In an increasingly digitalised world, the ability to adopt new technologies has become a basic survival skill. This is especially true for businesses, large and small.
In this article, we define digital transformation. We also explore the most burning issues associated with it, such as:
On the one hand, digital transformation streamlines business operations. It improves productivity, upgrades user experience, and saves costs. Those who cannot keep up with such superior services are doomed to fail.
On the other hand, digital transformation opens up new revenue opportunities. It also overhauls the way businesses provide value to their customers. Businesses that fall behind will thus find themselves more and more outclassed. The clock of digital transformation is ticking. And it does not stop for anyone.
Digital transformation is the use of digital technology to alter internal processes, culture and user experience while introducing new business models. Digital transformation aligns businesses with the market- and business requirements of the digital age. It results from digitalisation.
In the context of a business, digitalisation is aimed at a single process. For example, automating the process of invoicing is digitalisation. Such a change does impact the way business is done. More precisely, it makes it easier for personnel. It does not impact the entire business, however.
If that same company digitalises several other aspects of its operation, the result is a new business. A probably more cost-efficient one, offering superior user experience and much quicker services. Such a business is a digitally transformed one.
Eventually, when taken far enough, digital transformation opens up entirely new opportunities/revenue streams for the business. At one point, the operation may end up on an entirely different path than before its digital transformation.
Let us take a look at a mundane example that illustrates the differences between digitization, digitalisation and digital transformation.
Let’s suppose that you own a vast collection of VHS movies. At one point, you decide to have them transferred to a digital format (.avi, .mp4, etc). You have just digitized your collection.
Taking yet another step on your digital journey, you buy a smart TV. You transfer your collection to USB sticks and watch your movies exclusively on your new TV. You have digitalised the process of enjoying your movie collection.
Using your smart TV, you discover a streaming service. This service gives you access to all the movies in your collection and more. Soon, you find yourself using this service alone for entertainment. Through it, you get hooked on video blogs and gaming. Your entertainment needs have just been digitally transformed.
The reasons for embarking on digital transformation are different from one business to another. The common denominator, however, is the fact that digital transformation is needed to ensure the continued survival of every business.
Change is the only constant in the business world. Every company needs to evolve to survive. Evolution translates to more efficient processes and new ways to serve customers. This need for continued evolution is the reason why most businesses turn to digital transformation. They do not do it to be fashionable or because it is exciting. They undertake this expensive and risky move because they deem it necessary for their survival.
The need for constant evolution grows more pressing and acute as the world speeds up. According to Vanguard CIO John T. Marcante, back in 1958 American corporations included in the S&P 500 index remained in that index for an average of 61 years. In 2011, that same average was just 18 years. Nowadays, the index revises its constituents every two weeks.
Digital transformation is a long-term investment. More and more executives are recognizing this fact. To savvy executives, digital transformation offers opportunities instead of hurdles.
There are three choices business leaders can make concerning digital transformation:
According to Salesforce, the reasons for digital transformation in business are numerous.
The benefits of digital transformation far outweigh its risks. Most of the risks entailed are tied to missing out on digital transformation.
Some of the benefits are:
Missing out on these benefits is, in and of itself, a major risk.
When working out a digital transformation strategy that suits your needs, consider the following:
Set a roadmap based on the above, and define it in detail. Consider timeline, expectations, roles, responsibilities, and metrics to measure success.
The goal of digital transformation is to generate value. The objective is accomplished by improving business processes, UX, and cost-effectiveness.
According to 2,000 business executives surveyed by cognizant.com, digital transformation creates value through five main paths:
The first step of your digital transformation journey is to recognize the fact that you need to act.
Most business executives assume that their side is far behind the competition in this regard. Do not grow disheartened. It is never too late to do the right thing.
Also, the perception of your company being behind is likely a false one. The press’ overexposure of the frontrunners promotes such skewed views.
A typical digital transformation journey comprises three main stages.
The value definition stage includes the first steps, such as securing management support, investment, and setting goals. Without senior management support, it is impossible to commence the digital transformation journey. This support has to translate to funds invested in the effort.
During the launch and acceleration stage, digital culture is introduced and nurtured. This is the stage of lighthouse projects and the appointing of teams. It is imperative to get the lighthouse projects right. You will want to enlist the help of a specialist, like Scrive, at this stage. Lighthouse projects provide inspiration for the follow-up stages of the digital transformation journey.
The scaling stage is about new model adoption and capability building. During this stage, personnel skills have to be boosted. Business leaders need to understand the strategic value of IT.
Digital Transformation can mean different things for different businesses. There are a few common elements across all digital transformation ventures though. These pillars define a digital transformation framework:
According to enterprisersproject.com, digital transformation entails four different roles:
Digital transformation should always start with the setting of a goal. Securing the support of management is equally essential.
Past that, businesses can choose to dive into the transformation process or to ease into it.
Choosing Scrive’s eSign solution is one way to ease into the flow of digital transformation. eSign allows users to manage all their electronic signature needs in one place. Integration is almost effortless.
It is not easy to justify the costs of digital transformation through ROI. According to a prophet.com survey, 69 percent of digital transformation leaders found it difficult.
Still, using the right Key Performance Indicators (KPIs), you can measure the success of your digital transformation.
Some KPIs to consider in this regard are:
The main driver of digital transformation, the need for growth, is what makes scaling necessary. There can be no growth without the proper scaling of digital technologies within an organization.
When it comes to scaling, startups and small businesses enjoy a significant advantage. They do not have legacy systems to phase out. From their perspective, scaling is about resources. Digital technologies offer plenty of opportunities in that regard.
Such businesses can expand their human resources through managed services. They can add to their computing needs through the cloud and they can increase productivity through automation.
Large organizations need to focus on efficiency. Digital transformation for such companies is much more transformative, as they likely have legacy systems and technologies to replace.
Digital transformation can be a challenging, intricate, and costly process. It is easy to get wrong. Most of the challenges entailed by digital transformation stem from its improper execution. These pitfalls include:
A proper digital transformation consultancy can help with all the above issues and more. Scrive offers outstanding services in this regard. Their customer case section paints an accurate picture of what they bring to the table.
They do not just provide solutions. They also focus on making integration and adoption as painless as possible.