If you are wondering how to innovate on your business model and do it successfully, digital transformation is the way to go. However, you must first identify the digital transformation strategy that best suits what you are looking for. According to Forbes (2019), 70% of companies either have a digital strategy being implemented or are working on one.
Aside from operational improvements in management and outcomes, a digital transformation strategy will enhance employee satisfaction, customer engagement, and business innovation levels. This is when you need to understand what is digital transformation for your company. It is less about the technological application and more about the business strategy that you want to implement. This will bring you further revenue growth needed to take your company to the next level.
Why Do You Need to Consider Digital Transformation for Your Business?
As a plan of action, a digital transformation strategy will integrate different business areas through technology to change how you create, operate, and deliver value to both internal and external customers. It also implies a cultural transformation in procedures to rethink how things were done to convert old operating models into modern ones. These will better and more quickly respond to market dynamics.
Beyond implementing digital activities, digital transformation involves an open-minded vision in which technology is not the solution. Instead, it’s the way to improve access to data analytics, technologies, software, and automatization to open a world of opportunities. In this sense, alongside transformation, business leadership and culture matter because these aspects can allow for accurate adaptation and subsequent results.
The implementation of this transformation begins with a statement that shows what to do next. Especially in a new world post-COVID, taking this step forward will allow a new business outlook on your business. This could involve automation over manual processes and a major digital marketing and user experience focus.
In fact, according to the International Data Corporation (IDC) Worldwide Digital Transformation Spending Guide (2020), the spending on the digital transformation (DX) of business practices, products, and organizations will continue at “a solid pace” with a forecast of growth of 10.4% to $1.3 trillion in 2021. Of course, it is important to know where your business is and where your industry is going to take advantage of this market opportunity and improve your differentiation.
While some companies may decide to go after a whole transformation at once or in stages, all of them experienced varying levels of success knowing that there are different approaches and goals. Going deeper than just taking advantage of technology to spur innovation, this move forward represents a reinvention of what previously existed.
Benefits of Implementing a Digital Transformation Strategy
There are many pros to implementing digital transformation, but here are the most important and visible ones:
By eliminating certain one at a time processes and using automated ones, a digital strategy will streamline communication and simplify the workflow. This will also encompass the departments of business, taking into account that digital transformation is a holistic strategy and not a fractional, even if it could start department by department. While some processes will need human intervention, others will be faster. However, these rely on the nature of the project or company. The truth is that you will see an impact in time, money, and resources.
Ameliorated Cost Savings
Speaking of money, maintaining older systems adds significantly to expenses when you look at the budget. In contrast, implementing a digital transformation strategy will imply a more efficient integration between technology and procedures. This in the end, will save time and money. This can be extrapolated to other areas of the business from the management data departments to the ones responsible for executing the plan of action.
Better Decision Making
There’s no doubt that data management is a challenge. With a constant and increasingly accelerated information bombardment, it is vital to have tools to follow up on data in real-time. By implementing a digital transformation strategy, you can gain insights and better awareness and tracking of those in the business area to take action faster and with more background information and more effective solutions. This will also allow you to develop a new outlook for your resources, procedures, and requirements. So you could prioritize those that are less effective or, instead, have more impact in terms of goals, objectives, and results.
Enhanced Agility and Flexibility
The faster you adapt, the more agility your company will develop. Additionally, a digital transformation strategy will provide more flexibility and better results for modalities that do not require human intervention. In this sense, flexibility is another related benefit. Because the software will allow you to use different routes of action instead of a few like in traditional systems. These have many limitations including collecting information and implementing certain procedures.
Increased Employee Engagement
Management software focused on human capital will help make sure that your employees have coaching, training, and support in the way they need it to get their insights into this matter. If that is not the case, you can identify what your employees expect and decide routes of action to improve what your business can offer them to keep the team motivated.
These tools can also provide an efficient, intuitive, and transparent work environment. Consequently, this will help employees to organize, identify and execute patterns and procedures to deliver more valuable outputs to the business or to specific projects. As relationships are enhanced, friction between team members will be reduced.
Increased Customer Satisfaction
Both customer internal (employees) and external (clients) experience will be ameliorated as the digital transformation will simplify their lives. This given they will be updated with processes that better solve their problems or anticipate those arising from them. Likewise, better analytics will allow a greater understanding of potential customers and loyal customers. Because teams will have more insights and data to focus on more targeted efforts that increase conversions and attract customers.
Aside from this, your business will be able to provide more information to the customer on specific details. This will also give them a better understanding and, thus, better decision making. In the best of cases, this will be meaningful for the business because the digital transformation will reduce misunderstandings and add value. If you implement this accurately both on the backend and frontend procedures, the mentioned will be seen by the customer in one way or another.
