Digital Transformation
Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation.
It transcends traditional roles like sales, marketing, and customer service. Instead, digital transformation begins and ends with how you think about, and engage with, customers. As we move from paper to spreadsheets to smart applications for managing our business, we have the chance to reimagine how we do business — how we engage our customers — with digital technology on our side.
For small businesses just getting started, there’s no need to set up your business processes and transform them later. You can future-proof your organization from the word go. Building a 21st-century business on stickies and handwritten ledgers just isn’t sustainable. Thinking, planning, and building digitally sets you up to be agile, flexible, and ready to grow.
As they embark on digital transformation, many companies are taking a step back to ask whether they are really doing the right things. Read on for answers.
Process Transformation
Companies can revise internal processes to lower costs, improve quality and reduce cycle times. Adopting cloud connectivity helps link disparate processes and locations. For example, implementing robotic process automation can transform manual tasks found in procurement, supply chain management and other administrative functions. Modernizing your logistics network and supply chain by digitizing these processes and integrating machine learning and artificial intelligence helps to recognize and shape data patterns into actionable insights.
Business Model Transformation
Business model transformation aims to fundamentally change the way companies deliver value for customers. For example, Netflix made the switch from mailing DVDs to online streaming, while Blockbuster failed to make the transition, which ultimately led to the latter company’s eventual fate. Technology OEMs are also switching from a sales and support model to XaaS, where the “X” may be hardware, storage capacity or applications. Technology companies can reshape their go-to-market strategy and support their customers’ digital transformation efforts with the flexibility to select technology that best suits their needs. Customers often signal their readiness for a different type of relationship through their purchasing patterns.
Domain Transformation
Organizations typically adopt new technologies to redefine their products and services. They might extend current services to a new customer base or develop entirely new technology-enabled offerings. For example, offering equipment on a rental basis rather than purchase-only enables you to reach a previously unserved segment of customers who may only need your technology temporarily.
Cultural/Organizational Transformation
Embracing a digital-first culture enables organizations to adopt agile workflows, develop a bias toward testing and learning as well as support decentralized decision-making. However, a successful transition to a digital-first culture requires redefining mindsets and processes while also incorporating new talents and capabilities.
A typical mindset shift alters from managing production output to focusing on customer service and innovation. Often, the cultural shift occurs organically during other transformation initiatives as internal teams adopt digital workflows and recognize the power of changing organizational norms.
Partner for Digital Transformation Success
Guiding your organization to a sustainable future requires pursuing at least one of these types of digital transformation efforts. Each transformation must focus on business outcomes, such as improved processes and new products and services that build a business case for delivering value in the post–COVID-19 economy.
However, supporting both XaaS and legacy revenue streams requires significant resources, so technology OEMs are partnering with third-party providers for product and customer lifecycle management services to refocus their resources and capital on their core business initiatives.