What is Digital Transformation?

Transformation is fundamentally about change, and like other areas of business transformation, the digital transformation lies in organizational change.

It’s an implementation of digital technology in a way that transforms human life. Because it’ll look different for every company, it can be hard to pinpoint a definition that applies to all.

It’s a process whereby businesses develop new digital strategies that help to move their operations in a whole new direction.

This Transformation means taking business processes and reinventing them from the group upon a foundation of digital technology.

Digital transformation can be defined as the integration of digital technology into all areas of a company.

It requires fundamental changes to business operations and added value to customers. It’ll require organizations to make a major culture change.

The organization must adapt to being able to stay updated with current technologies, adjust to failures, and be open to experimenting with process and procedures.

Digital transformation will make a rapid and insightful change in business activities, processes, competencies, and models to strategically leverage digital technologies.

It’s the integration of digital technology into all aspects of an organization to deliver increased value to customers. It’s an evolution beyond traditional methods to drive business process and performance.

A digital transformation involves the creation of new business models rather than business process optimization.

Digital transformation doesn’t have a clear beginning and end-point. It’s an ongoing, dynamic process which will change as technology develops.

Transformation can be done throughout the entire organization or in stages. Many organizations choose to only update which is needed to succeed in a digital world.

There are three components of digital transformation:-

# Organizational Objective – The objective of digital business transformation is to improve business performance.

# Digital Foundation – It’s based on a digital foundation. Organizations are continually transforming with the use of one or more digital technologies as a significant influence.

# Organizational Change – It requires organizational change which includes processes, people, and strategy.

Difference between Digitalization & Digital Transformation –

It’s important to understand that the transformation is not about the technology itself rather about implementation and leadership as well.

Digitalization is about modernizing existing processes and systems and applying new technology for optimum results.

Digital Transformation is about completely turning around business operations with new technological innovation. It has shifted from the phase of a strategy to execution in the majority of business.

The Framework of Digital Transformation –

Digital transformation will be widely based on the organization’s specific challenges and demands.

There are a few constants and common themes among existing case studies and published a framework that all business and technology leaders should consider as they go aboard on digital transformation.

These digital transformation elements are often:-

• Customer Experience
• Operational Process
• Business Models

Key Elements of Digital Transformation –

An important element of digital transformation is technology. It’s more about detaching outdated processes and legacy technology than it’s about adopting new technology.

A successful transformation requires a reorientation that goes beyond the implementation of new technology to reach every part of the business.

There are three main pillars that contribute towards successful starting and development of the process are mentioned here:-

# Customer Experience – This element is about the research of customer behavior, personality, and expectations. This transformation can only take place when one is equipped with this information.

The advancement in marketing software and data gathering capabilities allow for better customer insight and greater personalization in digital experiences.

The value will be determined more by the number and quality of customer relationships than the number and size of product or service transactions.

Businesses are pursuing transformation in the following ways:-

• Managing personalized experiences across channels that are easy and perfect for customers to use
• Developing digital products and services for new devices
• Drawing in data at every touch-point and using that to deliver more effective personalization

# Operational Processes – Digital natives are already pointing to a future in which business processes are automated machine-first activities.

Many core company processes, technology, data, and governance and operating structures will need to become end-to-end and centralized.

Organizations can create a special team to start bringing the process of the transformation into action. These teams can be called as digital circles and rapid innovation teams.

Customer experience can think as the main front-end and most visible part of the process. Companies are successfully transforming operations as:-

• Breaking down departmental and data storage for better collaboration on digital projects
• Automating processes through better software capabilities or creation of new tools like implementing automated purchase order systems in order to reduce paperwork and rejected orders
• Making strategic decisions based on data with increasing levels of detail. Leaders will be able to make changes based on real data rather than assumptions.

# Business Models – Start-ups are able to disrupt long-standing brands with the use of innovative business models. They take advantage of new technology without being weighed down by legacy systems.

Examples of new business models are varied, but can generally include:-

• Expanding the scope of current business through digital services
• Evolving with changes in customer behavior due to new technologies.
• Rebuilding services to be digital-first like banks create mobile apps for bill payment, loan application or other services

Where to Start Digital Transformation –

Businesses should look at where they are now and decide what core elements of digital transformation they need to focus.

However no one has a comprehensive roadmap for digital transformation, but few best practices have emerged as:-

# Vision with Investment – Your business success can depend on the reach of your vision and the level of investment commitment.

# Digital Strategy – You should make a strategy that accounts for the full scope of your vision rather than the implementation of individual technologies.

# Leadership – Digital transformation is more effective when led by the top player of the business because it requires in-depth organizational change and coordination.

# Merge Business and IT – It’ll be important for business and IT to merge their work to avoid any confliction in adapting technology because of digital business increase software needs.

You should break down the barriers between business and IT with operational change.

Benefits of Digital Transformation –

The companies and businesses which invested in new people, processes, and technologies to compete in the digital markets will see greater profits and market share.

The benefits of this transformation are varied and will be different for every business.

There are several common benefits to any digital transformation strategy:-

#  Cost Reduction – These streamlining operations processes reduce costs because it takes less time to accomplish the same tasks and provides timely, insightful data for decision-making.

# Customer Experience – The enterprise data systems will support digital touchpoints to enable customers to achieve what they want and how they want.

It’ll create a data-rich, personalized experience which is reliable at every touch point.

# Consolidated Operations – Digital transformation will include agile digital systems which take place of legacy processes and systems for record keeping, decision-making, and production.

