Technology is changing rapidly, but it isn’t the most critical part of digital transformation. It’s more than meets the eye!
Transformation is more about people than technology. It’s people enablement through tech.
The key to success begins and ends with the customer — if they are not benefiting, what point does it make?
This article aims to throw some light on the subject and answer the most popular questions people tend to have on the subject. Knowledge builds confidence which entails more decisive actions towards digital.
1. What is Digital Transformation?
It is the process of using cutting-edge technologies to create new ways or modify existing business processes, organizational culture and customer experiences in order to better adjust in a competitive market.
2. How long does Digital Transformation last?
First, it’s a never-ending process.
Second, it doesn’t happen quickly.
Within one year is often unrealistic or ultra-ambitious. Startups and small companies can implement this strategy quickly. 1–3 years for medium size organizations is doable. For large corporates, 3–5 years tend to be a realistic goal.
3. What do you need to implement Digital Transformation?
The future of work demands an empowered workforce that can be innovative in solving problems. We must have well-informed and digital-savvy leaders in place. Leaders who know how things work and what they’re doing — especially when that means empowering the workforce for this changing landscape.
To get there, we need people who have not only knowledge but also the right skills for this new era: comfortable with change and willing (even eager) to take risks when necessary!
People also need support to continue in new ways of communicating through both traditional methods and digital platforms like email newsletters etc., which can help stay up on company news faster than ever before.
4. How much does it cost to finance Digital Transformation?
The precise cost — not for this world.
The cost of digitalization is influenced by the scope. Modernizing your business is costly. It’s a lot cheaper and more efficient to update one area at once than to try and do it separately for each segment of company operations that needs attention. But this doesn’t mean you shouldn’t do it!
Then the size of the company determines the price. The smaller the company, the less expensive it is to change. The bigger your business the more people you have working. That means there’s a higher risk of conflict or resistance so it takes longer.
The third is the current procedures & technology affect the cost. To modernize outdated and complex systems may cost more than just implementing something from scratch. Usually, people don’t like to do what’s not in their comfort zone which increases the price of the process.
Lastly, the culture and mentality of a workforce can make or break digital transformation. The workforce has to see straight to keep their eyes on the prize. If there are negative attitudes or if people don’t want to participate then it’s unlikely to make the process cheap. Pouring money into an inefficient project is like leading a thirsty horse to water. However, you can’t make him drink it.
5. Can the industry you are in participate in Digital Transformation?
Yes but you have to be at least 10% original to not copy the companies below.
Examples of digital transformation in different industries:
Manufacturing — intelligent factories that use automation or 3D factory digital twin for productivity. A company, for example, Infinite Foundry in Portugal.
Hospitality & Tourism — digital check-in and check-out without needing to meet people to rent and travel. A company, for example, Airbnb in the USA.
Healthcare — 3D holographic imaging to enable better medical care and surgical planning. A company, for example, Holocare in Norway.
Mobility — sustainable micro-mobility in cities where electric bikes are accessed via an app with a QR code. A company, for example, Zoov in France.
Retail — proprietary e-commerce platform for online stores that includes payments, marketing, shipping, and customer engagement tools. A company, for example, Shopify in Canada.
Education — expert teaching for future skills delivered by world-class universities and organizations online. A company, for example, FutureLearn in the United Kingdom.
Even a simple e-signature platform adoption in Swiss banks is good enough that customers don’t need to fly from Portugal just to sign one paper and fly back to continue their vacation.
If they can do so you can too.
6. What are the metrics to measure progress in Digital Transformation?
In the beginning, focusing on four key areas is a good idea. It will give your company a competitive edge.
The first is operational efficiency, which includes everything from cost-cutting to better work production practices. Then, customer engagement can be improved through initiatives like social media training for employees who interact with clients. While employee engagement & retention rates are strongly connected to how well vision, mission, and the actual work resonate with employees. Business needs to create more value in their product/ service offerings.
7. Who leads and executes Digital Transformation?
It is connected to technology and customer experience. The number of stakeholders depends on the size of your company. For a startup is the founder who conducts the process. For medium and large organizations there is a combination of several CxOs.
