Digital transformation
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:
- Why digital transformation is important.Reasons for digital transformation as well as risks and benefits.
- Digital transformation strategies. Defining goals.
- Challenges associated with digital transformation. How to get started, setting a roadmap and measuring results.
- Who can assist you with your digital transformation efforts?
Introduction to digital transformation
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.
What is digital transformation?
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.
What is the difference between digitalisation and digital transformation?
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.
Digitization example
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.
Digitalisation example
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.
Digital transformation example
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.
Digital transformation in business
Why digital transformation is important
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:
- Fall behind
- Keep up with the changes
- Emerge as a leader
Reasons for digital transformation
According to Salesforce, the reasons for digital transformation in business are numerous.
- Growth and scaling are two of the most important factors. Restructuring the business to this end is one of the prominent drivers of digital transformation.
- Proper customer engagement. In the digital age, the attention span of the customer has contracted. Consumers are more informed and more demanding. Businesses have to meet these new needs.
- The way digital transformation shapes market forces. Existing markets are threatened by new, agile competitors. At the same time, digital transformation has created new industries.
- The integration of new technologies. The internet, social media and mobile have all greatly impacted markets. Machine learning, blockchain and the Internet of Things are likely to exert similar effects.
- Changing the culture of the company. As scrive.com’s cases illustrate, a culture change through digitalisation is often a significant step forward.
- Ensuring the future competitiveness of the company. Or, as many executives call it, “future-proofing” the operation. Embracing digital transformation is a long-term investment, as mentioned. If done properly, it does lend the business a future edge.
- Reducing operational complexity and improving processes. This is the most direct and immediate benefit of digital transformation for business.
- The digitalisation of every aspect of life forces digital transformation on the level of businesses. The world as a whole and the economy is increasingly digitalised. Businesses that refuse to adapt will be out of place in the economy of tomorrow. Many of the world’s leading economies are already spearheaded by digital businesses.
Digital transformation strategy
When working out a digital transformation strategy that suits your needs, consider the following:
The way you would ideally want to couple technology and business.
The technologies that will make up the backbone of your company’s digital transformation.
Various industry- as well as non-industry tendencies and trends.
The risks your company’s leadership is willing to assume before, during and after digital transformation.
The impact digital transformation is likely to have on the customer experience you offer.
Set a roadmap based on the above, and define it in detail. Consider timeline, expectations, roles, responsibilities, and metrics to measure success.
What is the goal of digital transformation?
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:
- Accelerates revenue growth
- Increases speed to market
- Increases productivity on the level of the individual employee
- Improves customer acquisition and retention
- Improves competitiveness
How to get started with digital transformation?
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.
Risks and benefits of digital transformation
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:
- Improving UX, including offering a personalised and connected experience
- Ensuring the scalability of processes
- Eliminating inefficiencies, improving employee satisfaction and retention
- Securing a short-term edge over competitors
- Simplifying the integration of technology
- Streamlining the entire business
- Ensuring flexibility for future technology updates, as technology will continue to evolve at an ever-increasing pace.
Missing out on these benefits is, in and of itself, a major risk
- Missing out on digital transformation means being left behind. It is a costly mistake. From the perspective of the business, even a fatal one.
- Maintaining legacy processes will be costlier and costlier. Such systems do not scale and are less efficient. And very soon, they will be incompatible with everything else out there.
- Haphazard digital transformation will likely be unsuccessful. Spending a lot of money on something that yields no value is definitely a risk as well.
Digital transformation strategy
When working out a digital transformation strategy that suits your needs, consider the following:
- Your digital transformation objectives. Make sure you know where you are going with it.
- The way you would ideally want to couple technology and business.
- The technologies that will make up the backbone of your company’s digital transformation.
- Various industry- as well as non-industry tendencies and trends.
- The risks your company’s leadership is willing to assume before, during and after digital transformation.
- The impact digital transformation is likely to have on the customer experience you offer.
Set a roadmap based on the above, and define it in detail. Consider timeline, expectations, roles, responsibilities, and metrics to measure success.
What is the goal of digital transformation?
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:
- Accelerates revenue growth
- Increases speed to market
- Increases productivity on the level of the individual employee
- Improves customer acquisition and retention
- Improves competitiveness
How to get started with digital transformation?
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.
How to start digital transformation?
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.
Digital transformation ROI and KPIs
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:
Sales, revenues
Customer acquisition
Customer retention
Customer experience
Customer loyalty
Time to market
Usage of the collaboration tool
New system implementation time
The number of ideas
Budget for innovations
Digital transformation at scale
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 challenges
How to avoid common pitfalls?
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:
Not setting a clear and realistic goal
Not having the right leadership
Not focusing on the customer experience
Relying on ineffective internal communication
Not having a proper strategy and guidance
We are here to help
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.