What is digital transformation? Surely you have heard this term in the business world many times. According to researchers at the Massachusetts Institute of Technology Sloan, it is the integration of digital technologies (social, mobile, analytics, and cloud) that changes the principles of business and develops it through innovation. Focusing on changes makes sense given the speed of change in the business world.
89% of organizations consider digital transformation a priority. But if you feel that your efforts have stalled, you are not alone. 84% of attempts do not lead to the desired results. To approach it productively, you need to understand the principles and understand how to adequately evaluate digitization.
Digital Transformation is a powerful tool that has revolutionized the way businesses operate, providing them with immense opportunities to create value for their customers. It enables companies to automate tedious tasks and optimize their workflow in order to maximize efficiency. By harnessing AI and Machine Learning technologies, businesses can offer personalized customer service experiences which helps build stronger relationships with consumers leading to increased loyalty and revenue growth.
Why Digital Transformation Matters
Digital transformation impacts every aspect of an organization, from the way it operates to the customer experience it provides. As businesses become increasingly reliant on technology, digital transformation can be a game-changer in terms of efficiency, cost savings, and profitability. However, it’s not just about buying new tools; it’s about changing the mindset and culture of the organization to embrace digital solutions fully.
How digital transformation affects the corporate success
Creating innovative products receives a lot of press attention, but not always with a positive effect. For example, the digital instrument display of the Ford GT 2017 supercar was ambitiously advertised as the dashboard of the future, helping the driver to be less distracted. Sounds like a revolution in car manufacturing, doesn’t it? Nevertheless, Ford’s share price has fallen by almost 30% in the last three years.
Moreover, Digital Transformation allows companies to stay competitive in an ever-evolving digital world by creating new products or entering new markets faster than ever before; those who fail to embrace this technology risk being left behind by competitors who have adopted it successfully. Data analytics are also made possible through Digital Transformation as real-time data provides insights into trends and opportunities allowing improved agility when adapting quickly according to changing market conditions.
Another example is the aircraft manufacturer Airbus. The construction of the Airbus 380 aircraft also included notable modernization. In addition, Airbus also used big-data principles to modernize customer service. As a result, over the past three years, the stock price has either risen or remained stable.
The approach of General Electric is another example of successful modernization using new technologies. Engineers and managers changed the course of industrial operations using technology, and then used the results and conclusions to help customers do the same. In other words, despite the fact that innovations often impress everyone and do not disappoint, for changes on a global scale, it is necessary not only to have new product-related novelties.
What is needed for productive digitalization?
There is no doubt about the value and mandatory use of the following tools in digitalization:
- Social networks;
- Mobile devices;
- Analytics;
- Cloud technologies.
However, successful digital transformation at the enterprise level goes beyond just tools. It is important to also have a clear concept and overall understanding.
Firstly, it is necessary to have a clear understanding of the goal of the transformation and how processes will change. Researchers from “Leading digital” found that firms with a strong image and serious approach to digitalization are more profitable and have a higher market valuation than competitors without such a business plan. Effective modernization at the enterprise level should encompass fundamental changes in three areas:
- Customer experience;
- Operational processes;
- Business models.
According to the Altimeter Group study, in 2014, 88% of companies conducted digitalization, but only 25% of respondents created a customer journey map. In 2016, their number increased to 54%. The trend is positive, but there is still a long way to go.
5 questions to ask before starting digitalization
Answers to the following questions provide additional insight into the organization’s situation on the path to major changes:
- To what extent (how clearly) is the transformation strategy defined?
- Which elements of the business model will you change (for example, value proposition, delivery channels)?
- Are you sufficiently exploring new trends and companies that have achieved success in digitalization?
- Does the company’s management have a common understanding of the customer journey and target audience?
- How actively are you already implementing the latest technologies to restructure cross-functional business processes?
Tips from successful corporations
Use the one-page principle. A detailed scheme is needed – just one page for the customer journey map, one page for the business model, and one page for the process relationship map. Of course, the schemes should be clear, detailed, and understandable, but a one-page presentation attracts attention and encourages dialogue.
No matter what path you choose for digitalization, it is important to consider the central role of customer experience, process management capabilities, and clear plans.
Conclusion
Digital transformation is a journey, and it’s essential to assess your organization’s readiness before embarking on it. By asking these five key questions, you’ll be better equipped to create a robust digital transformation strategy that aligns with your business goals and objectives. Remember, digital transformation is not just about technology; it’s about changing the culture and mindset of the entire organization.
