What is Digital Transformation?
Digital transformation is the collective term used to describe the adoption of digital technologies to improve existing efficiencies and outputs of current workflows, production processes, and communications in any organisation. This is often by replacing legacy non-digital methods with new automated or semi-automated digital solutions to streamline work. Digital transformation is thus re-imagining the business model to use the strengths of the digital medium or using digital technologies to create new business opportunities around existing competencies.
A Digital Transformation project could be both the forms- software solution and hardware solution. For example, the adoption of cloud computing to reduce a company’s owned physical IT infrastructure or to use new POS software in a retail store to streamline customer checkouts and improve customer relationship management post-sales are examples of digital transformation.
Digital transformation may be taken up for either a service or a product lead company. It can affect every level of business and interaction. There is no single standard digital transformation solution as it depends on how existing digital adoption levels and how a company does business.
How Does Digital Transformation Add Value?
Digital transformation aims to take a radical look at how a business delivers value to its customers and to define how the adoption of digital technologies can add more value to this. This value varies depending on the business operating model. It can translate into various parameters, including faster turnaround times to deliver a service or product to a customer, increase in sales, increase in customer retention, reduced resources used, and an increase in profitability. It could also mean providing company management with the right kind of data that matters so that they make better critical business decisions. Digital Transformation can provide an added impetus in delivering efficiencies to back-office operations for a product or service. Or even create new products and service offerings that reinvent the company’s core business. Digital transformation can help deliver product customisations and deliver unique and meaningful customer experiences.
What Businesses Benefit from Digital Transformation?
Digital Transformation can add value to any type or scale of business. Whether it is your corner café, shop, local hospital or bank, Digital Transformation has the potential to revolutionise any kind of business. Cafes through Digital Transformation can now offer online loyalty programs to repeat customers, encouraging them to spend more time and to push relevant merchandise. Shops can sell online and can now manage their inventory in a much more agile manner that matches demand. Ensuring shelves are stocked on time and that there is no unnecessary stockpiling of inventory. Hospitals can keep exhaustive holistic records of patients’ health over time and promptly share past ailments with consulting doctors and testing laboratories. Through digital transformation, banks can provide 24/7 banking services that are accessible online or through ATMs and free up their staff to focus on building new businesses.
Who is it Led By?
For digital transformation to be successful, it needs to be implemented from a top-down approach. This means everyone from the CEO, CIO, and other business leaders need to be actively involved in a digital transformation business. Digital transformation projects affect every aspect of the business. Therefore it is critical to ensure that all stakeholders have a say and buy-in to adopt these new technologies. Those people who directly interact with customers or straddle the gap between front-office and back-office operations need to understand the goal and processes of any Digital Transformation drive.
How is it Different from Digitisation?
Digitisation is converting physical analogue artifacts such as existing documents into digital versions quicker to index, search, and access. A digitisation exercise for a company is only one small element of a more massive digital transformation exercise that is undertaken.
How Can We Implement a Digital Transformation Project Successfully?
Just like no two businesses are identical, every digital transformation project is unique. A key component to succeeding in any digital transformation project is not the technology that is adopted but creating an organisational culture that is quick to adapt and change to new business ways. This is achieved through a clear plan that describes changes and impacts for each stakeholder and how standard operating procedures may evolve. Digital technology changes continuously, and people within an organisation must have the skills, aptitude, and attitude required to re-learn and adapt to new techniques.