The Real Meaning Of Digital Transformation: Increased Agility

Digital transformation has taken over the strategic initiative conversation within organizations. According to the Economist Intelligence Unit (EIU), 77% of businesses state that digital transformation is their first strategic priority. Both digital native and non-digital companies are working to reinvent using current technologies to the fullest – all to stay competitive and profitable in an increasingly dynamic environment. Customer experience, business agility and operational efficiency are the primary goals that drive organizations to undergo digital transformation.

Digital transformation requires modern organizations to be both bold and agile in order to keep up with the pace of the evolving landscape. Companies strive for not only modernizing or digitizing the existing processes, but also facilitating faster time to market for new products. Thus, digital transformation is a complex initiative that impacts a business from operations and customer-facing processes to the company business model.

Agility is at the heart of Digital Transformation

In the era of the digitally native customer and ever-shifting landscape, digital transformation has become one of the most viable strategies to accelerate business activities, processes, business growth and to fully leverage available opportunities. Most businesses have already gone through some degree of digital transformation. But simply adding better lead-scoring or segmentation software is not transformative (although it’s a good start).

There are a few key areas to focus on when tackling a digital transformation project to increase agility in an organization.

“Make sure your core technology platform offers the agility to continually test, modify, and improve processes to stay tuned to the new business environment.”

Internal operations

Everything starts here. Having a firm grasp on how all organizational processes are being re-arranged within the company is critical to understand.

The capability to streamline business processes and the agility to change them as fast as the market requires, brings new appeal to companies in the digital era. According to the recent research, 44% of the surveyed businesses became more profitable after shifting to agile processes.

If you find these processes to be manual, there are a variety of tools available to help automate and step up a company’s processes internally but they can be narrowed into two types of solutions.

The first is point solutions which help to deal precisely with priority and specific operations. Those tools include content management systems, social profile management, accounting/billing, and other software for dealing with any operation in your business (ie: Buffer, Invoicely, Drupal). These are great for focused activities that require deep specialization because point solutions can typically be quickly integrated into a core platform like CRM or BPM. As an individual piece of software handling fewer processes, it’s much easier to adopt. The downside with individual/point solutions is that they simplify a smaller part of workflows and aren’t fully integrated with other processes. Thus, workflow gaps can develop and cause delays.

The alternative is an orchestration of a range of point solutions, which the average organization has 91. Managing the entire network of internal operations on a single platform will lead to an improvement in automation and organizational alignment. It will also help measure and optimize the entire process and the corresponding workflows and tasks, as well as automate routine or repetitive tasks eliminating many manual activities.

Customer-facing processes

Deficiency in customer-facing processes and difficulty in modifying them can cause frustration, delays, and financial loss. New business goals, innovative technologies, and changes in the market environment can all cause established processes to become inefficient.

For example, with social media penetrating every aspect of our lives, it’s important to utilize social media as an effective communication channel as well as a profiling device. If you don’t leverage social media as it becomes ‘the new normal’ for each and every person, chances are your business will underperform and you will fail to provide the best customer experience. You need to modify your process, incorporating social media as a possible communication channel at every stage of the customer journey to ensure that every client gets personalized attention at every point of interaction with the business.

Make sure your core technology platform offers the agility to continually test, modify, and improve processes to stay tuned to the new business environment.

Business model

A core milestone on the way to digital transformation success is the ability to rethink existing business models and how the use of technology changes your go to market strategy, handles sales transactions, or alters which geographical markets a company serves. Reinventing how your business operates might be the hardest part of embracing agility, but going forward this will remain an inevitable and repetitive part of your strategy.

In some cases, businesses will need to rethink their whole strategies and ways of doing business, in other cases, they change specializations. For all of these, however, there is a number of pioneers who succeeded and shifted their ventures to the new digital markets:

Microsoft. Their main sources of earnings, PC royalties and licensing, were being significantly challenged due to a shift toward mobile technology. So they took this change as their priority and adopted new advertising and subscription-based models, with a focus on mobile devices.

Lego. The company was near bankruptcy in 2004 and underwent a restructuring. Now their design capabilities are being handed over to its fans, and Lego has set up new digital businesses: movies, Lego Mindstorms, video games, etc.

IBM. In the early 1990s, the huge hardware seller hit a wall and decided to transition to a technology and consulting services business. And for a good reason as they increased both their operating margins and valuation from year to year.

Don’t be limited by technology

Companies don’t have to be high-tech to use the best technologies to drive better productivity, efficiency, and customer satisfaction but it is imperative to keep in mind that digital transformation is not a one-time event or project, it’s a commitment to a perpetual transformation.

Don’t be fooled by some of the digital transformation buzz out there, digital transformation is a business discipline or company philosophy, not a project. And companies that want long-term success need to maintain focus on becoming more agile so you are ready to take on anything that the future can throw at you.