What is Digital Transformation?
The term "Digital Transformation" refers to the process of transforming a business' existing processes and operations to take advantage of digitalization. Oftentimes, digital transformation will form part of a larger augmentation in the principle model of operations for a business.
Digital Transformation has the potential to introduce significant benefits to businesses of any kind—with the largest gains being made to areas that lack effective digitalization of any kind.
Why should businesses consider Digital Transformation strategies?
Maximize Growth
Supercharge your organization's growth by maximizing its use on best-in-class technologies which, when combined, have the potential to deliver streamlined and highly automated experiences which transform existing operations.
Optimize Processes
Optimize business processes through the elimination of repetitive administrative tasks, freeing up resources for more productive time and resource allocation.
Automate Workflows
Gain a competitive edge with highly automated workflows which make processes work for the business, rather than against it.
Integrate Departments
Build a digital ecosystem that fosters cross-department collaboration by design, in order to reduce data loss and miscommunication while maximizing organization-wide communication and efficiency.
Reduce Labor Costs
Digital transformation serves as a primary method by which organizations can increase employee productivity through the reduction in labor spent on repetitive and automatable tasks. The approach provides a means by which organizations can substantially regain resources due to the time and associated cost savings of a highly integrated digital solution at the business level.
Leverage Technology
By making use of the very best in technology, businesses can utilize digital transformation as a compelling solution to stale processes by reinventing them digitally.
The costs to your business of ignoring Digital Transformation
Loss of revenue
Manual and time-intensive processes, whether manual or digitized, are a revenue killer for business, not to mention their impact on morale. The costs of failing to sufficiently optimize processes and utilize best-fit technology can have deep and far-reaching consequences for organizations.
Businesses looking at digital transformation should be identifying key areas where manual and overcomplicated processes can be reimagined in order to make best use of automation and digitization in order to successfully transform them.
Processes that are currently draining precious resources from a business are key target points for digital transformation efforts, in order to reduce cost and operational overhead, freeing up the organization's resources to focus on further development.
Lack of collaboration and integration between internal teams and departments, with the potential to lead to frustration and bottlenecks in efficiency.
There's lots of research to suggest that collaborative, interconnected teams are more efficient and produce more meaningful impact. A comprehensive digital transformation solution can be leveraged to generate greater connectivity between departments through the sharing and transparency of data, more centralized processes, and clear audit trails.
Falling behind
The costs to a business of falling behind in today's digital economy are significant. As the digital economy continues to advance, businesses at the frontier are likelier to gain a competitive advantage. Successfully implementing automated solutions through effective digital transformation is a key means by which companies can deliver greater and more impactful customer experiences that end-users demonstrate a preference for. As competitors take better advantage of best-in-class technological implementations to fuel growth, it's imperative that your business is able to identify crucial areas for further development before falling behind.
For legacy applications and architecture, there is a very real risk of technical debt compounding over time. A business which has been utilizing stale tech for a number of months or years is due to re-assess the implementation to identify areas of performance loss at the right time.
Current trends in digital transformation
AI
Implementations which leverage Artificial Intelligence are poised for adaptability due to the dramatic advances in technology in this particular digital space. Disruptive brands who are seeking higher levels of value and automation from their technology stack should look to Intelligence as a potential answer to this challenge.
Automation
Automation plays a big part in Digital Transformation solutions, allowing you to re-divert valuable resources back into the business, rather than losing them to repetitive and time-intensive operations.
Experience Design
Experience design (XD) is a vital component to development of a strong Customer Experience (CX). Through effective digital transformation, organizations can better connect data and experiences through integration of the entire technology stack, providing stronger and more personalized results for both end-users and internally.
Data
The ability for an organization to collect and understand its data is imperative to success in the digital economy. Well-executed digital transformation solutions prioritize data in a way that creates value for both an organization and the customers in which it serves.
Challenges and barriers to digital transformation
Lack of awareness or understanding
We find that for many businesses, stakeholders often lack awareness of the potential gains of fully transforming their existing processes, and the advantages offered by alternative, more powerful implementations. In adequately educating key stakeholders, the prospective advantages for both the business and its end-users becomes clear, and in fact difficult to dismiss.
Cost
There is always a cost associated with the strategizing and implementation of any new digital transformation project. Perhaps the largest barrier facing successful and complete digital transformations is funding. To counter this, businesses should see digital transformation as an investment in the business, which is likely to be the case if they recognize the potential value creation such a transformation can bring.
Lack of buy-in, resistance to change
Often this can be a result of failure to communicate the potential benefits to all stakeholders and employees; because the workforce lacks digital skills; or because expectations are not made clear by higher-ups. With any significant change to business operations or processes, employees will expect continuous support during the adoption period in order to maximize their level of understanding, confidence, and proficiency.
Poor implementation
Overly complex systems are not intuitive and introduce additional barriers to completing work efficiently. A key aim of digital transformation should be to reduce repetition and, ideally, utilize a minimal learning curve.
Existing partnerships, agreements, or vendor lock-in
Businesses are often reluctant to set aside existing commitments or vendor lock-in. It's unfortunate, but Loss Aversion is simply part of the human condition. If an organization has signed agreements and invested in existing tools and frameworks in order to conduct its operations, oftentimes there will be a resistance to adopting replacement technologies even when this might be most cost-effective in the long run.