What is it, and how to be a part of it.
Digital transformation can be a confusing term to many and that’s because it’s become somewhat indiscernible in its true meaning. Frequently used as a buzzword, most businesses still don’t know exactly what it means only that it can help them.
While digital transformation is mostly associated with commercial business, it is also applicable to organizations and governments. This article will help you navigate the conversation about digital transformation to understand what it means, what it involves, how it can be implemented, and why it’s important.
What Is Digital Transformation?
Digital transformation simply describes the process of leveraging data to improve your business decisions. This can be done in a variety of ways, from enterprise resource planning software to artificial intelligence.
Despite its widespread use in public dialogue referencing business, public understanding of what the term means is not completely clear. So, let’s define our terms. In today’s digital landscape, data and the technology used to leverage it is paramount.
However, the “digital” aspect of digital transformation isn’t necessarily as relevant as the “transformation” part. While making better decisions using organizational data is the best way to improve a business model and achieve better productivity, reduce friction, or improve customer experience.
This also involves challenging the long-established framework that staying with the status quo is favourable to adopting something new and more effective that can transform your business model. It encourages experimentation to constantly try to find new ways technology can make things easier and better for your business.
What Does It Entail?
Digital transformation has changed society and the way we undertake businesses. It’s forced companies to rethink their business models and the way things are done on a fundamental level. Take the COVID-19 pandemic, for example.
It’s forced the revolutionization of entire industries. Access to data leveraging technology has become more important but more than that, it’s changed our understanding of what certain industries can and should do.
From online schooling and telehealth services to businesses deciding to have employees work from home, these are the kind of radical shifts that we’re talking about when we say digital transformation.
While data and technology have enabled us to make these changes it’s the focus on people that brought them to the forefront in terms of adoption. Digital transformation needs to have an organizational focus. We’re not optimizing and becoming more efficient just for the sake of it, it’s to improve customer experience, become more productive/efficient, reduce cost and/or deliver on what there is an organizational demand for.
Digital Transformation In Practice
It takes real talent and cooperation to properly implement digital transformation. It’s dependent on four core aspects: technology, data, process, and creating organizational change.
Technology - Recognizing the potential of a technology is one thing but working out exactly how to utilize that technology to meet the needs of a business and how to integrate it within the current systems that exist is another.
Data - It's crucial for a business to be able to access and interpret meaningful data and use it to determine how to improve customer experience, reduce costs, and operate more efficiently. Customer data can directly inform a business of what their customers demand. It’s then the business’s responsibility to execute and adapt their model to meet these expectations.
Process - Digital transformation necessitates a change or rethinking of processes. Processes may need to be transformed radically to encourage better outcomes or experiences. This can entail disregarding or explicitly dismantling old processes to establish new and improved ones that produce better outcomes.
Again, rejecting the status quo. Rather than keeping with outdated hierarchical processes, it’s important to embrace change with a focus on a better experience be it associate, tenant, citizen or customer.
Creating Organizational Change - The last component of digital transformation is the ability to create organizational change. This requires influence and leadership combined with cooperation, collaboration, emotional intelligence, empathy, and fearlessness. All stakeholders/lines of business have to be involved as a team to advocate and execute the changes.
It has an ability to rally people. The difficulty with organizational change is that it most often fails when too much emphasis is placed on the digital aspect and not enough on the human component.
Employees need help understanding their role in affecting organizational change and how they can enact this change. Leaders should be able to explain to employees why change is needed, what the changes are, everyone’s role in the change and how the change is to be implemented.
Combining the Four Pillars of Digital Transformation
Finally, it’s not enough for your company to possess the four pillars of digital transformation independently. Digital transformation involves putting them all together, so they feed off of each other. Technology may be the driver of change, but data is needed to figure out why and how to change.
Developing processes helps determine how the change will be implemented and for the change to happen successfully, you must be able to motivate organizational change. It’s also crucial to first identify your business goals so your business or organization can determine what order these should be executed.