Digital transformation is not new to the business world. It has helped organizations stay at the forefront of innovation and deliver significant value to customers.
The global pandemic has taken digital transformation agendas to the next level. More businesses are willing to digitize their operations for enhanced productivity and customer satisfaction. But what is digital transformation? And how will it affect your business? Let’s understand first.
What is Digital Transformation and Why is it Important?
Digital transformation is the integration of advanced technologies to change the ways of working and business operating models. It fosters innovation, collaboration, and growth across all business areas while streamlining processes, optimizing operations, and transforming business at a fundamental level.
Transforming your business digitally goes beyond starting a website or having a social media presence. It is a cultural change that encourages organizations to challenge their status quo and walk away from traditional business processes.
Indeed, there’s hardly any industry or sector that has remained untouched by the wrath of the COVID-19 outbreak. Digital transformation provides your business with continuity, clarity, flexibility, knowledge transfer, and the ability to respond to demand at scale.
Independent research states that significant investments in digital transformation are about to reach a whopping $7 trillion by 2023 with a CAGR of 18%. This means that most businesses either have a digital transformation strategy in place or are working on one.
While each company and its digital transformation is unique, here are some noteworthy examples of digital transformation to give you a better idea.
- Porsche’s digital capabilities to understand its customers. Its own CRM system documents each customer interaction at every touchpoint. The data enables predictive intelligence and real-time segmentation, allowing them to maximize their campaigns’ success.
- IKEA digitally transformed everything – from back-office IT systems and supply chain operations to customer experience. With the help of technologies like AR/VR, the famous retail brand has launched a smart home project to showcase affordable home furnishing solutions. This helps customers in making purchase decisions.
- DHL has positioned an advanced quality control center (AQCC) that exploits technologies like AI/ML and successfully interprets big data to prioritize predictive regulation on flight/shipment movements, user queries, planned deliveries, and so on.
Adopting disrupting technologies like Cloud, AI/ML, IoT, Big data, AR/VR, Metaverse, etc., helps businesses identify and deliver measurable outcomes. With digital transformation, companies can disrupt existing operating models, deliver more value to customers, partners, and stakeholders, build resilience and achieve a competitive edge. The benefits of digital transformation go beyond the ones we have already discussed.
What are the Benefits of Digital Transformation?
Digital business transformation has become more than necessary to stand out and create a niche in your respective sector. Let’s look at some of the major benefits it has to offer.
Seamless Customer Experience
Implementing digital capabilities allows you to understand the degree of customer satisfaction. Higher the customer satisfaction levels, the easier it will be to retain customers and increase loyalty. Robust tools help track customer behavior and preferences and help you deliver remarkable customer service.
The use of advanced technologies provides well-structured customer data, which helps you make smart business decisions, thereby increasing your chances of achieving your goals in the long run. Ideally, digital transformation paves a pathway to business success with data-driven decisions.
Every organization craves efficiency and this is one of the biggest digital transformation benefits. Companies are shifting away from traditional procedures and human interventions. When modernized digital versions replace manual operations, the process flow becomes faster and smoother, making the organization more efficient.
Better Market Penetration
Penetrating unexplored markets is critical to add new customers to existing business norms. When you release and market new products or services, performing segmentation to assess the target market’s quality is crucial. In-depth insights, along with improved decision-making, make market penetration more effective.
Digital transformation helps you increase profits by improving customer satisfaction and acquiring new customers. Besides, higher profits would be a motivation for your employees to work harder. When profits are enhanced, you can focus more on improving efficiency and customer service.
Realizing the potential and benefits, various businesses from different industries are embracing digital transformation and making progress in modernizing their systems.
How are Different Industries Approaching Digital Transformation?
Industries are getting unparalleled opportunities for innovation and value creation. They are adopting a dedicated digital transformation model to achieve desired business objectives and expand their reach. Here are a few industries and how they are embracing digital business transformation.
