What is Digital Transformation?
Digital Transformation is a transformation of a business to adapt and leverage digital technologies. Conclusion: there are many upsides of the transformation as it opens up possibilities that were not possible before, such as geography restriction of clientele, speed of delivering services, and more. This involves modifying existing business processes, culture, and customer experiences.
Why?
There are two stances, defense, and opportunity.
Defense stance. With the changes of environments & behavior of consumers due to the advent of technology, the digital transformation ensures the business stays relevant to the market demand and survives the changes.
On the other hand, opportunity stance. As previously mentioned above, on the upside of the Digital transformation. For example, how Netflix came up with the Squid Game series by tapping into their customers’ behaviors database.
Digital transformation is more relevant to a company that started before the digital age, but it is also relevant to new ventures today! Technology enables many tools which have become accessible to everyone. For instant social media, OOT chats apps, the payment system have become a norm today, and practically many people have a second life within the digital ecosystem. Therefore, how consumers interact with tools, people, & life changed how they engage with your brand and services. As a brand, if we are not part of their life in this ecosystem, another brand will be very high. Opportunity cost here is a high stake one.
Why fail?
Many ventures, new or old, failed in their attempt for digital transformation. According to the Mckinsey survey, less than 30% of digital transformation initiatives fell short. Only 16 percent of respondents say their organizations’ digital transformations have successfully improved performance and also equipped them to sustain changes in the long term. An additional 7 percent say that performance improved but that those improvements were not sustained.
Digital transformation is more than just the tools. Hundreds of SaaS products and services popping up in recent years do not help the confusion. Each claim how they can transform your business around in a simple integration. Plug & play! Unfortunately, great tools without the change of other elements in the organization will not work. Imagine letting a regular driver drive an F1 car. Imagine what will happen?
- Digital mindset
- Digital transformation requires changes of mindset. Do you have experience trying out excellent new project management software like ClickUp or Trello? High chances it ends up just another software you abandoned after toying with it and returning to your old faithful excel? This is an example of a mindset problem with the transformation. Imagine the change of mindset across your organization?! Now many leaders start to cringe
- Digital leader
- Change is hard; digital transformation will be even harder! Like any change, a well-planned change management process has to come from the top. For the case of digital transformation, it required a digital leader to enable the change.
- The process & the culture
- This translates into changes in culture and way of doing things in the organization, thus changing the processes. The processes of keeping in touch with customers. Selling to customers, internal processes, communication, project management & alike.
Recommendation
According to an article from a Forbes publication, The six pillars of digital transformation are experiences, people, change, innovation, leadership, and culture. Let us take a look at each pillar and understand the backbone of the digital transformation.
Pillar 1: Experiences
Before adopting new technology, a deep understanding of your customer experience CX is vital. Why the company needs the tool? What are the consequences of the CX as of the technology? These expectations should be the basis of any investment, instead of asking their customers to change to fit new processes, perhaps losing them altogether in the process. The only way to do this is to focus first on the customer’s experience. This is why companies like Disney, Apple, Starbucks, and Nike have become iconic in their respective industries. They lead with experiences and create deep connections with their customers that go far beyond a product or service.
Pillar 2: People
Are you and your organization ready for digital transformation? Ultimately it is the people who run the organization and the customer we cater to. People likely will be the most critical part of the six pillars of digital transformation. Without the right talent or focusing on your employees, your organization will struggle. The key is to use this technology to create meaningful experiences that are more profound for employees, customers, and others – still connecting humans to humans.
Pillar 3: Change
Any transformation will fail without proper change management. Change in as mentioned above: mindset, ways of things even to the leadership role. Managing change is the hardest thing in an organization. You cannot force it, and if you do, the results are short-term at best.
Change management is a process that must be planned & run meticulously and swiftly. One of the go-to frameworks of change is Kotter’s 8 steps of change management. Communicate your expectations to your employees. Develop a strategy to encourage change and deal with pushback simultaneously. Provide the necessary tools and environment for employees to embrace and succeed in this change. Doing this effectively will lead you to the next of the six pillars of digital transformation.
Pillar 4: Innovation
Transformation and innovation are not the same. Both go hand in hand. You cannot run things the way you are after technology transformation. It does not work this way. Here are the areas of innovation: Operational innovation, Product innovation, Business model innovation, Strategic Innovation, and Management innovation.
Innovations are not accidental. It has to be cultivated within the organization. Top management must fully support innovation initiatives and the company must have a process and system to nurture and manage innovation.
Pillar 5: Leadership
Leadership can come in many forms, but it must come from the top if you want the organization to change. The saying that you have heard a million times is true, you must lead by example. In an article for Forbes last year, it was found that most tech initiatives fail when the CEO is not involved. However, the CEO should not only be involved, by he or she should lead.
Leaders should be proactive and on the lookout for things coming down the pipeline. As technology moves quickly, there is no time to wait. You should also bring order as a leader instead of going with the flow. As much as technology can sound like the perfect plan, take your time to scrutinize all options. Think differently than the rest and lead others within your company to do the same. Don’t just follow the digital transformation crowd – lead it.
Pillar 6: Culture
You may be surprised that the first thing to transform for a digital transformation initiative will be culture transformation. It makes complete sense. Culture determines how we do things and how people are motivated to push when there are challenges. After all, the people will manage and deal with the new technologies implementation. By creating an open space where employee and customer experiences reign supreme, where people matter most, change is planned for and innovation takes center stage, you will lead your organization into a culture that transforms on its own.
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