When we explain the term digital transformation, it means different for every company, and it can be difficult to cast an absolute definition. However, in a general context, digital transformation is defined as integrating digital technology into all areas of a business, causing a fundamental change in the operational structure of a business and how they add value to consumers' lives. Apart from that, it's a cultural evolution that bounds businesses to challenge the status quo and try new things. It demands a transition from traditional business models to the relatively updated principles and methodologies that promise efficiency and growth.
Organizations' expenditure on the digital transformation (DX) of businesses model notably increased despite the challenges amid the COVID-19 pandemic, as stated by the 2020 International Data Corporation (IDC) Worldwide Digital Transformation Spending Guide. IDC predicts that worldwide spending on DX technologies and services will surge by 10.4 percent in 2020 to $1.3 trillion. Although it was less than 17.9 percent growth in 2019, it remains one of the notable spendings in a pandemic-driven period, rich with comical reductions in overall technology spending.
A business may opt for digital transformation for multiple reasons; among them, the most primary reason is survival. Survival is one's adaptability to change. In the wake of COVID-19, Consumer behavior has quickly changed in different ways since the rise of the pandemic triggered the crash of automated systems in areas like supply chain management when collided with sudden shifts in demand and supply. A business’s ability to adapt instantaneously to supply-demand shock, volatile market conditions, and rapidly shifting customers' behavior has become a survival need.
Impact Of COVID-19 Pandemic On Digital Transformation
The world has observed the pandemic rapidly mold both the “what” and the “how” of businesses’ DX agendas. For instance, the employees' perception of digital technology has switched from “nice to have” to “the only way they can work,” making DX a solution to modern-day problems.Some primary concerns of CIOs and CEOs related to Digital transformation amid COVID-19 include.
- Improving the reach of customer support via tools like chatbots
- Automation tools to manage crisis and unwanted situations
- Forced elimination of redundant or conflicting processes/systems
Digital transformation is appearing as a monster that feeds on conventional systems or work models. A reason why facilities have developed a healthy relationship with digital technology leaving their traditional working habits behind.
How To Prepare for Digital Transformation
For digital transformation to successfully overrun and transcend the conventional business processes, it is crucial to understand what can go wrong. Below are the five steps to take before starting DX.
For digital transformation to be fruitful, the collaboration among employees and different departments of a facility is vital. In every organization, around 70 to 80 percent of employees do not know what colleagues are doing. For digital transformation projects to succeed, this habit has to be left behind. Invest time to make sure that all involved understand what everyone else is dealing with.
Technology is the heart of any digital transformation project, whether it's a new project management software to use internally or certain digital products developed to attract new customers. In both cases, the reality is crystal clear, and if it is difficult to use, people will hesitate to use it. This is specifically important from an HRM viewpoint. When most of the workforce are digital natives, in-house technology must be intuitive, or this talent will easily be distracted and switch to somewhere else.
Answering The WHY Question
Transparency is one of the most important aspects of digital transformation. Every key stakeholder involved needs to understand the reasons behind such a huge transformation. This is normal human nature, and you cannot convince people to change without explaining why they need to be changed.
This idea is coined in the book Switch by Chip and Dan Heath. The idea explains the most effective way to approach a lengthy project like digital transformation. It is easier to overcome a big problem or a project by slicing it down into smaller phases. Once you have broken it into steps, design the roadmap by allocating the priority of every step.
Methods of Digital Transformation
Once you have destined your objectives and build the foundational basis of your digital transformation strategy, you must evaluate your organization’s capacity to select the suitable method for your digital transformation journey.
In Greek mythology, to rise again, Phoenix must have to burn first. This is how limitations become opportunities. According to Alan Talbot, chief information officer of Air Malta, knowing limitations is an important prerequisite while beginning the project. Air Malta identified the key technical areas where they lack technical and digital supremacy than consulted integration partners, Mule Soft and Ricston. Locally-stationed Ricston physically attended and worked at the Air Malta headquarters throughout the project to fully filter out the organization’s strengths and weaknesses. The reason behind augmenting the internal staff with outside experts is that their presence on board added significance to the project, so the outsourcing could enjoy the exposure of issues and practices an airline is likely to encounter.
Another unique method to explore new technologies is to stimulate your digital strategy or segments in a digital workshop or a lab. This enables businesses to propagate ideas and test theories without disturbing the organization’s daily routine and actual operations. Renowned Car manufacturer Porsche has stationed the Porsche Digital Lab to test AI and the internet of things to enhance both the automated driving experience in their vehicles and the working environment for their staff. Similarly, Japanese electronics company Fujitsu has developed several Digital Transformation Centres worldwide to serve as innovation labs where their curious customers can visit to experience new digital technology.
Another possible way to accomplish your digital transformation objective is to station a dedicated change team within the facility. You can choose to outsource consultants or identify innovators from within the organization. These change workers work together to accelerate the digital transformation drive and visit each team or department to drive progress. Another notable aspect of involving this practice is that these change agents are people who consider this practice as their full-time job rather than someone trying to spare time from their busy schedule.
Many organizations push a load of digital strategy and transformation to senior management, making the CEO the pilot of a transformation project. Expecting such a huge change to be delivered by only one or a few people is a false practice. Success is based on creating an environment free from the traditional mindset. Drivers of this change need to mold the cultural mindset as everyone has a part to play, from the clerk to the upper hierarchy.
A solid digital strategy is something no business can confront the Future without. But keep in mind, the main drivers of digital transformation are technology, people, and process. Digital transformation is not just about pitching technology at the problem as it depends on people and processes as well. Without collaboration and adaptation in the three main drivers of change, one cannot get any fruitful transformation and end up ruining the whole project. The experts believe that digital transformation solely depends on organizations remembering these three key points.
- Always be realistic. Adapt what is achievable at the moment and don’t try to implement it all at once.
- Mindset and approach is the prerequisite of technology.
- Cultural change is mandatory for digital transformation to provide promising results. As it's more about people rather than a standalone technology.
The companies that are embarking on success are gradually moving towards the digital transformation initiatives and accepting that failure is a part of the learning curve, rather than wasting time seeing how digital transformation will work for their competitors. Let us know in the comments section below about your opinions and how you are planning to opt for digital business transformation.