According to one of the more popular definitions Digital Transformation (DT) is a change related to the use of digital technology in all aspects of society and its behavior. The term Transformation indicates that by using tools that perform their functions in the digital ecosystem, we are able to enter a higher level of innovation and creativity in a given field, and not only strengthen and support traditional methods of task implementation.
When we say Digital Transformation, it is natural at least for now to look at the business dimension of the issue. There is nothing surprising in this, as the concept came out of this area and probably will be strongly associated with them for a long time.
Factors determining Digital Transformation
What, causes us to change and transform analog well known processes to the digital ones?
Depending on the point of view, these can be:
- Competitiveness on the market
- Optimization of the company’s operating costs
- Striving to develop new competences
- Nice and very fashionable wording…
- Increasing volume of information and data collected and processed
- Demographic elements forcing changes in the service delivery model
- Changes in the economic potential of the society and the consumption model
- Behavioral aspects shaped by consumers of services, goods and content
And many others relevant to the specific area of functioning of us as clients as well as entrepreneurs.
Looking through the prism of business, it seems that behavioral issues are the strongest stimulus for digital transformation. The growing expectations of consumers in the context of easier and faster access to products make it necessary to optimize interaction processes and adapt them flexibly to dynamic market changes. The transition from the multi-channel to omni-channel interaction model is the best example. Customer experience related to the start of the process of purchasing a service in one channel, and its smooth continuation and completion in the other is a critical element that easily translates into changes in the business model.
In general, we can assume that digital transformation is aimed at creating an environment for the full use of the possibilities of new technologies today and working on their effective and innovative use in the future.
The transformation strategy itself, as is the case for any project, requires both a phased approach with a clear plan of action, involving stakeholders, as well as defined internal and external constraints. We must also remember that the end goals of the process will continue to change, because the transformation is continuous.
It sounds quite clear. Nevertheless, when approaching planning the concept, we should put a lot of attributes into the area of competence, remembering how quickly technology develops and new trends in its use. While preparing the project in the context of the specifics of our business for now, let us have its potential shape in the future at the back of the head. The vision with which we formed the company will probably change for some time. Will it be due to our new idea, the requirement imposed by the market, or the desire to use interesting solutions is of course very important. The technology that we want to be or will not be accompanied by supporting or blocking activities is even more important.
Competence is therefore a key factor. Their optimal set should allow us to operate in the Cloud model with Big Data, Artificial Intelligence or the Internet of Things. These are big topics, however, mainly involving technology. A customer and everything related to his experience (Customer Experience) is a parallel area. Due to its behavior, the client shapes not only services and products but also the way they are obtained and consumed. Thus, the more collision-free and easy path of the consumer’s interaction on the way to the goal, the more his satisfaction will shape the commercial dimension of the actions taken.
In summary, the integration of technologies and processes is a necessary factor for the effective occurrence of digital transformation.
This is a very general wording, but it reflects the essence of the concept of transformation. When creating a project plan, let’s consider not only what is to be the effect of changes, but also what we should take into account as part of the whole process. By definition, we can reject the idea of implementing a wide range of technologies that will solve the problems of the Organization. It will not succeed. Instead, prepare a list of business processes and try to analyze and analyze them in terms of logic, consistency, complementarity, connections and legitimacy of existence. Only the effect of our audit combined with new technologies will bring tangible benefits.
Before we start to invest our money, resources and the time in a new idea, it would be great to find a sec and try to consider few interesting elements.
- Starting point – determining the real level of significance of the transformation process for business
- Definition of the areas that will be impacted (marketing, sales, customer care, accounting…)
- Determining what is the baseline for transformation project (people, products, processes, technology)
- Prioritizing activities and defining a list of risks along with a mitigation plan
- Model of resource management including smart capability evaluation
- Measurement of project health including critical KPIs set
Speaking of the benefits and changes that cause them, let’s think about how to manage it. Because we change the way we do business, but also the roles of employees, let us remember three key factors.
Think holistically. Minor changes, even dressed up by the Board in a brilliant vision, will bring nothing but frustration. They win bold and bold actions covering key business elements and having a direct impact on both the perception of our brand and the financial result.
Build strong support for the concept. Creating a proper scheme for the information process and valuable content builds a stable and credible picture of the activities undertaken as part of the transformation program. It also allows you to create a culture of cooperation and a natural desire to share knowledge. Real support provided by the Management Board also eliminates the threat of lack of resources as well as potential competition that may occur between individual teams or departments of the company.
Create a ‘sandbox’ for ideas. Because changes are not always comfortable for the entire business environment of our organization, and we also have not quite enough extensive competences in new areas, let’s try to test more daring ideas and concepts in a safe place. The moment they gain confirmation of suitability for our purposes and reliability of operation, we will be able to boldly present it to the world.
As we mentioned earlier, the transformation method will vary depending on the company’s formula, the scope of changes, the period for which the project was planned, and many other factors. Common areas, however, may be areas in which we should pay attention during task planning.
Business processes – their optimization is an indispensable element of digital transformation
Interactions with clients (I mean the whole portfolio of tasks carried out both by sales, marketing, customer service, as well as finance – accounting).
HR area – as the transformation is intended to bring benefits to us in the dimension of savings in the HR sphere, it is worth considering the possibilities related to both the optimization of the structure and the construction of the competence sphere (preparing employees for a new business model)
Organizational culture – as long as we are still not sure how the company’s activities are and in the definable future will be optimal, it is the best time to focus on the issue. The issue is somewhat puzzling, as the vast majority of enterprises have a relatively precisely defined approach to the market, but nevertheless those that are not fully convinced of how to act are by no means a niche. So let us consider whether the approach increasingly observed on the market and hence the ‘customer-centric’ is what will allow us to bring the company to the top as part of the transformation, or maybe the ‘product’ or ‘technology-centric’ will be in our case the Holy Grail.
The business model of the enterprise – since the time when our business started to operate, did not happen by chance changes that affected the market and therefore forced the shaping of a more demanding environment? If so, are we still with our business on an upward wave, or perhaps we have omitted an important element, the lack of which has resulted in our maladjustment to the current conditions.
Business environment – so what each of the details that affect everyday market activities looks like. How we implement legal regulations, how effectively we work with partners and how well we deal with obtaining data and information about the ecosystem in which we operate.
Client – the potential one, the current one and the one lost to the competition. The client’s experience is at the top of our transformational pyramid, and as a result, the success of the project depends on it. When planning a transformation, let us remember that technology itself is not an antidote to business failure. The client can appreciate the efficiency of the tools implemented by us to improve the purchase of the product, to obtain educational materials or simply to contact the company. It can also post on Facebook some unpleasant and even worse substantive comments, if it turned out that by sending us a question through the implemented perfectly profiled UX registration form, or leaving them during conversation with ChatBOT, after a week no he received the answer. Therefore, when transforming business into a digital model, let’s not forget about the employees operating in the area of ’customer facing’, who should be the first to get full knowledge and understand what the change is and what its expected result is. The right employee mindset is critical to the success of transformation.
The list above does not naturally cover all the issues that we should consider as part of the digital transformation process, but at the same time gives rise to the construction of individual summaries for the specific requirements of specific businesses. It is also worth noting that individual areas merge with each other and / or remain in relationships and dependencies. This means that when planning / implementing project activities, we must take into account the scope and model of interaction between them.