change management, up to and including substituting long-standing business practices for newer practices that are not yet as clearly defined.
Examples of digital transformation
The process of digital transformation varying between businesses also means that examples of it vary just as greatly. They may include implementing tangible, customer-centric digital tools like mobile applications or improving a company website for a more straightforward customer journey. Equally, examples may also include implementing machine learning algorithms that turn a traditional business into a digital business.
Digital transformation methodologies
Digital transformation may be implemented within an organisation using a range of different methodologies. There is no one methodology that suits every single business best, either; instead, it is important for a digital transformation officer to look at what needs to be accomplished with the transformation made, as well as the company’s goals and objectives. It is also important for the individual to understand the company’s culture, so that it may be incorporated into its future.
It is often the case that these methodologies will conflict, so an individual considering them for an organisation will need to understand which ones will work together – either in part or as a whole. Identifying potential conflicts and sources of tension is vital for the success of the transformation process through the methodology or methodologies utilised.
Some of the most common and widely used methodologies for digital transformation include:
- Agile methodology
- Change management (specifically the ADKAR methodology)
- Customer experience
- Lean Six Sigma
- Project Management Body of Knowledge (PMBOK)
- Software vendor methodologies
Digital transformation strategies
As with processes and methodologies in digital transformation, there is no one set of steps that must be followed to implement digital transformation strategies. However, there are some key steps that all strategies must follow in order to be implemented successfully:
Aligning objectives with business goals
It is important to begin the process by providing an answer to the question “What business outcomes do you want to achieve for customers?”. Individuals working on digital transformation within an organisation should understand the problem said organisation wishes to solve. In turn, the objectives set by these individuals should then align with the outcome the business wishes to achieve overall.
Completing competitor analysis
After identifying an organisation’s specific needs, carrying out competitor analysis in order to understand competitors’ digital transformation strategies is essential. This information may give insight as to how an organisation can move forward to stand out from its competitors.
Analysing examples of digital transformation that succeeded for other organisations can help a company to form a roadmap for their own eventual transformation process. This involves digital transformation officers identifying the specific actions that allowed one particular organisation’s plan to succeed, and incorporating these steps into their own company’s strategy.
If there is a specific organisation not in direct competition with their own company, a digital transformation officer may also consider consulting with said organisation’s transformation team. This may prevent mistakes and expedite time to completion.
Ensuring IT and business are co-creating
IT departments within an organisation must work as co-creators with the business, meaning the two must work together to define issues, solve problems, and deliver value for customers. Communication is key in this process.
Picking strategic partners
Individuals working on digital transformation for their organisation will require assistance with fulfilling digital imperatives to reduce time to business value. To ensure this, experts advise finding partners who have proven track records, and whose values most closely align with the given organisation’s.
Getting stakeholder buy-in
Digital transformation requires leadership buy-in in order to be successfully implemented. This in turn requires active dialogue and engagement with stakeholders across the organisation as a whole. Individuals involved should share their findings and expect feedback, which is then to be considered as part of the process.
All digital transformation initiatives require time, resources, and finances in order to be implemented. This is why it is important to prioritise initiatives in order to receive the highest return on investment (ROI) from the process as a result.
Initiatives should be prioritised by impact, value, and the effort required to carry them through. Beginning with smaller but more impactful initiatives may assist in demonstrating the value of the digital transformation process, increasing acceptance from stakeholders and employees at all levels. It also helps individuals to envision what larger, more intensive initiatives may bring to business processes and operations.
Individuals involved in digital transformation should also consider the customer perspective. This includes which initiatives will have the largest impact on digital customer experience and what will make it easier for customers to do business with an organisation.
Redesigning the business or products around customer outcomes
Carrying out this step may involve using cloud computing and software to accelerate change, as well as embracing artificial intelligence to boost operational efficiency and to respond to evolving customer expectations.
Creating a roadmap
A roadmap ensures that all individuals involved with the digital transformation process are aware of deadlines and the “bigger picture”. This should be reviewed by both the digital transformation team and leadership, and remain flexible enough to accommodate changes that may occur.
The roadmap should include:
- Resource requirements
- Responsible parties
- How the initiatives will be funded
- Expected outcomes
- Criteria for measuring results
Retraining employees in relation to digital
Organisations wishing to align their digital imperatives with customer preferences and expectations must also ensure that employees are in alignment with and acceptance of the changes. This may involve retraining them to ensure they understand the implications and benefits of said changes, and know-how their role will be affected by the changes being implemented.
Implementing a single solution across an entire organisation is unlikely to ensure specific problems that are unique to specific departments are solved. Instead, transformation teams should implement test solutions in departments with problems that best match the issue the solution is designed to solve. These tests should then be scaled to the size of the department involved.
Roles within digital transformation
Certain roles within an organisation are vital to the success of digital transformation. These include:
- Cloud computing specialists
- Conversational brand strategists
- Data architects
- Data scientists
- DevOps leaders
- Digital product managers
- Digital trainers
- Ethics compliance managers
- Forensic analysts
- Software engineers
What are the benefits of carrying out digital transformation?
Most of the benefits and advantages involved in carrying out digital transformation revolve around the notion of keeping an organisation up-to-date. However, there are also cultural benefits, advantages to employee productivity, and customer comfort to be considered.
Advantages of digital transformation within an organisation include:
It makes a business more competitive. A poll conducted in 2018 found that 44% of enterprises already implement a digital-first business strategy, meaning it is likely that any one organisation’s competitors have already adopted new technologies. Every new organisation joining the market is focused on digital adoption as well, in order to move ahead of their own competitors. More conservative competitors, who may be reluctant to adopt new technologies, will be left behind and eventually lose their place in the market.
