Digital transformation is a critical strategic imperative for all businesses, from the small businesses to the large enterprises. This message comes through loud and clear from seemingly every keynote, panel discussion, article, or study related to how businesses can stay competitive and relevant as the world becomes increasingly digital.
Broadly defined, digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers by harnessing the fullest potential of the modern digital innovations. Many business and non-business organisations have been trying out different strategies by introducing digital solutions to certain functional areas such as accounting and attendance taking under HRM, and some have even gone paperless and adopted ERP systems and eCommerce as part of their digital transformation drive as well. As a result, a great number of them are at different points on their journey to digital transformation; however, few of them have a holistic digital transformation strategy.
Many leaders, from small businesses to large enterprises, share the belief that to succeed in the digital era, all organisations should look at digital transformation seriously, and pay high level attention especially to the rapidly evolving areas of Cloud Computing, Cloud BI, Edge Computing, eCommerce, IoT, As a Service, AI, Chatbots, DAM, Big Data, Machine Learning, Automation, Digital Marketing, Digital Payments, and the likes.
Also, it’s essential to understand that digital transformation is driven by the need to rethink old operating models, to experiment more, to become more agile in your ability to respond to customers and rivals – the unchangeable business mandates that you can’t resist, ignore or avoid. While digital transformation isn’t exclusive to the business organisations, in the scope of this article, we are going to discuss it predominantly in the context of business organisations.
When the Covid-19 broke out in early 2020 and the governments started imposing all kinds of travel restrictions and even complete lockdown of cities and areas to prevent the transmission of this highly contagious virus or at least slow down the rate of infection, businesses and other organisations had to adopt new practices aided by digital technology such as ‘work from home’, ‘virtual meetings’, and ‘selling online’ to keep their operations running. This gave significant momentum to the call for digital transformation as a practical technology-driven solution to the current business problems rather than an abstract or notional concept.
High rates of Internet penetration, improved IT literacy, greater access to tools and technology such as smart mobile devices and PCs coupled with the sheer necessity to make a living and meet the everyday requirements in life made digital transformation a practical and realistic goal for businesses.
Even if the term ‘digital transformation’ sounds such a grand and overwhelming concept that might even unnerve you, it’s quite simple in practice. Of course, it varies from business to business and from organisation to organisation depending on the nature of operations and activities carried out by each.
Suppose you’re running a small grocery, but fewer and fewer people seem to drop by to shop in person at yours. When you share your concerns and observations with a friend or family member, they float the idea of selling online to you. You also realise it’s a valid idea and start working on that. Whether you take your whole business online or start an online shop while running your physical store, it’s an act of digital transformation in essence.
Another business may seek to interview candidates through a virtual meeting platform such as ‘Zoom’ or ‘Go to Meeting’ or have their staff work from home by facilitating them to schedule work, interact, communicate, and share information online. This is also an instance of digital transformation. Likewise, all or some functions of a given business can be digitalised, which amounts to digital transformation.
Digital transformation in the integrated, connected and holistic sense can, among others, entail the transformation of:
Now this is not an exhaustive list. Also, these aspects are sometimes connected and overlap. But a holistic digital transformation should cover all this.
As mentioned earlier, digital transformation is multidimensional and there are four different types of digital transformation.
A significant portion of corporate activity has been in business processes. Data, analytics, APIs, machine learning and other technologies provide corporations with important new ways to reinvent processes throughout the corporation - with the goal of driving down the costs, cutting cycle times, or enhancing quality. Airbus is a prime example of process innovation on the shop floor where they have engaged heads-up display glasses to enhance the quality of human inspection of airplanes. Process innovation in customer experience has been pulled off by Domino’s Pizza that has completely re-imagined the food-ordering process. Some other companies are implementing technologies such as robotic process automation to streamline back-office processes such as accounting and legal. Process transformation can produce significant value and embracing technology in these areas is fast becoming the table-stakes for forward-looking businesses.
Some companies are leveraging digital technologies to transform traditional business models. While process transformation focuses on select areas of the business, business model transformations are aimed at the fundamental building blocks of how value is delivered in the industry. Examples of this kind of innovation abound ranging from Netflix' reinvention of video distribution, to Apple's reinvention of music delivery (I-Tunes), and to Uber's reinvention of the taxi industry. But this kind of transformation is happening elsewhere too. Insurance companies like Allstate and Metromile are using data and analytics to un-bundle insurance contracts and charge customers by-the-mile - a complete change to the auto insurance business model. And there are numerous efforts underway to transform the business of mining into a wholly robotic exercise, where no humans travel below the surface, even this feat is yet to be achieved. By changing the fundamental building blocks of value, companies that achieve business model transformation unlock significant fresh opportunities for growth.
Despite the surprisingly little focus it’s receiving still, there’s massive opportunity in the area of domain transformation. New technologies are redefining products and services, blurring industry boundaries and creating entirely new sets of non-traditional competitors. What many executives take for granted is the solid opportunity for these new technologies to create completely new businesses for their companies beyond currently served markets. And often, it is this type of transformation that offers the greatest opportunities to generate new value. eCommerce giant Amazon entered a wholly new market domain with the launch of Amazon Web Services (AWS), now the largest cloud computing/infrastructure service, in a domain formerly dominated by the IT giants like Microsoft and IBM.
What made Amazon’s entry into this domain possible was a combination of the strong digital capabilities it had acquired in storage, computing databases to support its core retail business coupled with an installed base of thousands of relationships with young, growing companies that increasingly needed computing services to grow. AWS is much more than mere adjacency or business extension for Amazon, it’s a wholly different business in a fundamentally different market space. The AWS business now accounts for nearly 60% % of Amazon’s annual profit.
