The large-scale and lasting impacts of a digital transformation will influence your company for decades to come. Going digital is not merely about adopting present practices - it is a step into the future, aligning your business model and company's methods with the format that is solidifying itself as the new standard.
As with any new integration, digitalization presents its fair share of challenges. Being aware and educated on the most common obstacles businesses face can help with preliminary strategies and prevention planning. Oftentimes, simply understanding the most frequent mistakes that arise during a transformation can be sufficient enough to avoid them in your own strategy.
Let's explore the five pillars of a successful digital transformation that you can rely on to help your business retain its success, expand its offerings, and achieve sustainability as you integrate new changes.
The goals of digitalization vary among industries. For example, an oil and gas company will not have the same objectives as an insurance provider.
You must determine what your purpose is with digital technologies. Adopting them without understanding their abilities for the sake of appearing modern is futile; without the knowledge and drive backing up their integration, they're likely to become disruptive, costly expenses rather than profitable investments. You want to maximize your transformation benefits as much as possible while minimizing any potential disruptions or losses. This means thoroughly exploring all of your options, researching the most useful digital technologies in your industry, and developing new initiatives rooted in them.
As overwhelming as the possibilities may seem, all of them can be assigned to one of the four types of digital transformation:
This type of transformation is ultimately about unification; it is the ongoing process of aligning short-term initiatives with existing values and objectives to help a company evolve in the face of a hyper-connected, increasingly remote society.
Will your transformation be primarily cultural, organizational, or a combination of both? Are consumers expected to be impacted as much as employees? Will there be any knowledge gaps to account for during the transformation that could disrupt business?
Digital technologies, software, and business models must all run parallel to one another, but they cannot be randomly implemented into an existing operation. Instead, it's best to establish a bottom-up or top-down process of integration that will allow your business to adjust to the changes digital technologies bring without impacting the quality of service or productivity.
The threat of digital disruption is often what delays transformation in companies. The negative side effects of this tendency are numerous, but the most prominent are a resulting lack of education and further difficulty transforming in the future.
A survey by Harvard Business Review found that 80 percent of leaders expected digital disruptions, and 84 percent of all business was estimated to be impacted by digitalization in 2020.
The longer a business avoids adopting digital technology, the farther they fall behind their competition. Even a single integration can cause a company to shoot lightyears ahead of another. Hierarchies allow you to gradually implement new technologies that build upon and complement one another.
Consider which types of digital technologies have the greatest risk of disruption; begin training and systems integration for these as you introduce low-risk systems that will eventually rely upon the larger changes. This will not only allow you to sustain tangible digital growth, but it will also help you identify any risk factors and respond to them before they have a serious impact on business.
Customers are often the people who experience digital technologies the most. Their experience with your company should only be enhanced by the changes you make. Automation of tedious procedures on your workers' end can result in faster service for consumers; AI chatbots can help customers find targeted answers to their questions without spending time navigating your site. It also makes assistance available 24/7, which is something many people have come to expect in the digital age.
The customer/company relationship is also subject to the effects of transformation. In the same Harvard Business Review survey mentioned earlier, 72 percent of respondents reported that they wanted their digital efforts to strengthen their relationship with their consumers.
Improving the way people interact with your business will ultimately shape your reputation going forward; the adoption of digital technologies demonstrates to your customers that you value their time and want to bring them the best service possible. It's not just about making your job easier; it's about making their lives simpler.
Transformation through digital technology isn't just a one-time occurrence. While it may be easy to stagnate with a traditional way of doing things, digitalization begets innovation and adaptability. A flexible mindset and willingness to evolve across domains will ultimately make the difference between success and failure.
Most digital changes to a business are multi-faceted. There are different degrees of integration and a ripple effect that must be forecasted and accounted for. Consider the impact of digital technology in the insurance sector. Customer experience will be one of the primary focuses of new digital applications, but that singular factor has multiple sub-divisions.
Questions like these will enable executives to make the right choices for their business and avoid a tunnel-vision approach toward transformation.
A holistic business organization unifies a company across every level, from shareholders to interns. No one is left out of the loop when you adopt a holistic mindset, and this level of thoughtfulness can prevent any disruptions or major losses stemming from misunderstanding, confusion, or general oversight.
Leadership is necessary to define and deploy a company's transformational journey, but most executives do not have the technological knowledge to make the best decisions for their company's technological future. As such, it is best to consult with professionals across different digital domains who can provide valuable insight and recommendations on both the immediate benefits and long-term outcomes of a particular technology.
The CEO should absolutely be involved in every step of the way, as they are able to forecast their company's success the best. However, they should not act entirely on their own judgment. The final call may come down to them as they consider the entire business ecosystem, but working with experts such as AI developers, software engineers, and data architects.
On a more generalized level, it's vital that an entire organization understands that digital changes are designed to enhance, not replace, human connection. If employees feel that they are being phased out in favor of a robot, the transformation is likely to fail. People need to understand that the integration of digital tools in the workplace impacts their lives just as much as it does customers'. These changes should always be presented as beneficial.
There will undoubtedly be an initial learning curve, but the right training modules can help people understand the role of new technologies impacting their careers. There is also a chance for executives to provide additional value to employees in the form of skills training, which contributes to professional development and helps alleviate feelings of anxiety and unpreparedness.
By following the five pillars above, your organization can more effectively implement new digital solutions and technologies. I recommend that you start by: