What is Digital Transformation?
The term digital transformation often gets associated with buzzwords like AI, blockchain, cloud, and automation. But what is it? Do you need it? And if so, what will be the benefits of implementing it in your organization.
Digital transformation means something different for every organization. That’s why it’s a challenging task to provide a clear definition.
Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It’s also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.
from this definition, you can clearly see that having a website and a social media presence is not enough anymore.
There is just one thing we would like to stress. Digital transformation is a long and challenging journey. Arriving at the state from the above definition may take some time and effort.
Why Companies Need Digital Transformation?
In 2020 in the US, eCommerce grew by a stunning 44% and represented 21.3% of total retail sales for that year. You may say that year was special but look at the prognosis for the eCommerce market below. This trend is not going to stop.
The transition of retail companies to the digital world is one of the best examples of what business benefits digital transformation can bring.
And eCommerce is just the tip of an iceberg of digital transformation that’s taking place as we speak. Can you imagine a bank without online access to its services? The hotel that doesn’t allow for online bookings? Whether we like it or not, the digital world is already here. Soon, the businesses that don’t go along will be niches for enthusiasts. (Do you remember when you last used the paper map?)
What are the Benefits of Digital Transformation?
Digital Transformation is all about redefining processes and finding better ways to do business. The most straightforward gain from going down this path is saving resources and time.
What are Digital Transformation Services?
We already discussed what Digital Transformation is, but what are Digital Transformation Services? There’s going to be no surprise. They are all the services you can buy that help you take your business in the digital direction. From collecting data about business processes to implementing chosen technology – external transformation experts can be of help.
There are three main types of Digital Transformation services:
- Digital transformation consulting
- Digital transformation strategy
- Digital transformation implementation
Let’s discuss all of them in more detail.
Digital Transformation Consulting
While it might be a bit counter-intuitive to trust external experts with decisions about your organization, a fresh look at business processes can uncover hidden potential and help see new possibilities. Transformation consultants come equipped with knowledge about the industry, typical customer journey, and market dynamics.
When they combine their domain expertise with insights they gain from the leaders and the team, they can come up with an effective transformation strategy with measurable business outcomes.
However, consulting services don’t have to end there. Some providers offer comprehensive digital transformation solutions and take care of every part of the process.
Digital Transformation Strategy and Framework
Drafting a digital transformation strategy is the first step towards the real revolution. Such a document considers business processes and aligns them with technology, business needs, and customer expectations. It examines the technology landscape to look for solutions that are best suited for the company’s expectations and budget.
When working on digital transformation strategy, experts analyze three dimensions:
- Current technological status
- Business requirements
- Internal IT experts’ capability
Let’s take a closer look at each of them.
Current Technological Status
Transformation consultants take a look at all the technology that is used at the moment. They examine existing solutions paying attention to their use and effectiveness. They take into account what software is used by your clients and cooperators. Compatibility is vital.
When they know everything about the current IT solutions implemented in your company, they are ready for the next step.
SCS Tech can help you strategize your company current technological status.
Collecting Business Requirements
Organizations have different expectations regarding their digital transformation. It’s the consultants’ job to introduce innovation without disrupting daily operations.
Once they gather data about technology in use and insights about the expected outcome, it’s time for them to draft the plan. Transformation services should align with the client’s needs and capabilities. A bespoke custom-built system is going to provide a better experience than even the best out-of-the-box solution.
However, sometimes both approaches can be combined to provide the best experience at a competitive price.
Maintaining Innovation
There is one more thing that should be kept in mind during the digital transformation. Once all the new systems are built, they’ll need to be maintained. Is the organization ready for this? Does it have enough capacity, or will additional people be required?
Thinking about HR issues when preparing the transformation roadmap can spare you unpleasant surprises at the implementation phase.
Digital Transformation Implementation
Digital transformation implementation is when the strategy comes to life. Digital transformation services that stay on paper don’t bring results. Sure, planning is essential, but only moving past the brainstorming phase can enhance clients and team experience.
It’s important to remember that the development phase can falsify some assumptions made at the planning phase. IT leaders must rely on their experience to suggest the best solutions, even if it means deviating from the original strategy. After all, digital transformation is all about flexibility and experiments.
What is the Best Place to Start the Digital Transformation in Your Company?
Up to this place, this article mainly covered the theory of digital transformation solutions. From now on, we’re going to give you more practical advice.
No two organizations are the same. Businesses differ, and so differ their needs. Hence the generic advice on where to start your digital transformation journey would be useless.
However, we are sure that it’s worth hiring an external expert who will help with the preparation. His insight into a business landscape, the services you provide, operating models, your products, and the technology you use is priceless.
Experts gather data, talk to people, and assess your business strategy. Coming from outside the industry, they can identify problems you weren’t aware of. At the same time, they may also suggest simple improvements for things that “have always been done this way.”
Even if you decide your transformation is going to be done by the internal IT leaders, DT consulting should vastly enhance the overall experience.
Identify Pain Points
Another universal piece of advice for starting a digital transformation is:
identify your organization’s pain points and aim to improve them.
Depending on the type of your business, this might mean applying different solutions. Your sales team might welcome a new CRM. Maybe your website needs some extra care regarding UX? Or do the documents need to be printed and scanned repeatedly? Think of experiences you want to enhance.
Typical digital transformation starts from cloud services and data integration. Those two basic steps open the gate for future digital services development.
Practical Aspects of DT
Companies starting the digital transformation journey need to take into consideration:
- People
- Budget
- Expected results.
This paragraph is going to answer the most common questions regarding the practical aspects of DT.
How to Prepare your Organization for Digital Transformation?
People
Successful digital transformation starts from talking to people. No matter if you decide to collect data and do the talking yourself or hire an external expert. You need insights from the team. And you need your team to be cognizant of a change.
Budget
Budget is not a sexy thing to mention, but you need to know upfront how much you can spend. Plan your solutions accordingly. It’s better to have one small implementation than a lot of big plans.
What to Expect During DT?
The best way is to take the Agile approach and expect the unexpected. As they say, things have to get worse before they get better. Introducing new solutions tends to be painful. That’s why it’s so crucial to preparing organizations for a change before it starts. It gives you a chance to reduce pushback from the team, which is only natural when you disrupt the usual way.
How to Measure the Outcome?
This is how we arrived at the expected results section. As with any business process transformation, you have to find out KPIs to be monitored.
Here is our list of suggestions:
- the number of licenses in use vs. licenses bought
- hours saved
- revenue from new digital services
- customer experience
As with everything regarding digital transformation, the metrics should mirror the organization’s structure and needs.
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