Quickstart Guide to Your Organization’s Digital Transformation
A digital transformation refers to how your company uses technology to improve, adapt, and redefine established business processes.
It’s a broad trend to consider all at once, but it’s one of the most prolific shifts in modern enterprise: IDC predicts that by 2021, investment in digital transformation technologies will reach $2.1 trillion worldwide. In short, companies without a strategy to ride the wave will quickly fall behind.
What Is Digital Transformation?
The name is a bit of a misnomer; digital transformation isn’t about completely redefining services, but about using technology to mature the ones already in place. For example, transitioning to a more robust email service provider with more advanced segmentation capabilities that may be required as a company scales.
But the trend doesn’t just apply to services and procedures. A true digital transformation requires a company-wide shift in priorities undertaken by all employees. It involves changes in organizational structures and operating models. Naturally, the C-Suite will spearhead these large-scale transformations, but its the broader cultural acceptance within the company that sets a digital transformation apart from a bolt-on tech solution.
Transformation Isn’t Optional
Digital transformations are all about staying ahead; implementing the technology tools and attitudes your company needs to stay competitive in a world where tech optimization is a key competitive differentiator. In brief, your digital transformation is inevitable. It isn’t optional. It affects your revenue, it affects your ability to attract new talent, and it affects your ability to deliver great experiences to your customers.
According to a 2017 report from Gartner, 56 percent of CEOs claimed that digital transformations increased their profits.
What Are the Components?
The components vary across industries, but there a few aspects that remain true no matter what. We call these the A-B-Cs of digital transformation:
- Agile workers capable of promoting, and working within, a tech-focused company culture;
- Base IT infrastructure capable of meeting the new tech demands of digital improvements;
- C-Suite executives willing to act as top-level drivers of change and development.
There’s plenty more to it, of course, but these are the essential elements you’ll need to make your transformation successful.
As an example, let’s consider how Netflix adapted its already-competitive business model to transform itself into one of the most valuable media companies in the world. Back in the 90s, the company was little more than a web-based video rental service relying on a pay-per-rental model and snail mail delivery. But over the years, it adapted its processes to focus on digital video streaming by doubling down on digital investments: Cloud data management via AWS, experiential algorithms, and an on-demand delivery model backed by a stellar UI.
This was only possible through the A-B-Cs: Netflix had the executive buy-in. They worked to develop a company culture focused on service. And they reinforced their company with extensive investments in web engineers, IT infrastructure, and digital experiences to drive results.
Start With Small Goals
Discussions of digital transformations are fertile ground for revolutionary (yet buzzy) concepts like AI, big data, and machine learning. Companies hear these phrases and leap to examine all possible options for business revolution, but in truth, these companies are destined to fail.
The best way to approach digital improvements is to line out specific issues your company is facing and determine which solutions can address those needs. These solutions need to be closely tied to specific, actionable business issues.
For example, consider the success of Home Depot’s post-recession digital transformation. Recognizing that simply building more brick-and-mortar stores wasn’t generating a substantial profit, it increased its focus on e-commerce and integrating its retail stores with a powerful digital experience.
We don’t have space to list every improvement made by the company, but suffice to say the results were impressive: Home Depot generated an estimated $90 billion in annual revenue in 2016 without opening a single new big-box store. This is a digital transformation done right.
Transformation Is the Future
Digital transformations are a big project for any business, but hopefully this rundown gave you an idea of what to expect—and what you can achieve. If you’re interested in learning more about the specific adaptations you can make to improve your digital presence, contact Urgenci for a business assessment.