Particularly among larger companies, the term “digital transformation” has been commonly used over the last few years.
The digital age is well and truly here, and it is commonly acknowledged that if your business isn’t up-to-speed with it, then you’ll be in danger of falling behind competitors.
Digital transformation can present a learning curve for companies. One of the biggest challenges they often face is resistance to change, a very common reaction among people. Top-performing companies tend to prepare well so that the change is embraced and implemented more easily.
How can you prepare for digital transformation? Let’s take a look:
What is digital transformation?
First of all, with the term “digital transformation” often becoming one of those overused buzzwords, it’s important to have a clear definition for what it means. This definition from MIT puts it quite succinctly:
“… the use of technology to radically improve performance or reach of enterprises.”
How can your company harness the technology that is available to improve overall results? How can you stay ahead of the curve and ensure that you’re able to move with some agility as technology develops?
A later MIT article provides some interesting food for thought, claiming that the term “digital transformation” is often a misnomer:
“Digital transformation is not about technology. A key misconception about digital transformation is that it is something that companies choose to do with technology or is primarily about their implementation and use of technology.
Instead, digital transformation is about how technology changes the conditions under which business is done, in ways that change the expectations of customers, partners, and employees.”
For example, now that mobile is a very widespread medium, there is a certain expectation that businesses will offer mobile-enabled technology. We don’t want to actually go to the bank, we want to quickly deposit a check using a mobile app and get on with our day.
Companies such as Uber have been able to recognize the potential of mobile technologies that they didn’t develop themselves, to provide a platform for their own business. Uber is a car hire service that owns no cars! The entire premise is tapping into resources that already exist through a mobile app.
So in a large company, perhaps one that has a history with legacy technologies, digital transformation may well be about meeting the expectations of your customers, partners or employees for adoption of digital technologies. You might not have begun life by latching onto new technology opportunities, like Uber, but you can certainly get up-to-speed.
Where does your business sit currently?
One of the first things to identify may seem a bit obvious, but is often overlooked – how digital-ready is your business right now? You need to understand where you are at and where you’d like to be, in order to build a logical path between the two.
Most of the time, enterprises will fit into one of three categories before they embark on a digital transformation:
– They operate on pure legacy systems. These were created before the web was prominent and often have user interfaces that are not friendly to use. These systems don’t interact with data at all as everything has to be manually input.
– They have some kind of web-enabled platform. It might be old, but it connects to the internet and has some kind of data interaction. The user interface might be a bit better than a legacy system, but these systems, especially those from early web-enabled days, don’t work well under data-intensive scenarios. They are usually still the sort of system where a new employee might need a week or more of training to use them.
– They have digital-ready systems. These offer quick and agile access to data and usually have simple user interfaces, allowing easy, intuitive use. They usually operate as cloud-based to improve agility. Even one of the oldest bastions of tradition and legacy software – banking – has taken steps to using cloud-based software. Bloomberg reported that at least 25 of the world’s 38 largest financial institutions and insurance companies had signed up with Microsoft to begin putting applications into the cloud.
Obviously, if your business sits in one of the first two categories, you’ve got a more challenging road ahead for digital transformation. However, no matter where you are at currently, change can be difficult to get going. A lot comes down to the prevailing attitude among team members, but also in how you prepare them ahead of time.
How can you prepare for digital transformation?
Here are a few tips for preparing ahead for digital transformation:
#1. Prepare a roadmap
You’ve got to have a strategic vision for how technology is affecting and continuing to develop within your industry. Where does your business fit in? How will you position your company to take advantage of technological advances?
Prepare a roadmap that is as specific as possible, guiding you from that starting point you’ve identified, to key goals your business needs to meet. Technology for technology’s sake isn’t a great position to take and it is difficult to gain employee buy-in (a critical part of any digital transformation), if there isn’t a clear map to a specific goal.
#2. Consider customer outcomes
Forrester put out a 2017 report entitled The Digital Business Imperative. In that report, one of their key takeaways was “use digital to help customers get to the outcomes that they desire.” This involves envisioning your business not as a set of products and services, but as part of the personal value that customers seek and derive from it.
This is similar to the concept of customer success which is regularly discussed among SaaS; it’s about the desired outcomes that they have for using your company, and these may look slightly different for each customer.
When you think along these terms for digital transformation, you position your company to increase your value to customers. You become a key part in achieving their desired outcomes.
#3. Include operational agility
Operational agility should be a key outcome of any digital transformation. Your digital transformation provides you with a great opportunity to drive that operational agility, streamline processes and ensure that team members have user-friendly tools.
When you prioritize operational agility, you can get a number of flow-on benefits, such as; better productivity, faster speed to market for any new products or services, leaner, more agile processes and maximum utilization of your assets. It can even unlock new revenue streams for companies.
“Digital has transformed more than your channels and customers. It also disrupts you from within, changing the way that you do business. Digital not only accelerates the pace of change but also brings new opportunities for firms that can embrace the technology fast enough.” (Forrester)
#4. Communicate early and often
Communication and the ability to influence your team are vital parts of a successful digital transformation. Change is often viewed with suspicion, or even hostility – it’s the human condition to tend to want to remain stable and avoid change.
This is why communicating early and often is important. Your team members need to know why they should care and what the goals are for the transformation. Effectively, you’re letting them know that it’s not a case of changing just because you can, but in order to move the company forward, improve results, improve their work conditions and any other outcomes you’re aiming for.
There may be other stakeholders you need to convince as well, such as partners or business unit heads. It’s vital to have that clear vision and to communicate it clearly to gain their buy-in.
#5. Define your business culture
Sometimes a digital transformation can require a redefining of your business culture, or at least a reaffirming of it in order to engage team members throughout the journey. A successful transformation involves commitment from everyone, at all levels of the business, so it’s important that your culture facilitates this.
For example, companies that are heavily siloed can find it difficult to gain buy-in, especially if traditionally people have stuck to “their” area, or there are barriers to communication in place. Companies that foster collaborative cultures, with a commitment to innovation, tend to be able to get through digital transformation more easily.
Preparing your company for digital transformation involves a period of self-assessment, goal-setting, and road-mapping out how you are going to get from where you are now to the end result.
It’s important that you consider both customer and operational outcomes, and communicate early and often with team members and stakeholders. Your aim is to ease the transformation process by gaining buy-in as early as possible. This may even involve a re-definition of your business culture.
Koombea helps companies through digital transformation by building the vital apps they need. Talk to us about how we can help you today.