In fact, Statista (2021) revealed in its Primary reasons for digital transformations in organizations worldwide as of 2020 survey that customer demand (25%) and competition offering digital experience (25%) are at the top of motivations to implement a digital transformation strategy over-improved earnings (19%).
By increasing your business or project offer, you increase its market value and, even, its differentiation. Consequently, your business will rely more on higher customer perception, both in more adaptable and capable systems and operations. Furthermore, it will achieve a sustained digital growth process. As simple as it sounds, reducing costs and maximizing opportunities will take you to the next step.
Implementing a digital transformation strategy will improve your operating model. It will make easier to track and optimize the results and scope. This includes supply chain management for a better understanding of logistics. Your profitability and revenue growth will be supported by better market perception.
Managing more data also requires customer and business information on what, how, and where they get it. But tools like cloud-based applications, big data, and encryption provide resources to increase transparency. Additionally, more clarity in procedures will lead to better tracking and evaluation of patterns, trends, and inconveniences that can be quickly followed and solved.
More Differentiated Competitive Advantages
As you improve key areas of your business, you will gain a competitive advantage both in features and functionality for internal and external procedures and customization. This innovation will bring new insights and tools focused on feeding your market strengths and opportunities.
Key Factors to Having a Good Digital Transformation Strategy
Beyond choosing a digital strategy based on your business’s strengths, weaknesses, opportunities, and threats, there are certain commonalities to consider:
Customer Experience and Engagement
There is a need for human integration in the creation and implementation of a strategy to succeed in this transformational change. So you must keep in mind the customer view alongside the technology used. Communicating how these changes will impact the value of the business in procedures, products, and services will allow both internal and external customers to understand the impact of this digital transformation strategy. On the staff side, they will be more willing to collaborate and adapt to the new realities of the company. Clients will then be able to make decisions regarding these new proposals.
A Digital Mindset
Innovation requires a mindset change from a traditional business model to a digital one in which the plan of action will not be linear, but instead will be build-measure-learn based. Thus, the modification of procedures should mean cross-team participation. As a result, experiences and feedback gain relevance for developing a collaborative framework and not just a technological one.
A Culture of Innovation
Knowing that insights lead to innovation and propitiating a workspace in which the response to needs becomes to ideas and creativity that functionally solve them will mark a guideline for the digital transformation that will follow. Additionally, a culture of innovation will eventually create competitive advantages for adaptability and agility. This will prepare the team and business structure to face the challenges that emerge when diagnosing a business:
Enabling and integrating artificial intelligence (AI), machine learning, the Internet of Things (IoT), blockchain, big data, and cloud adoption will increase the business capabilities and opportunities to find solutions to connection, security, and real-time issues in emerging technologies.
Data and Metric Analytics
Despite being a more focused quality process, quantifying the data and analyzing the metrics will provide you with long-term value to monitor how your digital transformation strategy is going and key factors of effectiveness like insights and business processes. This should also be extrapolated to the return on investment (ROI) to modify the plan of action if need be.
How to Implement your Digital Transformation Strategy
The initial diagnosis of your current business situation must include strengths, weaknesses, threats, and opportunities. That initial assessment must then jump to strategic goals, key performance indicators, and potential growth opportunities as quantified analytics.
Through this analysis, your team will be able to list the company’s resources in terms of time, human capital, and budget. It will also understand the customer’s motivations, desires, behaviors, and preferences, and the marketplace competitiveness. You can then establish a digital transformation strategy and the tactics to implement it. Make sure that you define a digital strategy in which you reinvent insights, assume agility and flexibility as an operational approach, and execute your strategy with expertise.
Being prepared to be a leader is as important as choosing the best strategy for your business situation. In addition to having a vision on how to transform the company, soft and hard skills are necessary to inject motivation into the team, convince, and inspire them. Giving tools, training, and support to the employees will also allow them to quickly assume what is a digital transformation. More importantly, it will impact what it implies for their work environment.
But, beyond that, clarifying to the team what role they will play in this major change and how their inputs will be measured will offer them a new perspective. This one would be related to the future of their career and how important it is for their business. At this point, business culture is becoming increasingly relevant. This will propitiate a faster alignment through a cross-functional team connection and commitment to the company.
To implement this major change, you need to count on the advice and guidance of a digital strategy agency. A digital transformation requires a management consultancy to help build a more efficient business that is ready to face the fast-changing market and provide solutions to meet the growing needs of the customers. Advancio is ready to take up the challenge as an IT partner and guide you to get your digital transformation strategy running.