Digital Transformation: What you Need to Know (with Examples)

May 22, 2019

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What kind of business would you say you’re in—healthcare, manufacturing, finance, or professional services? Think again! Actually, we are all in the technology business. 

Whether you’re ready to fully embrace it or not, technology is shifting traditional business models to the new economy driven by innovative technologies, also known as digital transformation. While we may not be digital natives like Amazon, Tesla, or Uber whose business models were born in the cloud, chances are many of your processes have already, or are beginning to, shift from physical to digital, from paper to pixels, product to service, transaction to subscription—you get the idea. Moreover, this trend is on the rise, in fact: IDC estimates that 40 percent of all technology budgets will be spent on digital transformation initiatives, with businesses spending more than $2 trillion by 2019.

Let’s take a look at some trending technology: Blockchain for financials in business, Artificial intelligence for sifting through and optimizing your data, Application Development for enhancing efficiencies, and Chatbots for better customer service. While each of these trends features new technology and innovative ways of approaching business challenges, they are all implemented and running with, or after, collecting data to anticipate customer behavior and improve employee efficiency.

So, what is the Digital Transformation? What are the elements of the transformation that matter the most? Let’s figure it out in this blog!

What is Digital Transformation, Exactly?

Digital transformation is the shift from traditional business to new data-driven innovation through an analysis of people, processes, and products. At its core, digital transformation is about harnessing new technology to improve the way your business runs. If you think about big data, for example, you should be looking at the ways your company operates and using analytics to create intelligent, actionable ways to improve your processes. Successful digital transformation is an end-to-end process that redefines how your business engages customers, operates internally, and delivers products and services.

Digital Innovation Pioneers

Take a look at John Deere, a 180-year-old farm equipment manufacturer who saw and seized their opportunity in 2012. To create added value for their clients and suppliers, they created the open platform, MyJohnDeere. The app aggregates production data, equipment information, and farm operations through a variety of software and sensors that analyze everything from soil conditions to fuel costs, providing farmers with real-time insights and connected user experience. Shifting business models to embrace digital opens doors to lucrative new opportunities, allowing your business to reimagine customer experiences and fostering tighter, more meaningful relationships.

The Washington Post is another example of a company that has transformed itself by entering the digital landscape, guns blazing after Amazon head honcho Jeff Bezos bought it. The Post understood what today’s readers are looking for—speed, personalization, contextuality—and they delivered. Instead of viewing the web as a threat to their traditional publishing business model, they embraced it as a significant opportunity to adapt and innovate amidst an industry in decline.

Starting your Digital Transformation Journey?

Ready to get started? Start small and scale up. We live in a world where the next shiny business tool is merely a click away. Digital transformation, business transformation, DX―whatever you’re calling it―capitalizing on this innovative change in your organization is necessary to evolve to meet the changing landscape of your customer. We see digital and business transformation as one and the same. Fundamentally, transformation requires a systematic approach to reviewing where your business and your customers intersect. This connection is the cornerstone of your business success making the integration among your business platforms essential—an outcome of a full-on digital transformation strategy as opposed to a bolt-on approach.

Each industry will have different opportunities to digitize pieces of its business, but one thing remains the same: transformation only occurs when you take a holistic approach to understand your needs inside and out—who are you; where are you going; what do you sell; what makes you different; and what keeps you up at night? Your culture, skills, and gaps are the “people factor” that must be considered to help you identify how to apply digital tools and expertise.

5 Steps to Leverage Digital Transformation in Your Business

Step 1: Build Your Scorecard

To begin your digital transformation journey, you’ll need to build or refine your scorecard. What do you measure for your team, for your business? As an executive, to get started with the digital transformation you need to figure out what digital transformation means for your business. Typically, this begins with outlining and agreeing on your strategy for growth. Make sure your corporate strategy and goals are clearly defined before you ask your IT team, or even your CIO to research cloud providers, deploy blockchain, or find a new AppDev partner. Moving forward with cloud adoption (alone), for example, is not the way to build transformation within your organization or for your customers. Adding new technology does not transform your organization—alone.

Step 2: Listen to Your Customers

While this may seem like a no-brainer, the customer experience is a crucial reason your company should embark on a digital transformation journey. In fact, in many cases, your customers are probably driving your need for change.

Today’s customers find information differently, receive information differently, and expect their experience with you to be, well, different. With this customer shift underway, to remain competitive in any industry, you need to be listening to your customers and take action. According to Accenture, 75% of customers admit being more likely to buy from a company that recognizes them by their name, knows their purchase history, and recommends products based on their past purchases. Do you have this data readily available in your business today? Are you using it? If the answer is no, consider business intelligence a possible area to drive transformation within your business.

Step 3: Assess Your People

With your strategy confirmed and your optimum customer experience defined, the next step in the Workload Analysis is evaluating your people. How efficiently are they using applications? What is their process for executing your business today? How do they engage with technology? This analysis shows you how your employees spend their time, what areas can improve, and most importantly, how and where your business can recover wasted time.

An honest evaluation of your people is an essential step in uncovering transformation opportunities for your organization. Keep in mind, most people are naturally resistant to change. You’ll likely see a consistent theme in your organization with any change you’re looking to implement. Digital transformation is a change like many others your business might embark on. The age-old challenge remains, to keep your team equipped with the right knowledge, training, and resources to actively drive transformation. Empowering your team with the resources they need to thrive in the digital landscape is critical to long-term success. We may be living in a digital world, but the personal connection your employees have with your customers is still your company’s greatest asset.

Step 4: Evaluate Your Processes

When digital transformation impacts your operations, internal workflows will become more efficient, saving time, money, and morale. Ask yourself, and your executive team a straightforward question, and we bet you get a bunch of different answers. Are your systems, platforms, and applications working together to achieve the business outcome? Some will say yes, likely your CIO who just finished that 3-year ERP integration. Some will say no, likely your CMO who’s still waiting for the marketing automation and CRM tools to be integrated. You, as a CEO, might be on the fence, wanting to answer “Yes!” because you’ve told your peers to make it happen. Knowing ultimately that your answer is “No.” because while some pieces of the business are singing, you have a laundry list of suggestions from your customers and your employees on processes, tools, standards, and policies that need a closer look.

Step 5: Innovate Your Products

Here’s where the technology and products you use to run your business come into play, last. After you’ve taken a close look at why your business is successful, and the key factors of why―your people and your processes―now we recommend looking at and evaluating your infrastructure and technology environment. The underlying answer to your people and process success is the technology you deploy to aid in their roles and responsibilities.

Here’s where we recommend a full network strategic assessment. If you haven’t audited your technology environment in the last 18-24 months, it’s time. Armed with processes to tackle and empower employees, get your tiger team together and make sure IT has their network assessment complete. The questions to ask here: how can we align the needs of our people and processes to the technology environment we have and the technology investments we plan to make? Where is the overlap? If there isn’t any, you’ve been operating in a tech-first trap. The good news, now you see it, you’re addressing it, and we can help.

Let’s bring your company’s digital vision to life. By uniting strategy and technology, you’ll ask the right questions and connect the dots between people, processes, and products.

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