What Is Digital Transformation?
At Data Clarity, we define digital transformation as: “The business-wide implementation and adoption of technologies and data-driven solutions, designed to improve business processes, deliver better value to customers, and improve organisational results.”
“Digital business transformation is the process of exploiting digital technologies and supporting capabilities to create a robust new digital business model.” – Gartner
“Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation.” – Salesforce
Digital Transformation: Frequently Asked Questions
With the definition of digital transformation established, you may be left with a few key questions including:
- What are the benefits of Digital Transformation?
- Why is Digital Transformation important to my business?
- What are the biggest challenges when achieving Digital Transformation?
The next section of this guide answers these frequently asked questions.
What are the benefits of Digital Transformation?
Digital transformation offers organisations many benefits, including:
- Better, more consistent brand interactions for customers (and employees)
- Innovative solutions that identify opportunities and deliver more value to end users and customers to promote brand loyalty
- More efficient, effective business operations
- Improved ability to survive and compete in future
Digital Transformation enables businesses to utilise data and technology to better serve their customers and internal stakeholders. Importantly, technology should support and optimise existing processes, without disrupting your organisation.
Why is Digital Transformation important to my business?
Digital Transformation is already fundamentally altering the way organisations work, including:
- Business models and operations
- The way people collaborate and communicate
- The way businesses deliver their value proposition to their customers
It is important to highlight the last point. The way customers interact with businesses is changing, as people become more accustomed to the efficiencies and conveniences that technology brings. To keep up with such changes, organisations can leverage technology to evolve and transform to meet demand.
Having the supporting processes and technologies in place means being able to react to change (all the more important today due to COVID) and being ready for the future, which is why it is so important to every business, regardless of industry or size.
What are the biggest challenges when achieving Digital Transformation?
At Data Clarity we provide the expertise and platform for businesses to adopt a data-driven approach. We have encountered a number of challenges that must be overcome for any business that wants to achieve digital transformation.
These challenges can be boiled down to:
- Organisational buy-in and resistance to change
- Proving ROI and demonstrating value beyond being a cost centre
Every organisation that wants to become data-driven and gain the benefits associated with this approach must be aware of these two essential challenges and develop strategies to overcome them.
At Data Clarity, we tackle this by conducting data audits to highlight operational weaknesses and gaps, and to suggest the ways an organisation can improve to meet the challenges involved in digital transformation.
Best Practices for Successful Digital Transformation
Digital transformation – just like with any other organisational transformation – can be difficult without internal expertise, costly, and time-consuming to implement. To maximise outcomes and improve the chances of success, we recommend that businesses should focus on a few best practices and strategies.
Here are some key practices that are essential for success:
- Develop a digital transformation strategy
- Focus on your customers for success
- Integrate your business functions
- Ensure continuous improvement
- Prepare for the future
Develop a digital transformation strategy
As Deloitte notes, a digital transformation strategy is essential to start any successful transformation. A strategy should be fully developed before any changes can be adopted.
If you have internal experts that can help with this, you should gather internal experts with business users to develop a vision and strategy and gain an understanding of how data is currently used in your organisation and where improvements can be made. This process involves heavy collaboration between business leaders, departments, and employees to raise awareness and create buy-in. We write more about how you can develop your own data strategy in more detail here.
This approach can work for many companies, but it is important to note that this approach can take time and considerable effort. As an alternative, you can seek out external experts to assess your current processes and plan a route to success that works with your organisation.
If you would like help getting started with your digital transformation journey, our data experts are on hand to discuss your needs – contact us today.
Focus on your customers for success
As mentioned earlier in this guide, the customer experience is a key determiner of business success.
To enable customer success, organisations should:
- Understand their customers. We refer to this as ‘Know Your Customer’ or gaining a 360-degree view of your customer. Data can help businesses segment their audience and develop detailed customer profiles and personas. That information helps companies create products, services and promotional activities that are more relevant and more valuable for the end user.
- Create personalised experiences that are delivered in real-time. Customers expect brands to cater to their individual needs and preferences. Every interaction with your brand builds the profile of your customer to allow you to better serve their needs and build brand loyalty. These interactions should be contextualised, personalised, and immediately relevant to give customers a better experience.
- Utilise analytics, data, and other information to design consistent, omni-channel experiences. You may have heard of omni-channel, but if not, here is a summary. Today’s user or customer interacts with your brand across multiple channels. User journey maps should therefore be non-linear to better represent the user journey. The key is to always provide a consistent experience of your brand, regardless of where, when or how a customer interacts with your brand.
Customer success translates into better profit margins, more revenue, and better prospects for the business itself. Digital transformation helps organisations better get to know their customers to serve their needs, which in turn leads to customer loyalty and improved profits.
Read this article to discover how retailers like Paul Smith utilise omni-channel to increase sales by an average of 40% with this approach to customer experience.
Integrate your business functions
One of the benefits of digital transformation is the agility it can bring. To properly leverage this:
- Business units should aim to break down department silos, share information, and align objectives
- Departments should align their efforts and aims with the organisation’s overall strategy
For large businesses to innovate and stay agile, organisational functions must stay tightly aligned and any departmental silos should be broken down as much as possible. The more integrated and cohesive departments are, the more they will be able to move and transform quickly when necessary.
Ensure continuous improvement
One feature of the digital economy is continual change. This continual change affects virtually every area of an organisation, including:
- Business processes. Digital transformation also fuels new, innovative business processes, such as agile and lean.
- The workforce. To stay skilled and productive, employees must continually learn new tools, processes, and workflows.
- The workplace. The workplace itself is also shifting – from online collaboration to remote working, new ways of working can add new value to businesses, increase efficiency, and organizational results.
- Technology. Of course, technology itself is constantly changing. This means that businesses must keep up with those technology changes to stay relevant, competitive, and modern.
Digital transformation enables businesses to reinvent the way they conduct business and interact within the digital ecosystem for more efficient outcomes.
Prepare for the future
A business that adapts to the present may be well-prepared for the present. Digital transformations are always long-term organisational transformations and part of a wider cultural shift within the organisation. With this in mind, organisations should be forward-looking and planning ahead.
A digital transformation’s vision and strategy should prepare for competitive marketplace that is:
- Fully digital
- Running on modern, agile business processes
- Innovating with today’s emerging technologies – such as AI and Machine Learning
Effective preparation will involve transformations built around tomorrow’s digital economy, not today’s business environment.
Where to Go from Here?
In this guide, we have covered a few topics to give you an understanding of digital transformation.
If your organization is just dipping its toes in the waters of digital transformation, then here are a few first steps to consider:
- Understand the value and necessity of digital transformation. It is critical to understand the bottom-line business value of digital transformation. How can it benefit your organization? And why is it a necessity for success in the digital age?
- Choose the right partners. The right business partners can make all the difference in the world. Good partners – whether they are consultants or software providers – play a large role in how successful a transformation project is.
- Learn the importance of the topics covered here. Many of the topics covered here – such as the customer experience, agility, and digital adoption – are crucially important for successful transformation. Understand how and why these concepts are pertinent to digital transformation.
- Start the ball rolling in your organisation. It is important to begin a dialogue about digital transformation within your organization. This dialogue should openly discuss every aspect of digital transformation. That discussion should include benefits, costs, obstacles, and many of the other ideas covered here.
Digital transformation can cover a wide variety of technology-based changes.
It is a type of organisational transformation that requires rapid, revolutionary change. Those changes can impact every area of an organisation, from the culture to the tools to the customers themselves.
It should become a catalyst for successful growth, evolution, and success.
If you need more information or you would like to discuss some of your current challenges, our data experts are happy to help. Contact us today for more information.