Systems can be merged and tasks can be automated when the new digital system is implemented.

# Market Segmentation – The digital systems and data integrations allow companies to view their customer database like never seen before.

They create an incomplete customer profile and attach data from third parties to see a more accurate view.

# Analytics – Once the systems are digitalized, the more data can be captured, structured, and analyze.

The increased volume and variety of data enables companies to create self-feeding decision-making systems to improve experiences and streamline processes.

Advantages of Digital Transformation –

Digital transformation will give strength to any organization if different ways as:

# Competitive Advantages – The continuous delivery mindset and adaptation of collaborative development processes enable faster, higher-quality decision making and delivery at a higher level.

Every organization will acquire digital transformation at some level to remain competitive.

# Financial Advantage – The IT sector companies are higher performing which use data to remove ego and politics from business decisions.

# Strategic Advantage – The right placement at all level in the organization will boost-up confidence in the organization that team members are doing the right work, for the right customers, and for the right reasons.

# Cultural Advantage – The continuous communication within teams will feel a sense of companionship which can help reduce attrition.

# Operational Efficiency – Modern processes and technologies help reduce operational overhead and investment in maintenance. The innovations will support fast change and greenfield development.

# Productivity Improvement – Organizations are leveraging Agile and Lean development models. These models basically decrease administrative tasks, increase delivery speed, and improve time-to-value equations.

Implementation of Digital Transformation –

# Support of Top-level Management – The transformation realization will require time, human capital, and financial resources.

It’ll also involve employees learning to do tasks in new ways which can generate pushback. It’ll touch every department.

It’s essential that the push comes from the top to bottom. The digital transformation will require a commitment to priority from everyone in the company.

# Identify Strategic Change Areas – There are certain areas in a company that will get the most benefit from digital transformation.

Once you have identified strategic areas for improvement, you can look for specific ways for digital transformation contribution.

# Allocate Sufficient Funding – The changes in every project will require some budget. The funding will be required whether it’s for replacing legacy systems, making strategic hires, or partnership with other companies.

It’s critical to determine how much the digital transformation process will cost and set aside the appropriate resources.

The cost of ignorance will be greater than a realistic cost. The benefits will compensate for the costs in the long run.

# Start with Low-risk Projects – You can start the transformation with relatively simple and low-risk projects after identifying strategic change areas.

Small progress on big goals creates a sense of energy and helps people to see the overall potential. The small projects exposure can give you a limited sense that what can be involved in the projects as a whole.

# Change Your Operating Model – The digital transformation will require to implement a new operating model.

All the departments and functions will need to be reorganized to enable communication and collaboration. The data of any single business unit must be shared with all the company.

Digital Transformation Strategy –

Digital transformation requires a major investment in people, processes, and products. The most vital performance metric is the impact on customer experience which translates into increased retention and revenue.

In the digital world, you should get your organization’s priorities in order before you go on board on a major transformation.

There are a few key principles to hold on before your digital strategy can start:-

# Determine Goals – You determine the scope and objectives of your digital transformation efforts. You may drastically reduce costs using predictive analytics and advanced data solution.

You can expand the presence and customer reach across different digital channels or optimize the whole operations.

The defining your goals will help you predict the results of your efforts and determine further steps of your digital strategy.

# Analyze Market & Competition – Rapid industry changes and unexpected competition moves make it an essential step for your strategy.

An organization needs to take a close look and perform a thorough analysis of the market before making any digital transformation effort.

# Assess Your Current Position – You need to analyze the digital infrastructure, and tools used in a business process.

You should check your digital system against up-to-date technology and future trends with possible integration and upgrade solutions.

This assessment will help you to prioritize the efforts and investment into the transformation. You will be able to find out what update you needed, and what processes can be automated or optimized.   

# Customer Research – You need to examine the target audience, and make sure to keep your efforts and investment with customer requirements and preferences.

You should revise existing preferences, and analyze digital channels that connect your company with customers. You’ll be able to build new digital customer experiences that fit both your goals and your customer’s goals.

# Prepare Talent Strategy – You should revise skills and knowledge in the company and prepare employees to the transformation. You should create a structure where you understand how your job affects team members’ jobs and vice versa.

• Agile & Iterative Process – You should accept that things might go wrong as you go, fix them, and move on.
• Fundamental Change – You need to know what obstacles might stand in between you and where you hope at the end in order to transform your business digitally.

# Expand Your Reach – You should prefer all-around marketing rather than in or outbound marketing to reach so many customers.

No matter which tools or technology you’re using, you need to ask where we can win. When you know the answer to that question, you can create digital content that your customers want to see and deliver it.

# World-class Digital Experiences – One of the biggest deciding factors is where we spend our money is proximity.

If we know our customer’s expectation, we can design accordingly, build a personalized, customized, relevant product that people will want to use.

• Define Experience Strategy – You should look at the competition and talk to your channel and customers. You can use everything from stakeholder inputs for buyer-persona to feature maps to define your strategy. You should create a strategy which is clearly defined for today and flexible as you move forward.
• Actionable Data – You can take a prospect from an unknown user to an account holder by presenting the content.

Conclusion – Digital transformation has been a fast developing process over the past three decades. A successfully adopted strategy replaces the ‘reactive’ approach with a ‘proactive’ approach by making marketing efforts Digital-First. It’s possible with suitable marketing channels to reach out to your customers. Digital transformation is not a standalone process rather an integral part of business strategy.