The last two and a half years have had a significant impact on most, if not all, of the organization's IT functions.
Probably due to COVID, but also for other strategic reasons, many companies have recognized that they need to work differently and have embarked on a “digital transformation journey”. However, in many cases, these same companies lack an adequate understanding of the concept itself, the techniques necessary for successful execution, and the pitfalls to avoid.
Definition of digital transformation
Digital transformation has also been defined as the process of integrating digital technology into various sectors of an organization, significantly transforming the way a company operates and delivers value to its customers.
Digital transformation looks different for every company. It is not only an organizational and operational transformation, but also a cultural change. Companies must constantly question their existing business processes to find better solutions. To facilitate or anticipate business expansion, key areas for business transformation have typically focused on creating low-cost products and scaling operations digitally.
One of the illusions about digital transformation that needs to be debunked is that it requires a serious alteration of the value proposition. In reality, digital transformation is simply the use of new digital tools and solutions to better meet customer demands. It could even mean performing the same processes, but more efficiently.
While the term “digital transformation” is commonly used in the context of corporations, it also has a substantial impact on other organizations, including government entities, public sector companies, and many groups active in addressing social concerns such as climate change. These companies also adopt innovative technical solutions to improve their processes, based on their demands.
Why is digital transformation necessary?
A company may want to go digital for various reasons. The most likely reason to embark on the digital transformation journey is that it is an urgent need.
Due to the rise of social media platforms and web-based sales solutions, there has been a paradigm shift in the way customers connect with businesses. The world has shrunk as a result of digitalization, and so have the markets. The international competition has joined the same scenario as the national competition. Now, no part of the world is too far away for a business.
Customer expectations for multi-channel availability and reaction time have changed as a result of digital solutions. Companies are using digital solutions to personalize their products, services, interactions and communications according to the individual demands of their customers.
There are several important factors driving the increased adoption of digital transformation solutions, including:
1. Improved customer service
According to SAP, 92% of CEOs surveyed stated that they use mature digital transformation techniques and strategies to improve the overall customer experience. The 70% of those CEOs also stated that adopting digital transformation into their workflow has resulted in significant improvements in customer engagement and satisfaction.
Customer satisfaction is essential to the success of any business. Providing a superior and unmatched customer experience is what separates successful companies from those that are not. Digital transformation helps improve the speed and agility with which knowledge is generated. Provide a revolutionary customer experience by creating and digitizing customer journeys and developing agility in carrying out journey transformations. This allows companies to gain authority, trust and respect from their customers.
2. Useful data-driven insights
An organization's data is one of its most important assets. It must be used fully.
Digital transformation uses structured and unstructured data to provide relevant and highly personalized information. This also allows for agility and real-time feedback.
Let's take a look at a basic example to see how important data-driven insights are. Digital marketing approaches are considered more reliable than traditional or non-digital channels because digital channels provide quantitative explanations by evaluating real-world data rather than simply providing qualitative advice. Companies can optimize their efforts and improve the results of marketing campaigns using this real-world data.
Organizations can increase their revenue by focusing on key areas that are actually critical to customers rather than those that simply appear to be so but are not based on solid insights based on the right data.
3. Better coordination between all departments
Adapting to change is a challenge for everyone. A large-scale business redesign is a disconcerting idea for everyone, from leaders to junior staff. Regular, clear and transparent communication between departments must be promoted. Everyone must take responsibility for their part in the transformation process. This will only be successful if everyone understands how the vision will benefit the organization in the long term.
4. Greater agility, innovation and digital culture
Agility refers to an organization's ability to constantly change, grow and develop. This is also true for digital processes. When it comes to digital transformation, companies' 68% considers agility as one of the top three critical success factors.
Because the digital landscape is changing so rapidly, organizations often struggle to respond quickly and lose their first-mover advantage. Customers often prefer a less expensive but superior solution to a well-established brand. As a result, not only startups but also well-established companies must continue to improve and adapt to market changes.
Finally, stakeholders should focus on cultivating an innovative mindset and developing a comprehensive strategy to shift the organization's culture toward digitalization.