The industry is rolling out enhanced car buying experiences with virtual reality capabilities. Self-driving and autonomous driving cars are taking center stage via connected technologies. Many automotive companies are using Metaverse technologies and creating virtual factories to design virtual prototypes for vehicles and vehicle simulation and testing in order to improve the vehicle manufacturing process and make the process faster.
Many chemical manufacturers and CEOs are focusing on creating a digital transformation strategy to reduce costs, protect cash flow, review portfolios, and continuously innovate. Large chemical plants are investing in the Industrial Internet of Things (IIoT) to build an agile demand-supply network, while specialty plants are focusing on automating core processes, remote monitoring, production optimization, and equipment efficiency.
The electronics sector stands among the leaders of digital transformation in manufacturing, focusing on connectivity and virtual process integration. The scope for home-based electronic repair businesses is continuously growing. Companies are taking full advantage of intelligent multi-domain design patterns, virtual prototype-driven verification, testing, model-based systems engineering, etc.
The IT industry is leveraging digital transformation as a service to improve agility and respond to ever-changing user expectations. Companies have started focusing on building remote teams via leveraging team augmentation services offered by technology partners. Business owners are exploring diverse opportunities by embracing Robotic process automation, artificial intelligence, DevOps, Cloud, and more within their existing processes.
Healthcare digital transformation is nothing but introducing telemedicine solutions, remote patient monitoring systems, EHRs, hybrid care delivery models, personalization of medicines & digital therapeutics (DTx), and more. It is playing a significant role in monitoring patients virtually, alongside lowering the overhead costs for small clinics, multi-specialty hospitals, pathology labs, and other medical practitioners. Digital transformation in healthcare is a way toward enabling access to quality care services and proactive medical treatment.
Digital transformation has become a central part of the transportation and mobility sector. Startups and even corporate giants are reconsidering their mobility approaches by investing in connected technologies to provide on-demand ride services via taxi apps and optimize transportation-related operations. They are focusing on delivering positive mobility experiences by building intelligent transportation systems and improving traffic management.
Digital transformation in the sports industryis redefining both the sporting experience for people and the way businesses operate. Sports and sports event management companies now have the privilege to sell their merchandise faster with a fully integrated digital platform. Data-driven sports training and learning management platforms are helping teams to improve their performance. In addition, event transportation automation solutions are becoming easy to automate sports operations and provide a seamless commute experience to all attendees and players.
When it comes to digital transformation in retail, retailers are prioritizing every aspect of their business. Be it customer engagement, shopping experience, customer management, social media marketing, employee training, inventory management, order fulfillment, delivery, or omni channel presence. They are taking full advantage of technologies like Big data analytics, retail and eCommerce apps, and location-based services to deliver alluring customer experiences, reduce costs and streamline processes.
Although only about 30% of companies can implement digital transformation successfully and reap its rewards. They face several challenges when undergoing a digital transformation. Let’s see those challenges in detail.
Challenges that Businesses Face While Implementing Digital Transformation
Companies adopting digital transformation are likely to enjoy more efficiency and better customer satisfaction. However, there are some challenges you might face while doing so. Here are a few of them to help you out.
Adapting to Change
Things might start to seem intimidating when there’s a change in routines and the way of doing daily tasks. Digital transformation can be the epitome of change, uncertainty, and discomfort, and many employees might resist the change.
Digital Skill Gap
Going through your digital transformation requires a combination of talent and technology. That’s why companies struggle to digitize their operations. A digital transformation process brings a myriad of technical challenges. So, getting the right people on board and training your workforce to develop the required skills is critical.
How amazing would it be to have an endless pool of financial resources? Sadly, it’s never the case. You are likely to face financial constraints that might impede your digital business transformation journey as it requires substantial investments in your company, customers, and people.
Most companies hold on to their legacy systems despite the availability of better and more intelligent platforms across the market. What’s more challenging is moving out of a siloed framework and making the best out of the capital investment. With outdated technologies and obsolete environments in place, businesses become vulnerable and prone to discrepancies.