The right technology for any particular organisation should allow said organisation to develop and become more flexible, efficient, and productive. Overall, it should also improve ROI.
It allows organisations to provide a better customer experience. Providing the best customer experience (CX) possible is one of the fundamental principles of business management. As an organisation’s average customer is likely to spend multiple hours per day consuming a form of digital media (for information, entertainment, and making purchases), it is logical for that organisation to present itself through that media form. By doing so, an organisation opens itself up to the possibility of facilitating a customer journey through a seamless user experience of digital platforms. Digital transformation methods which may offer a smoother, more efficient CX include improving on or building a better website and updating or creating a new app. If they are done well and provide plenty of benefits for customers, they are likely to be adopted quickly by an organisation’s target market.
It makes employees more productive. If employee performance improves as a result of effective digital transformation, the performance of the organisation as a whole will improve as well. For example, the automatisation of production through the introduction of assembly lines, the robotisation of certain processes, and the creation of AI have all resulted in more time for intellectual work that only human workers can carry out. Modern technology is also able to optimise processes for spaces not designed for manual work and labour, such as office spaces. Customer Relationship Management (CRM) systems, for instance, were originally developed to combine and facilitate accounting and client management while minimising repetitive tasks in marketing and sales. Accelerating performance through digital transformation allows employees to reach their full potential in a shorter amount of time. Even the introduction of simple programs, such as messenger systems or cloud services, could result in increased productivity as employees are given faster, easier access to information.
What are the disadvantages of digital transformation?
As well as advantages and benefits, it is also important for organisations to take heed of the disadvantages that may be presented as a result of digital transformation:
It is a never-ending process. An unavoidable disadvantage of digital transformation is that it will always have to be an ongoing process. Technological progress and advancement has no defined end period, meaning that any transformation within an organisation will have to continue indefinitely in order to stay up-to-date. Businesses will have to anticipate scientific breakthroughs and prepare themselves quickly in order to be ready for new technologies to be implemented.
It takes time. Adopting new enterprise management solutions takes time and substantial effort. An individual finding technology for an organisation to use does not necessarily mean that this will be the right technology to suit any particular purpose. Implementing too many optimising platforms can result in detrimental effects, so it is important for experts to take the time required to research and test potentially suitable technologies.
Once a specific technology has been adopted, time will also be required to train employees how to use it effectively.
It may be met with resistance. The burden of any number of changes made within an organisation will often fall on its employees. Digital transformation is yet another form of change, and may be viewed by some individuals as another factor which causes stress. If an individual does not feel ready to accept the new technology or does not feel entirely supported in their role and the new expectations of them they may become resistant to an organisation’s attempts at digital transformation.
Digital transformation and the COVID-19 pandemic
The COVID-19 pandemic had a rapid and significant impact on driving digital transformation for many organisations across the UK and the world. With the sudden shift towards remote working, organisations of all sizes found that upgraded technology was now a necessity. A lack of customer and client foot traffic also helped to push an agenda for furthering the reach of customer support, including implementing chatbots on websites.
Implementing automation tools for resilience reasons and removing or improving redundant or conflicting systems were also considered and carried out by many digital transformation officers.
Five trends involved in digital transformation
According to Forbes, the five trends changing the face of digital transformation in 2022 are:
- Cloud technology. Cloud technology ensures employees are able to securely access large amounts of an organisation’s data from anywhere in the world, at any time. This ensures greater efficiency and allows individuals to collaborate on projects without spending time or money on travel. Organisations may also be able to save money from a set budget, as it reduces the need for physical infrastructure.
- The hybrid work model. It is imperative that organisations are flexible in regards to “the new normal”; it has been reported that 54% of employees who work remotely some of the time would ideally like to permanently split their time between working at home and working in the office. This may also prove beneficial to organisations, as this offers employees the flexibility of working when they feel most productive – rather than during a set number of hours.
- Investments in artificial intelligence and machine learning. AI-powered marketing automation software is experiencing a growth in popularity and mainstream use, including in digital transformation strategies. As an example of its uses, AI has been proven to save time when creating personalised content experiences.
Efficiency is expected to drive organisations to automate tasks with the outcome of increased productivity. A 2021 survey conducted by Forbes found that 76% of organisations surveyed had already made AI and ML a priority over IT solutions.
- Transparent privacy policies. Privacy and its protection have become a growing concern among consumers with the growing popularity of leading a digital life. Keeping privacy policies transparent for consumers ensures their comfort and means an organisation stays honest about its practices.
- Blockchain technology, non-fungible tokens (NFTs) and the metaverse. Blockchains are most commonly associated with cryptocurrencies such as bitcoin, but it can be implemented in business in a number of different ways. This includes the basic promise of enhanced security through immutable records, as well as implications for how a company may manage a supply chain, work with partners, or handle transactions or contracts.
NFTs, on the other hand, are unique digital collectables that can be bought and sold, and have in recent months become closely associated with digital art and games. However, they may also be used for assets such as property, stocks, bonds, or even data ownership rights.
Work with us on Digital Transformation
Transformation within organisations is something that is inevitable, as capabilities evolve over time and the world becomes ever more digitalised. Our Digital Transformation team is ready to help you move forward as well, with specialist experience and understanding in what future state clients wish to achieve – as well as the skill in finding talent to make it achievable. If you are looking to address your organisation’s Digital capabilities and require assistance from professionals, contact us.
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