Digital transformation is one of the key things that organizations need to tap into today, but how does it work? Digital transformation is the integration of digital technology into all areas of a business which will result in significant changes to how that business operates and how it delivers value to their customers. Internally, digital transformation also offers a cultural change that requires organizations to experiment frequently. Organizations need be comfortable with failure and challenge the status quo to drive digital transformation and change forward.
Often, organizations will need to abandon long-standing business processes that their foundation was built on to implement new digital processes that are still being tested and refined.
What are the benefits of Digital Transformation?
There are many benefits to an organization undergoing a digital transformation. Some of these benefits include reduced costs, the implementation of a more customer-centric focus, better customer strategy, the consolidation of key departments and operations, and more accurate market segmentation. Most importantly, the implementation of analytics to give organizations the ability to combine all the data they have combined from customer interactions into a useful, actionable, easy to analyze format is another key benefit. This helps to not only optimize the running of the organization, but also improves the customer journey and overall experience.
Today, change within organizations is being driven by the customer, and in today’s always-connected world they often want content that is relevant to them and what their organization is doing – anytime, anywhere and on any device.
Digital Transformation and the “Always-Connected” Customer
It is imperative to keep up with today’s “always-connected” customer, and putting the customer first is already at the heart of strategy for many organizations. Digital technology has completely transformed consumer habits with mobile devices, machine learning, automation and apps allowing customers to get what they want at almost the exact moment they want it or need it. Digital technology has allowed a shift in customer expectations to take place, with today’s modern consumer being connected and online almost 24/7. They are aware of what they can do with technology and aware of all the apps at their disposal to make their lives easier and simpler.
Digital transformation has caused organizations to have a huge rethink on how they interact with their customers. This is now at the heart of becoming a truly digital business which is driven by customer data and analytics to refine products, services and buying patterns. For example, many B2B sales teams have looked at replacing cold calling with social selling via platforms such as Facebook, Twitter and LinkedIn.
Equip Your Organization for Digital Transformation
There are many digital technologies available including 3D printing, robotics, artificial intelligence, the internet of things and machine learning to name but a few. Therefore, finding ways to implement this and shape digital transformation within organizations should be one of the main priorities of every member of the C-suite. Chief Information Officers, Chief Data Officers, Chief Digital Officers and Chief Analytics Officers will benefit the most from shaping digital transformation.
Digital transformation was only previously seen in a handful of industries, such as music/entertainment, retail, travel and media. Today it is becoming more prevalent in other more traditional industries, such as banking, energy, healthcare and manufacturing.
Enabling your organization for digital transformation is critical in today’s world for business success, and the traditional three to five-year strategy model and planning process is often not as effective as it was in the past. Agile innovation for digital transformation is key and has been successfully implemented in companies such as Facebook, Twitter, Amazon and Google. These organizations have proven that there are real advantages to digital transformation in areas such as learning by doing, “fail fast” and developing innovative value propositions and adapting to changing requirements.
Enabling digital transformation through being able to address your customer’s needs in completely new ways is key to ensuring business success. Uber, for example, has done this in the transportation business and Airbnb has harnessed the power of digital transformation in the travel industry.
Building on digital strategic advantage can be done by leveraging on already existing business strengths such as customer relationships, brand recognition and niche products and services. The key to enabling this kind of digital transformation is to do it quickly – this is critical to becoming a fast adopter of digital technology to harness digital transformation.
If you look at key areas within your organization that can be transformed to make it more agile, cost effective and leaner through digital, many standardized processes and agile techniques can be used. For example, to accelerate digital transformation and provide more flexibility to your organizations strategy the use of external and internal data in a more structured way is the biggest way that it can be implemented throughout an organization. Not only can this data be used to look at ways to generate more revenue, it can also help to pinpoint new project capabilities and ideas.
Data analytics has often been responsible for creating brand new revenue streams, stand-alone businesses and new business departments. Additionally, technical platforms that allow devices data, products, applications and services to work closely together in diverse ways should become a key part of your organization’s digital transformation strategy. Those in the C-suite who embrace digital transformation often completely transform their organizations.