Rushing towards digital transformation can never be a good idea as it can make your products and services vulnerable to data malfunctions, cybersecurity risks, and other breaches. And this is what most companies go through and end up making financial losses, especially while partnering with third-party vendors or exterior platforms.
Absence of a Proper Roadmap
Unable to create a corporate-wide strategy is one of the biggest digital transformation challenges. Not having a strategy means your transformation process will lack vision, goals, and purpose. And without a plan and purpose, you won’t be able to bring the best out of your digital transformation.
Transforming your business processes, systems, operating models, and other use cases takes time. To flip the odds of success in your digital transformation journey, you need a way to organize each step, strategy, time estimate, and resources. That’s possible with a proven digital transformation roadmap.
Once you have a reliable roadmap in place, you can create a transparent consensus to go ahead further and achieve set outcomes while breaking the team silos. Let’s see how you can start with an ideal road-mapping process and create a high-level view of your digital transformation journey.
How to Create a Robust Digital Transformation Roadmap
Here’s a step-by-step road-mapping process in order to help you achieve your goals of embracing digital transformation at scale.
Step 1 Define Your Vision, Mission, and Key Objectives
The first step to consider before starting your digital transformation journey is to analyze the existing state of your organization, mission, vision, key values, processes, and people. After a detailed analysis, you need to plot the course of action with a well-defined vision, values, and end goals.
Step 2 Onboard the Right People
The next step is to change the company’s point of view. A successful digital transformation cannot take place if you lack the required talent. Therefore, you need to hire the right people and map out every area of improvement. You should identify and hire digital transformation consultants who are competent enough to understand your business objectives in particular.
Step 3 Set Key Performance Indicators (KPIs)
You need to set a series of qualitative and quantitative metrics along with important KPIs to enable real-time visualization of tasks, gauge progress, and improve productivity. Make sure these metrics and performance indicators are based on specific, measurable, achievable, realistic, and time-based (SMART) criteria.
Step 4 Break Down the Process
When your KPIs are set, you need to break down the process into smaller, individual categories. You can incorporate agile practices for the same. This will help you assign resources to each category and give you enough visibility to optimize time and overall capital throughout the staging.
Step 5 Prioritize Accountability
Along with time and capital, you need to give ownership of each category to the key stakeholders of your organization or digital transformation technology partner to establish accountability. Make sure they get all the needed support and assistance to work on core competencies and focus on more pressing areas.
Step 6 Feedback and Analysis
Last but not least, make enough room to gather post-implementation feedback and evaluate the efforts of your stakeholders and team members. Identify the loopholes or shortcomings, if any, and make changes or modify your roadmap by exploring new ideas, practices, and technologies.
Furthermore, a successful transformation roadmap is incomplete without essential components of digital transformation. Let’s go through them one by one.
Key Components Of Digital Transformation
Make sure your digital transformation initiatives are centered around employees, customers, and other stakeholders.
Eliminate pain points for all your stakeholders with dedicated data-driven integration and analysis followed by meaningful interpretations.
Digital transformation requires leadership that represents agility with risk-taking capabilities, forward-thinking, experimentation, and more.
Make your digital business transformation roadmap future-ready by managing cultural change and process optimization beforehand.
Identifying and implementing the best-suited technologies is really important to avoid obsoleteness and stay updated.
Take initial results into account and plan long-term strategies to scale your digital transformation and fulfill new agendas as your business grows.
In a Nutshell,
Digital business transformation has opened doors for increased transparency and opportunities. It simplifies the processes and makes achieving goals easier. Increased efficiency, better collaboration, streamlined operations, and clarity lead to enhanced profits and improved customer satisfaction. So, if you haven’t embraced digital transformation, this is the right time to begin. Go ahead and start planning a digital transformation strategy with the help of our digital transformation experts. Connect with them now.
Nitin Lahoti is the Co-Founder and Director at Mobisoft Infotech. He has 15 years of experience in Design, Business Development and Startups. His expertise is in Product Ideation, UX/UI design, Startup consulting and mentoring. He prefers business readings and loves traveling.