Like it or not, we are rapidly moving into a technological era, and at an accelerated pace. Intricate processes that once took multiple hours can now be automated and optimised.
It has become imperative for businesses to jump on the trend of digital transformation or get left behind.
In this article, Propeller explores the challenges and opportunities of the evolving digital ecosystem- including agile working, customer centricity and emerging technology.
McKinsey define digital transformation as:
“the rewiring of an organisation, with the goal of creating value by continuously deploying tech at scale.”
This is how value is added for customers, and how business operations are optimised.
Digital transformation builds a competitive advantage by continuously deploying tech at scale, improving customer experience and reducing costs. These long-term efforts will never cease. This is because technology is constantly evolving and providing avenues for those in-the-know to boost their company.
For example, as we have speculated over the dynamic growth of AI over the past year, this technology is now integral to business success and digital transformation.
Successful digital transformation requires a combination of coordinated actions. Here are some critical capabilities for successful digital transformation:
Creating strategy to pinpoint key areas possessing significant value for a company, such as the customer journey, is vital. Digital transformation must be steered by a clear guide that considers the resources required to deliver impactful change.
Whether in-house or administering expertise from agencies, achieving business success through digital transformation needs digital talent on-hand.
A scalable model
Digital transformations rely on cross-functional teams bringing people from different departments together. Scaling requires an updated operating model. There are three primary operating models to consider:
- Digital factory model
- Product and platform model
- Enterprise-wide agility model.
Teams must be able to innovate independently. Every person within a company requires access data, applications and software development tools that they need. Distributed technology systems can be aided by recent technology advances, including cloud computing and the availability of developer tools.
Access to data
Reliable, current data is crucial to business success. Organised data systems should produce data that can be accessed by teams across a company, and should be continually assessed and updated. Strong governance is required to enable these capabilities.
Strong adoption and change management
In the past, the technology adoption cycle was a linear process of gathering requirements, developing solutions, testing, and training. With so many steps and processes, it is no surprise that this led to low adoption rates and lower business value. Digital transformations now follow a simplified process of designing, prototyping, collecting feedback, and improving the solution so it can capture the full value potential.
Companies must consider adoption and scaling at the beginning of their transformation so they can build in the resources needed to deliver the change.
Digital transformation cannot reach its full potential without coordination across these areas.
According to a report created by Cisco, over 70% of small businesses are accelerating digital transformations. Is this necessary towards my business success? We think so, and here are some reasons why:
Improving products with enhanced services
Through digital transformation, a company can access many efficiency boosting products. This helps areas such as customer management and boosting profit.
Boosting efficiency and scalability
In an ever-digitising world, manual processes are fast-becoming inefficient and antiquated. Other than being outdated, they can also be unreliable, as there is more room for human-error in manual processes. In turn, this increases risk and overall cost. Meanwhile, digitised processes reduces risk and increases efficiency.
Access to data insights enables informed decision-making, identification of trends, and proactive strategic planning.
Simply put, when a system is working at increased productivity, if it is cost-effective it is a great way to reduce costs.
Preparing for emergency situations
Being prepared for a pandemic isn’t something anyone would have seriously considered ten years ago. On the other side of COVID-19 however, it should be commonplace for all companies- regardless of size- to have a system in place.
The ultimate explanation as to why digital transformation must be accelerated is that to survive in today’s harsh economy, a business must move fast and adapt to changes, or else it may struggle with being relevant, and competitors may take the lead in the market. If businesses are able to accelerate digital services, they may experience huge growth within a short period.
Staying on top of trends and demands in your industry is vital to keep business moving and growing. Pivot, scale and transform with effective digital transformation tools that welcomes a new audience without alienating existing and loyal customers.
Why is digital transformation important for businesses?
Digital transformation is crucial for businesses to stay competitive and relevant in today’s rapidly evolving digital landscape. It enables companies to gain valuable insights from data, reach wider audiences, and deliver personalised experiences to customers. Embracing digital transformation can lead to increased productivity, cost savings, and the ability to seize new growth opportunities.
What are some challenges companies may face during digital transformation?
Businesses may encounter and should be prepared for:
- Resistance to change: Employees may resist adopting new technologies or processes due to fear, lack of knowledge, or concerns about job security.
- Talent and skills gap: Organisations may face a shortage of skilled professionals with expertise in emerging technologies. This must be remedied with a recruitment push to accommodate a company’s digital transformation plans.
- Legacy systems and infrastructure: Outdated systems and infrastructure may pose integration challenges and require significant investments to bring up-to-date.
- Data privacy and security: Protecting sensitive data and ensuring compliance with privacy regulations can be complex. This is particularly the case with increased digital interactions and data collection.
How long does digital transformation take?
The duration of digital transformation varies depending on the size of the company, the scope of transformation initiatives and available resources. It is an ongoing process rather than a one-time project.
Some companies may achieve significant milestones in a few months, while others may take several years to fully realise their digital transformation goals.