June 10, 2020
Digital transformation can be defined as the adoption of digital technology into all areas of an enterprise business, fundamentally changing its operations, how its employees work as well as how it delivers value to its customers, partners and stakeholders.
However, digital transformation is not just about adopting new technology, it also entails significantly changing how an organization thinks. It requires organizations to change leadership, think differently, experiment with new business models, find new revenue streams, and get comfortable with change.
These sweeping changes that digital transformation call for are driven by three key factors that are closely related and work together: innovative technology, customer behavior and external factors.
Technological innovations lead to disruption because they deliver better results with more speed, less effort and at a lower cost. This technological disruption influences customer behavior as consumers start to develop new tastes, demands and expectations of the business. This change in the market soon leads to new external factors such as new regulatory laws and new competitors in the industry.
For example, Uber’s innovative ride-sharing technology disrupted the transportation sector by making the experience of getting and taking a cab much smoother, more enjoyable and more efficient. This reshaped the user experience and consumer expectations of the taxi industry as people developed a taste for on-demand services.
A 2019 study by the International Data Corporation (IDC) predicts that global spending on the technologies and services that enable digital transformation will reach $2.3 trillion in 2023.
“More than a third of organizations (44%) have already started implementing a digital-first approach to business processes, operations and customer engagement,” IDG revealed in their 2018 State of Digital Transformation Report.
Furthermore, the report revealed that 19% are in the integration process of making operational and technology changes throughout the enterprise, and 18% are executing their digital plans and making process, operational and technology changes on a department and business unit level.
Millions of people all over the world have retreated to the safety of their homes. We have turned to the Internet for everything from news to entertainment to education to remote working. In the new reality of the COVID-19 pandemic, digital transformation has gone from important to absolutely critical.
Before this crisis, organizations could afford to take their time with digital transformation despite fully understanding its importance.
And they could get away with this slow and steady approach too. Small efforts in adopting new tech were enough to keep a company on pace with the curve or even slightly ahead in certain places, with minimal internal disruption. Difficult decisions could be postponed until they became absolutely critical.
However, the COVID pandemic has completely destroyed this luxury of choice. Companies all over the world are now having to make very critical decisions with no room whatsoever to shelve them for later.
Furthermore, it’s worth noting that the habits both customers and employees are forming during this period will define how companies do business in this new decade and even further into the future.
Beyond managing to stay afloat in the midst of the COVID-19 crisis we’re facing (and we still don’t even know when it will end), digital transformation allows organizations to enjoy the following benefits:
At its core, digital transformation is about making processes and workflows faster, easier, and more efficient. For example, digitizing paperwork management such that documents are automatically moved to where they need to be frees up employees to focus on other, more revenue-generating activities.
Digital transformation enables companies to eliminate more points of friction in the customer journey. For example, digitizing the onboarding process such that new customers can go over all the benefits of your service without the need of a customer support representative creates a smoother user experience that produces more convertible leads.
With the higher employee efficiency and better customer experience mentioned above, digital transformation inevitably leads to improvements on the bottom line. In a recent Gartner research, 56% of CEOs surveyed said that digital improvements have already led to increases in revenue.
Businesses today can access greater volumes of data than ever before. With the right analytics tools, businesses can crunch this data into valuable, real-time business insights that can be used to make more informed, quicker decisions about their strategies.
Digital transformation pushes businesses to stay on their toes. The rapid evolution of digital innovation leaves companies no time to rest on their laurels. Even those in the lead must stay adaptive and keep improving their business innovation to stay ahead. There are always new industry competitors, new tech tools, and new innovation trends popping up on the horizon.
Digital transformation doesn’t need to be scary. It doesn’t have to be this grand project that has to bring everything in the organisation to a standstill for it to succeed.
Despite what the old-school digital transformation consultants have to say, the truth is that modern day digital transformation doesn’t require the approval and stewardship of the CEO, a radical change in the company culture, let alone full scale adoption by the whole company at the same time through a bunch of workshops and meetings.
In a lot of cases, digital transformation starts in departments that have autonomy. The ones that have enough independence to figure out the best paths to their goals for themselves. From there, it grows organically throughout the company. It doesn't need the CEO to gather everyone together and declare, "Let's do digital transformation!"
All that’s necessary for digital transformation to occur is for a department or team to decide, "Let's be better and faster at what we do." A sufficiently autonomous team or department can even simply hire an external agency to create tailored digital solutions for them and these can go on to be adopted by the whole company with time.
What you need to start digital transformation is a first step. Any employee in an enterprise business that has a budget and wants to be more efficient at their job can start digital transformation by creating a new digital tool that eases and improves their work.
All it takes is one employee with a keen perception of their work process and the boldness to try something new to show the rest of the company the way. And as the positive effects of their innovation spread out all across the entire organization, that employee’s career naturally progresses to the next level too.
Ultimately, there are three core steps to modern digital transformation:
It’s also worth highlighting that in choosing a consultancy agency to work with in digital transformation, it’s important to consider how agile that company is in itself. The last thing you want is to work with a team that is yet to figure out their own digital transformation on the inside but are confidently selling it as a product to outsiders.
We at Bons have wide experience working with both startups and enterprises alike in digital transformation and are experts in both low-code and fully-coded solutions. We know how to build beautiful, dynamic digital products with or without code. But don’t take our word for it and take a look at Produck.io: the project management tool we’ve built tailored to our agency needs and now many other teams are using it themselves.