The Digital Transformation Journey
The digital transformation journey often starts with the customer and then works inwards, ensuring that every department is built around, and delivers, exceptional customer service. Often, this is about more than simply putting the “customer first”, and to meet their customers’ expectations organizations must ensure they are using the same technologies that their customers are also using. When a business truly understands its customers and how their desires and buying habits have changed, the costs of over-delivering are substantially reduced.
The most successful embracers view the change as a “digital transformation journey” and use that journey to help them understand how it can help them reach their business goals. There is no one single roadmap, and each organization will have a unique hierarchy, culture, goals and technology infrastructure. In some cases, the digital transformation journey does not have an end, and businesses must continually evolve to keep up with the pace of change in the digital world. There is, however, a general framework for ensuring the digital transformation journey is as smooth and effective as it can possibly be:
- Have a clear strategic plan for embracing digital technology.
- Test the plan with all those involved from the C-suite to the IT department to your customers.
- Collaborate with your employees on how the plan will look and be rolled out – get their “buy in”.
- Evolve as you implement and embrace appropriate digital technologies – analyze your data to see how these innovative technologies have engaged with your target audience.
- Optimize and tweak your digital transformation plan and analyze where it is going well, as well as what areas could be improved.
- Engage with your customer base and active industry stakeholders – gain feedback on the new digital technologies implemented.
How can key Business Stakeholders Work Together To Enable Digital Transformation?
When implementing a digital transformation strategy within your organization, it is imperative that the benefits of this change and the fact it is on its way is communicated to key business stakeholders. This will help to ensure they appreciate that not only is it happening, but also why it is happening and how it will potentially affect them going forward.
With any change, but especially when implementing a digital transformation strategy, communication is extremely important. It will allow everyone involved to feel confident that they have the support of the organization when delivering a digital transformation strategy and allow them to feel they are part of a wider team who are all responsible for delivering the same goals.
Regular and consistent communications and key messages should be delivered, and if all staff are included this will encourage them to support the new digital transformation initiative. If they understand what is happening and why, they are more likely to support digital change. Some may have worries or concerns about how digital transformation and changes will affect them, and if feedback is welcomed and encouraged it may help your organization make the digital transformation process easier.
Case Study: Digital Transformation in the Banking Industry
An example of an industry that faced urgent digital transformational change is the banking industry. Banks increasingly collaborated with financial technology (FinTech) companies to deliver their digital transformation strategies with enormous success, as they often have strong customer experience skills and deep customer understanding. A digital transformation framework that has been particularly successful has been in regional and community banks. They often focus on mobile banking and leveraging tools such as digital payments, chatbots and mobile technologies to drive digital transformation forward. This model has been highly successful and could provide the blueprint for digital transformation in larger banks moving forward.
Data and analytics drives digital transformation in several ways, and the phrase “data is the new oil” has often been heard when describing how important it is to an organization. Every day organizations are inundated with a ton of data, but that data must be looked at thoroughly and refined into useful business insights for it to have any real value.
Data and digital transformation often goes hand in hand, as organizations need to combine their structured data with unstructured data to gain new insights that were not available to them previously. Structured data is all that fits into traditional databases and spreadsheets, such as your profit and loss account, customer list, information about your products and business processes, and your unstructured data is everything that is too big to fit into a database, such as Google Trends data public APIs and feeds from the internet of things. When these are layered together and analyzed you can find lots of new ways to sell to and interact with your customers.
To Book to Attend CAO Spring and to Find out More
During our Digital Transformation Day on May 14 2018 you will be able to learn more about digital transformation, what it is and what your organization needs to do to be digital transformation friendly. To find out more and to book please visit https://coriniumintelligence.com/chiefanalyticsofficerspring/day/digital-transformation/, and to find out more and book onto CAO Spring on May 14 to May 16, please visit https://coriniumintelligence.com/chiefanalyticsofficerspring/.