One of the combinations may be CTO, CDO, COO, and CEO to lead the digital transformation from top to bottom. For example, CTO maintains and develops tech, CDO makes it relevant in value creation, COO integrates it into business & CEO approves it. Together it makes a good core team for digital transformation.
Another combination is structural. Upper management defines and develops the framework within which employees can strive and be rewarded for initiatives they demonstrate and guided to advance business success. The change comes bottom-up when structures are in place. And employees are the ones who drive it forward. That’s why culture and attitude are important.
8. When organizations should do Digital Transformation?
The ideal starting point was yesterday. Another one is now if it’s not in place. Postponement makes business less competitive every month depending on how competition is doing. Good idea to keep internal culture ready for the change and the budget to finance it.
9. What are signs you need a Digital Transformation?
Repeat business used to be a regular occurrence, but now it’s not quite so common. Something has changed. You used to get many referrals from happy customers, but now they’re not coming back for more business.
Your technology systems feel old — employees are asking for features they’re used to from consumer apps. As technology becomes more advanced and interactive, it’s natural that employees will want features from consumer apps. Spreadsheets are great, but you shouldn’t be using them for everything.
The tried-and-true methods that are used to generate leads are no longer working. Marketing campaigns have become more sophisticated, and people are savvy to the old tricks.
10 What are the reasons why Digital Transformation fails?
Companies only focus on technology. They need a holistic approach that considers not only technology but also the employees’ values and beliefs for them to all work together and adapt.
Isolation. The more isolated business departments are from one another, the less cohesive and innovative they become as a whole. Lone wolf mentality may be detrimental to the success of digital transformation attempts because sharing information is what carries the company through the process.
Not hiring the right talent. What’s good on paper might not be suitable in practice. Someone with a triple master’s degree is an attractive hire but may not be a right fit for your organization. You need to do more than just look at someone’s resumes, you also have to get them out there and see what they can do!
Not having the correct data in the right place. Data is the new currency in today’s world. And without it, you are just guessing what your organization should be doing next. Inconsistent data has the potential to distort insights. If this occurs, there is no clear understanding that will result in misguided decisions that could drive an organization off track.
Not building to scale. Implementing new tech is good, but if it’s in a legacy or broken system, it will function separately to accomplish organizational goals slowly. In order to scale, you need technologies that integrate with all of your other technologies.
Ignoring the customer experience. Putting the customer experience first in the process is vital for digital transformation. This is the key to its success. Companies going digital for the sake of going digital miss the point so ends up without reaping expected benefits.
Fear of temporary mishaps. When trying new things, it is normal to feel some anxiety. You might also overestimate the benefits and underestimate costs which can lead you to poor decision making. When you do something it may hurt in the short term, but that’s why there are risks and rewards for every action. Keeping a long-term perspective is a good idea.
People are change-averse. While it’s true that people are averse to change, this is an issue when you’re talking about digital transformation. In fact the only thing more frustrating than having your old systems not work is trying to figure out how we can get somewhere without changing anything at all. Resistance to change is one of many influences sabotaging digital transformation efforts. Sell the benefits.
11. When do you know if you make progress?
Success criteria of digital transformation mean knowing when it’s done.
For example, automating repetitive but important processes is a sign of progress. When the process gets automated this is an event of success.
Another example is being able to make informed decisions and reduce guesswork. This is a sign that things are going well. This would translate to having data-driven practices in place.
Also, digital transformation can be a game-changer for your organization bringing the old ways of working into modernity with its benefits. It means producing the same amount of work cheaper and faster.
12. What are the drawbacks of Digital Transformation?
The drawbacks might make people too dependent on gadgets where a lack of human agency can be challenging, especially when the internet isn’t always reliable. Sometimes, people get lost without access to their devices, making work and communications more difficult.
13. What do you need to know before getting involved in Digital Transformation projects?
Success is rare and failure is likely.
70% of digital transformation initiatives are likely to end in failure as BCG found. That’s a pretty high percentage considering the alignment and preparation in which they’re being taken.
This leaves a beautiful 30%+ success rate on the venture which is good to know before planning.
Hopes are this article gives the right expectation that digital transformation. Good idea to move digital if you haven’t. Customers waiting for it.
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