What Is a Digital Transformation Anyway?
Some buzzwords deserve the hype. “Digital transformation” is one of them. Like many other buzzwords of relatively recent acclaim, however, digital transformation appears to be self-explanatory while also being vague and ambiguous at the same time. What exactly is a digital transformation, anyways? Is it really such a big deal? What is Digital Transformation? Digital […]
Some buzzwords deserve the hype. “Digital transformation” is one of them.
Like many other buzzwords of relatively recent acclaim, however, digital transformation appears to be self-explanatory while also being vague and ambiguous at the same time. What exactly is a digital transformation, anyways? Is it really such a big deal?
What is Digital Transformation?
Digital transformation is the integration of digital technology into all areas of a business, resulting in fundamental changes to how it operates and how it provides value to customers. It’s also a cultural change that requires organizations to challenge their assumptions about what customers want and how best to serve them.
At the heart of the effort is the term “digital” — the use of business technology to push software modernization. Today’s modern business landscape is awash with SaaS platforms and solutions providers each contributing to a bigger picture: technologically enabled markets that are always innovating… something.
Making things faster, cheaper, more efficient in various business processes through technology — that’s digital transformation. Moving the company from file cabinets full of paper documents to online intranets — that’s digital transformation. Ensuring all staff are well-trained and efficiently adapting to new tools, standards, and skills — that’s also digital transformation.
Digital transformation is indeed both self-explanatory and vague and ambiguous because of the scope and scale that it can potentially encompass. It can be as simple as moving from invoicing via spreadsheets, calendars, and emails to a unified, centralized platform that automates much of the work on a schedule. It can also be as complex as moving an entire client list with tens of thousands of data points from static databases to a full-feature CRM while also migrating from disjointed company resource silos to a single ERP dashboard — and then integrating one with the other seamlessly.
Why Should Your Business Consider a Digital Transformation?
In the previous example of automating and unifying a multichannel invoicing process, the benefits are obvious: more efficiency, less human error, better centralization. In the latter example of organization-wide software modernization, the competitive advantages may also seem obvious, but the effort is so Herculean at first glance that you’ll justifiably wonder if the return is worth the investment.
Every digital transformation brings about distinct and varying degrees of competitive advantages. Generally, however, you can boil down the specific benefits into generic categories. Digital transformation lets you:
- Improve antiquated systems – Legacy is comfortable, but current generation tools supplant them for a reason. Usually newer versions are simply better, i.e. more efficient or effective. Regardless, the limitations of the tools you use directly impact how well you can serve your target audiences.
- Increase efficiency and productivity – With increased efficacy comes concrete benefits in the form of better stats, or if you’re not actively tracking any metrics (you should), a general improvement in output pace or quality.
- Improve customer satisfaction – Your clients and customers will undoubtedly notice — and appreciate — any product manufacturing or service delivery improvements at the tail-end of your digital transformation. Even if the effort was inspired by something other than improved customer satisfaction, it simply follows genuine digital transformation.
Notice that these competitive advantages not only all stem from digital transformation but also come as a natural consequence from each other. For example, investing in the right business technology will improve your legacy systems, and doing so will increase efficiency and productivity, and that, in turn, leads to improved customer satisfaction.
Genuine digital transformation nets you all these advantages while also making these benefits bounce off of each other in synergy. Now, what that looks like in the end, for you, will be unique to your business. It might be better sales, reduced overhead, or maybe better Customer Satisfaction Score or CSAT.
How can Businesses Go about Digitizing Their Processes?
Strategizing a digital transformation is as difficult as the effort is complex. Simpler endeavors are pretty straightforward (recall the example for invoicing), while a more complicated push would not only require more buy-in from the top down, but will also garner more pushback.
Ideally, you should:
- Invest in a hardware and software tech stack – Naturally, you’ll need to find focus areas where key investments in hardware or software technology can bring about organizational change. You can also go the other way around: take a look at available hardware and software and see how they can potentially positively impact your organization.
- Invest in your employees with training and upskilling – Ensuring your staff is sufficiently skilled in new technology has practical, apparent ramifications, but it’s more about instilling a culture of constant technological adoption and advancement.
- Invest in knowledge specialization and transfer – Understand the value of bringing in a consultant or relying on solutions providers to help steer you towards the right course.
Forget the fanfare and focus on the facts. Digital transformation, when done right, goes beyond being just a buzzword and into being a strategic step towards the next level for your business.
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