These days it’s hard to have a conversation with anyone in tech without touching upon digital transformation. Let’s dive into this concept and analyze the importance of it.
What is Digital Transformation?
In brief, we can define it as the integration of technology into all areas of a business in order to deliver value to customers. To make their companies truly competitive, leaders need to apply digital cutting-edge technologies to business processes in order to achieve optimal performance. This helps create a competitive advantage within the marketplace, no matter what sector they’re in.
Tech leaders are embracing digital transformation as an opportunity to become customer-centric, agile, and value-driven enterprises. But for every newly-digitized company, there are multiple others who have failed to fully embrace the change.
What Sets the Digital Players Apart From the Rest?
A common mistake is believing that digital transformation is all about technology, but this perception leaves out two factors: organization and business model. The promises of digitization stem from transformation across three main areas:
- Business model
Transforming these 3 main verticals is the key to success. Companies such as Amazon, Tesla, or Netflix were able to achieve a successful Digital Transformation, since they disrupted their entire industry through new business models in order to provide a more customer-centric product.
Tesla avoiding the car dealers in order to make it easier for customers to buy their cars (following Apple’s example years before) is a great example of disrupting an entire industry, transforming processes that looked like carved in stone.
Do Businesses Have a Choice?
Change is inevitable. For organizations who seek growth and who wish to survive the 21st century, Digital Transformation is no longer an option. Companies who fail to find their own path to enterprise-level transformation will be left behind as others adopt new technologies and continue to innovate beyond their non-digital competitors.
What’s holding leaders back? For starters, such sweeping digital initiatives require a change at multiple levels of the organization.
Using digital technologies to improve the customer journey requires, at the very least, new software that’s flexible and capable. On top of that, leaders must ensure the right environment: one that’s receptive to change, one that’s agile and which sparks creativity.
By digitizing everyday operations at every level, companies are performing no less than complete transformation of their core business strategies. New processes will not only enhance operations but will also enable companies to deliver even better value to their customers. Equally important, digitization allows leaders to position their companies for future innovation, enabling them to better respond to changes in the marketplace.
The role of IoT and AI in Digital Transformation
Internet of Things (IoT) is a clear driver of this new era given the current impact and estimations for the coming decades. Companies that are willing to plunge into this transformation journey, are more likely to adopt IoT and Artificial Intelligence (AI) into their organizations. Both technologies have a leading role in Digital Transformation.
IoT is an essential element of generating innovative experiences and transforming operating models. Both concepts are reshaping the industries in which they are included.
What are the Considerations When Undergoing Digital Transformation?
- Customer Centrism. Keep in mind not only to your competitors, but also on your customers. They are critical to achieving a successful transformation. Invest in providing an outstanding user experience, while improving workflows and delivering a user-friendly product.
- Agility & Innovation. Become Agile and make innovative changes. By removing the dependence on the old legacy software, revamped businesses becomes more active and aware of current market trends and demands.
- Flexibility. Be flexible and adaptable to changes.
- Alignment. Align all team members to a shared vision.
- Inclusiveness. Employees who are given the means to participate in the process Digital Transformation can be your biggest asset.
- Digital transformation is about bringing together technology and culture. That culture should encourage change at all levels by including everyone at the organization.
- Bridges. Connect legacy software with the new technology. It is essential to understand the current workflows and how technology impacts on them.
- Openness. Be open! Software companies will consider leveraging your new product as much as possible, so trust them. They are providing innovative solutions that will revamp your business.
Overall, Digital Transformation is a process that every company must experience in order to thrive and grow. It all begins with establishing a new culture, a good foundation, and employees aligned to a shared vision for digital.
Digital Transformation will be successful when everyone at your company collaborates to make it work. Therefore, leaders will need to focus on cooperation and planning at all levels. Digitization is a necessary change that crosses all industries and verticals.
Aligning your business model, your customers, and your company culture and technology will help you to reinvent your organization for this digital world.
As a way to leave you thinking about how Digital Transformation is not longer an option, I’d like to quote this LinkedIn post from Alberto Brea, Executive Director at Ogilvy & Mather:
Amazon did not kill the retail industry. They did it to themselves with bad customer service.
Netflix did not kill Blockbuster. They did it to themselves with ridiculous late fees.
Uber did not kill the taxi business. They did it to themselves with limited the number of taxis and fare control.
Apple did not kill the music industry. They did it to themselves by forcing people to buy full-length albums.
Airbnb did not kill the hotel industry. They did it to themselves with limited availability and pricing options.
Technology by itself is not the real disruptor.
Being non-customer centric is the biggest threat to any business.