Digital Transformation – It’s Not Just a Buzzword
Four-part series on what you need to know about digital transformation to stay relevant and competitive in the digital age
Part 1: Learn, Assess, Plan
What is digital transformation?
Digital transformation is a term you are likely coming across through interactions with colleagues and while browsing business articles. But what exactly is digital transformation and how does it apply to your job and your company? Is it just a buzzword or is there value in exploring the opportunity? As the world becomes more and more digital, digital transformation helps companies and industries stay relevant and competitive. If you are a business leader, understanding digital transformation and figuring out how it can impact your company needs to be a conversation you are leading.
So what exactly is digital transformation? Simply put, digital transformation is integrating technology to change the way a business operates – from improving processes, to how employees and customers interact with the company, to how it delivers value. Digital transformation creates efficiencies and allows a business to scale. It leads to the team taking on more strategic and less tactical tasks. It can also create a better experience and engagement with both your employees and your clients. Digital transformation applies at the industry level as well – it can completely transform an industry and how people interact with it.
Take for example, the entertainment industry and specifically the companies Blockbuster and Netflix. Starting in the early ‘80s, Blockbuster was the leader in video rental. Unfortunately, the company went out of business in 2013, largely because it failed to change with the times and use technology to advance (unlike its competitor, Netflix). Netflix started in 1998 with renting videos through the mail, which were ordered online through a subscription model with no late fees. The company continued to embrace technology and adapt to changing consumer trends, wants and habits. Then, starting in 2007, Netflix added the ability to stream thousands of shows and movies. Today, the $12 billion company has 130 million subscribers, which is more than the number of cable TV subscribers.
From a business standpoint, think of a process within your company that involves a lot of steps and paper. Often times we are keying data into spreadsheets or disparate systems. We might be handing a paper copy to someone who then has to enter that data somewhere else. Errors are likely happening and the people involved might be frustrated because the process is manual, cumbersome and takes longer than it seems it should. Now think of how technology could streamline that process for you. How much time would you save? How much better of an experience would you create for your team and how much faster could you fill client needs?
By the end of 2019, digital transformation spending will reach $1.7 trillion worldwide, a 42 percent increase from 2017. (source: IDC). Digital transformation is not going away, so here are some tips to help you use it to your advantage.
Phase 1: Creating Your Digital Transformation Strategy
You’ve heard the saying, “A journey of a thousand miles begins with a single step.” In the case of digital transformation, as with most major change initiatives, your first step needs to be creating your strategy. What is your goal and how will you accomplish it? During this process, you will also need to assess where you are in terms of your current process, systems you are using, and existing technology infrastructure and security. In this post, we give you tips and questions to answer to help you develop a defined strategy and clear objectives.
- Create Your Vision: Determine your overall transformation objective. What are you trying to accomplish? What problems are you trying to solve? When doing this, define how your overall objective applies to all levels and areas of your organization and your customers. Companies that do this are far more successful with their digital transformation process than those that don’t.
- Determine the Competitive Landscape: Investigate how your competitors are transforming. How is your industry transforming? How about other industries that affect yours? Find out how you can use technology to create a competitive edge.
- Define Your Desired Client Experience: What would improve your customers’ experience? (Ask them for their opinion!) Then design your desired experience for how your clients interact with you. Effective digital transformation places value on user experiences; for example, providing clients with the data they want, when and how they want it.
- Define Your Desired Team Experience: What does your staff believe needs to change? (Again, ask them!) What is your desired experience for your employees in terms of processes they will follow? Focus on the experience the technology will enhance for the team to make their jobs more efficient, collaborative and effective.
- Assess Existing Technology Capabilities and Processes:
- Perform a Business Process Assessment – Review what happens from the time an order comes in until your product or service is delivered. Going through this exercise can reveal “bottlenecks” within a particular step that are slowing the growth and efficiency of the business.
- Perform an Application Assessment – Review the systems you are currently using to determine what is working for you and what the limitations are. Could there be a better way to access your data? This assessment will help you evaluate whether you need to upgrade, replace or create new applications.
- Perform a Platform Assessment – Review the infrastructure you have in place for data storage. Whether it be public cloud, private cloud, a hybrid of the two or an on-premise data center, determine how effective it is for what you are trying to accomplish.
- Perform a Security Assessment – Review what measures you are taking to protect your data and if it is sufficient. Since you will likely be adding to the amount of data you are using, ensuring proper security is key as you go through digital transformation.
- Determine Technology Needs: Based on the assessments you completed, define where the gaps are and what actions you need to take in order to put the proper technology infrastructure in place. Select technology providers and solutions that will help you get there.
- Decide How You Will Rally the Team: How will you engage your team in the process? Common barriers are fear, change resistance and negativity, so you need to be prepared to communicate the reasons for the changes with a focus on the benefits (and what’s in it for them). Having people assigned to drive and support the initiative will also help to create a smooth process.
- Define How You Will Measure Success: What results will enable you to consider this a successful initiative? Create timelines and key performance indicators to ensure you make progress and reach your main objective.
The digital transformation journey is complex. Creating a strategy and performing the necessary assessments will help to ensure you reach your objectives. If you don’t have technology leadership in the company, consider bringing someone onboard or work with a technology firm that can provide a virtual CIO service. Similarly, engaging an IT firm with expertise in digital transformation and the necessary assessments will help you succeed in this process.