Digital transformation describes the process of converting an organization to digital technology, with the objective of improving the customer’s experience, the organization’s business processes, and innovation. Use of a digital system allows businesses to analyze customer needs and leverage technology to improve the user experience. Digital transformation supports the evolution of a business through the use of new technology and by rethinking the business’ approach to repetitive procedures. Because it is a process of evolution, digital transformation does not come with a clear end point.
Anil Kaul, CEO at Absolutdata, said, “Digital transformation is absolutely critical to business success going forward, and companies understand this. According to a recent Twilio report, the pandemic accelerated digital transformation by about six years as companies were forced to rethink customer outreach, product/service delivery, sales, remote working and much more, virtually overnight.”
Digital technology is being used in many aspects of modern life, especially in the wake of Covid-19. Work, shopping, travel, communications, and entertainment have all been revolutionized by digital technology. Those businesses that have not yet fully embraced digital transformation have limited their potential for profits and efficiency. A total digital transformation provides a variety of benefits:
- eCommerce– Internet sales become available to businesses.
- Improved decision making– Access to modern BI tools allow businesses to gain insights in real-time, without requiring face to face communications.
- Improved agility– Digital transformation promotes adapting to changes as they happen.
- Improved customer satisfaction– Digital tools make the buying process more efficient and user-friendly for customers.
- Improved profitability– Because of the improvements, such as efficient decision-making and improved customer’s satisfaction, profits typically increase.
Evolving industries benefit from a move to digital tools
The pandemic has altered the way people do business. It has promoted online shopping and electronic communications. Businesses have adapted by increasing and improving digital communications, with profits growing for those who have successfully switched to digital technologies.
Anil Kaul stated, “Retail leaders understand that consumer buying patterns have changed in ways that are likely to persist once the virus is under control. Retailers know they’ll need to adapt to stay a step ahead of competitors and increase profits in the months and years to come.”
Most industries have shifted to a digital format in an effort to remain competitive and improve efficiency. From the online shopping experience to the delivery of a purchase, customers have developed certain expectations. If those expectations aren’t met, a business will most likely lose that customer to competitors.The changes in the major industries are significant.
- Manufacturing– Digital transformation offers a variety of benefits to manufacturing companies. It helps to transform operational processes to make work more efficient, safer, and less stressful. The process of digital transformation in manufacturing also promotes access to the internet of things.
- Retail (or eCommerce)- has developed user-friendly formats that make shopping a pleasure. With the introduction of coronavirus, retail digital transformation has moved forward at incredible speeds, supporting online sales for people who prefer to do their shopping from home.
- Transportation– Digital transformation in the transportation industry identifies the most efficient routes. This results in faster, more efficient deliveries.
- Government- Governments of all forms are undergoing digital transformation. It makes the delivery of government services and programs much more efficient, transparent, and cost-effective.
- Banking- In recent years, the banking sector has undergone significant digital transformation. To be successful in these modern times, banks must use digital technologies, offering customers debit cards, electronic banking, and services the customer may need, before the customer even realizes it.
- Insurance- The digital transformation of the insurance industry includes machine learning, predictive analytics, and live chats. Operations become streamlined and claims are processed automatically.
- Utilities- Digital transformation can help utility companies to improve customer service. Using expert systems that are based on artificial intelligence may provide new business insights. These insights can enhance customer satisfaction and suggest potential new products and services. Digital transformation can also be used to improve safety and regulatory systems, helping employees create a safer workplace.
- Health care- Digital transformation within the healthcare system allows patients to get better treatment through the use of virtual reality tools, 5G technology, and wearable medical devices.
Also read: Benefits of Integrating ERP with IoT
Planning for the digital transformation
Going through a digital transformation is not not easy. Without proper planning and preparations, the process can end in disaster. The new system may be a bad fit, through a lack of research, and staff won’t know how to use the new system. Without good planning, the new system may also be unnecessarily expensive.
1. Assess the organization’s goals
Digital transformation should be used to help in achieving the company’s long-range goals. While new technology does help businesses to stay competitive and efficient, it should also be used as a tool for achieving far-reaching strategic goals. If a new system is being implemented, it should support a competitive strategy, while also promoting the organization’s long-range goals.
2. Plan a budget
The organization’s leaders must agree on what the business can afford for the digital transformation. Support costs, and training staff for the new system, must also be included in the budget. A temporary loss of productivity as the system is changed should also be included.
3. Choosing the most advantageous software
Selecting the best software requires research and patience. Having 2 or 3 people doing the research separately often provides a wider range of potential options. Should the same software system be presented by the researchers, that one should be investigated as a strong possibility.
4. Plan staff training
It might be best to avoid a classroom situation for most of the staff. A one-on-one, on-the-job training scenario would be preferable for most staff, and this is easily done through a digital learning management system. A single trainer (or two), educating individuals, and then being available for questions as the staff works, is often an effective way to train staff. There are also online training programs available.
5. Develop a culture of feedback during the digital transformation
Digital transformation requires dramatic changes for both staff and management. As changes are already taking place, this is a good time to alter the workplace culture. Open communication is an important ingredient for successful “change management.” For example, management can improve the training program, based on feedback from the staff.
6. Keep the process open ended
After the implementation, management should remain open to continuing the business’ digital evolution. It should be considered an ongoing process. Many digital technologies are a part of the cloud, with updates sent frequently and automatically. It is important for management to stay open-minded, and updated about technological developments.
The importance of digital transformation
The importance of digital transformation, at this point in time, cannot be emphasized enough. Generally speaking, businesses that are not using digital technology will not survive. The competition will provide for the customer’s technology needs, while selling them products and services.
Anil Kaul urges managers and business owners to embrace digital transformation, writing, “Forward-thinking company leaders see this time as an opportunity to invest in digital transformation now so they can optimize operations going forward. Leaders are looking for ways to implement better revenue growth management practices that leverage data and advanced technology like artificial intelligence (AI) and machine learning so they can get ahead — and stay ahead — in the future.”