First, you must be able to recognise the new marketing domains that hold massive growth potential and act decisively to seize the opportunities even if they may not be within your reach, yet.
Organisational transformation takes re-defining organisational mindsets, processes, and talent & capabilities for the digital world. Companies realise that digital calls for agile workflows, a bias towards testing and learning, decentralised decision-making, and a greater dependence on business ecosystems. And they act decisively to bring change to their organisations. Experian, the consumer credit agency and one of the most successful digital transformations, radically changed its organisation by embedding agile development and collaboration into its workflows and by driving a fundamental shift in employee focus from equipment to data, company-wide.
Cultural/organizational change is instrumental to sustained business success in the long run, but the companies that have done this best, look on building of these capabilities as a product of, rather than a prerequisite for, business transformation initiatives.
Depending on the degree of digital transformation you achieve and the relevance of your digital transformation strategy and the effectiveness of its execution, you will be able to reap a number of benefits for your business:
In spite of the global drive towards digital, it’s quite clear that the majority of businesses still have a long way to go on their digital transformation journey. The important thing is making a plan and starting because, whilst the future of technology may be uncertain, one thing is certain: doing nothing poses the biggest risk when it comes to digital transformation. Simply stated, it’s largely a case of ‘when’ rather than ‘if’. Whereas digital transformation is unique for every company, there are some important steps that everyone should consider as they embark on their transformation journey:
Digital transformation is something that varies more or less from one business to another. So, the critical first step when starting a digital transformation journey is to determine exactly what it means for your company. Look at the bigger picture and consider your challenges, maturity, industry, competition, value chain, customers, ecosystem and any other variables that critically affect your business. Use these insights to establish what digital transformation means to your organisation in its own specific context, why you need it, and what you are trying to accomplish.
Once you’ve established why you need to digitally transform, and what it will look like for your business, you need to assess your current digital capabilities. Take a closer look at your tech stack, your technologies and your employees. Practically anything and everything that is used to make your business what it currently is should be taken into account.
It sounds deceptively simple, but the majority of businesses will make their digital transformation strategy without evaluating how their organisation is currently operating, which can easily lead to either over or under-transformation.
With your objective set and capabilities clearly identified, you will be in a strong position to assess the various digital transformation alternatives that exist for you. Ranging from front-end transformations such as products and customer experiences to back-end transformation such as cloud and IT infrastructure – or solutions that transform both – there are a great number of options to take into account when you’re developing a digital transformation strategy. Consider for instance:
Your strategy may be a combination of internal and external transformations, or it might just be one small change. However, it is always important to remember that any digital solution is a means to an end; always keep your end goal in mind when formulating your digital transformation strategy to ensure you are delivering value to your customers and your business and not just adding new technology for the sake of it.
The next step is to get executive buy-in. Doing so not only demonstrates your commitment to digital transformation but is pivotal to getting your project off the ground and running – and to ensuring investment.
It may seem a relatively straightforward step in comparison to building out an entire digital transformation strategy, but it may take time and a significant amount of persuasion to secure the right buy-in so it's necessary that you set this in motion as soon as possible once you have a solid plan in place.
With the right strategy, and the right buy-in, you need to look at your digital transformation plan practically and develop an effective roadmap. You can’t change everything at one go, and you need to have a holistic plan of how your transformation will actually roll out.
What will you change first, what will have the highest impact and deliver the most value, and what is an unavoidable blocker to progression? Building out a roadmap to determine when everything should and needs to happen, how your business will progressively change, and what your digital transformation looks like over a certain time period, is quite essential.
One of the principal reasons why digital transformation projects fail is a lack of skills. It’s barely surprising, even given the fact that digital transformations are normally dependent on the latest and emerging technologies, that businesses may lack in the expertise and skills required.
When planning a digital transformation project, businesses must focus on securing the skills that are vital to driving their transformations forward. In fact, the failure to do so has even been shown to lead invariably to project failure and negative revenue…
Communicating your plan and vision for the company is just as crucial as devising the strategy. It’s widely held also that effective digital transformation is as much contingent on a cultural change within a business as it is a technological change.
If the value of a transformation isn’t communicated clearly, the company may not obtain intrinsic buy-in from employees which could pose an obstacle later on in the journey. Provide employees with transparency, a clear structure and plan, and proper training to prepare them for the digital transformation.
As the next step, put your digital transformation plan into action. And you must stay firmly committed to it from start to finish whilst doing the necessary adjustments from time to time.
Strategically executed, digital transformation will fuel your business growth because companies that have successfully implemented digital transformation initiatives are found to be three times more efficient and productive than the other companies, which are more efficient on cost and the bottom-line.
As a company that possesses hands-on experience in supporting your digital transformation efforts, at eBEYONDS, we’re excited to bring to your attention several digital transformation solutions, tools and services that we can offer to all types of businesses and organisations.
eBEYONDS, as an internationally renowned Digital Marketing & BPO Solutions company catering to a prestigious international clientele such as Amadeus, IFC (World Bank), and Dilmah, possesses extensive experience & technology know-how and on emerging trends & technologies, and considers it our fundamental duty to help you with the right knowledge on digital transformation. eBEYONDS has a significant footprint in eCommerce & Web Solutions sectors in addition to BPO and a host of other digital marketing and technology solutions sectors, which is central to any digital transformation drive that you embark on. Further, eBEYONDS with its Technology Training & Education subsidiary, PACE Institute is strongly poised to update your knowledge and help you rightly position your digital ecosystem.