As the acceleration of the current digital business transformation pushes the boundaries of many traditional industries, companies are trying to adapt. The reality is that many will have a hard time trying to figure out what they need to do in order to stay relevant.
Businesses need to successfully implement digital transformation strategies. First, they need to have a clear corporate digital strategy. Failing to do these will most likely result in a loss of competitiveness, but more importantly, it might make brands irrelevant to consumers as a result of a digital divide.
For companies to stay afloat, a new form of thinking about technology, customers, and business is required. In this post we address the key aspects to ensure your company undergoes a successful digital business transformation.
What Is a Digital Transformation Strategy?
Digital transformation refers to the general process that requires companies to digitize their activities. Many companies are currently undergoing this as a result of an accelerated pace of adoption of innovative and disruptive technologies. In particular, it refers to the way companies are responding to the growing digitalization of the way business is done. Although this process had already been around for a while, it was vastly accelerated by the pandemic.
As a result, an important digital divide is starting to emerge between the companies that were prepared beforehand and those that weren’t, or from another perspective, between those that are successfully adapting and those that are having a hard time.
A digital business transformation is not something that naturally occurs. Companies need to understand where they stand, not only in terms of their competitors and their industry, but also in relation to their customers. After all, being customer centric is one of the most important aspects that any type of company can embrace right now.
By having a clear understanding of their customers, companies can better align their digital transformation strategies to stay relevant. A strong digital transformation strategy can facilitate a business transformation, just as a weak digital transformation strategy can be detrimental.
Why Are Businesses Experiencing a Digital Transformation?
Businesses are experiencing a digital transformation due to various reasons. Although these reasons don’t fully explain why a specific company might need to undergo a digital business transformation, they do help sketch out a general idea of the process.
These are some of the main reasons why businesses are experiencing a digital transformation:
Enhanced Customer Journeys
The notion of a customer journey has become more important as companies shift from a product and service driven mentality to a customer oriented one. Although products and services are not going to disappear anytime soon, they are now being understood through the lense of customers and digitalization. By building superb frictionless experiences, companies have the opportunity to redefine their processes, optimizing their business along the way.
Innovative and Disruptive Technologies
Technology is at the heart of digital business transformations. The world has seen an increase in innovations in the past decade like no other period in human history. This has had a profound impact on how companies operate, and most importantly, on how customers interact with the products and services they need. This has resulted in companies needing to embrace the right technologies in order to stay afloat.
New Business Models
As businesses shift their mentalities and new technologies show up, new possibilities emerge. The idea of having a clear, sustainable and well thought business model is now more relevant than ever. Companies all over the world can now compete with one another, reaching out to customers, no matter their location. Implementing new business models for existing companies requires a digital transformation strategy.
Need to Adapt to Changing Environments
External factors have never been as important as right now. In our interconnected world, being able to adapt and respond to changing environments is a must. Companies need to become resilient, that is, being able to embrace change without losing their core purpose. This is something that digitally prepared companies are able to do better than their unprepared competitors.
Why Digital Transformation Is Important
Depending on the industry, implementing a successful digital transformation can be a matter of life or death. Industries that are highly driven by technological innovations require that companies adapt at a very fast pace.
To do this, it is necessary for companies to have a digital transformation management mentality. Top level executives need to understand the importance of this process, or else fail to become relevant to their customers.
A digital transformation will not guarantee success on its own. However, it can make the difference in terms of leveling the playing field. Not being digitally prepared means that there is a growing digital divide to fill, making it harder to compete in an already competitive market.
The Main Areas of Digital Transformation
There are numerous areas where companies can implement their corporate digital strategy. These are the most important ones:
Artificial intelligence (AI)
Companies can use computational tools like Artificial Intelligence to automate processes, helping increase productivity while reducing costs. This helps improve the overall Customer Experience (CX) of any organization.
Internet-enabled devices can open up an entire world of possibilities for all sorts of companies. The only limit to this technology is how creative businesses can get.
It is no longer necessary that businesses have their own IT infrastructure. Third parties provide these services in a cheaper and more effective way, helping develop solutions tailored to customer needs. Having the right DevOps team becomes mandatory for cloud technologies.
This is still in its infancy, but it won’t be long before companies start reaping the benefits in new and exciting ways. Just like the internet changed the world, it is expected that Blockchain will revolutionize the Internet.
As digital technologies become the norm, it is expected that new risks emerge. Having secure IT systems is something that organizations need to understand if they want to deliver top quality products and services.
Digital Transformation Process
There is no one size fits all process for how a digital transformation ought to occur. Nonetheless, there are a series of requirements that need to be considered in order for the digital transformation process to run smoothly. These are some of them:
Understand Your Customers
We cannot emphasize this enough. Getting to know your customers is an essential part of building a successful digital transformation strategy. It is key that the digital transformation management team understands this.
Find the Right Digital Transformation Partner
Embarking on a digital transformation process without the help of an experienced business partner is a risky gamble. Many technology companies are fully prepared to help you throughout this journey. Your partner should be knowledgeable about your industry specific needs as well as the technologies that might favor you.
Use Technology as a Means, Not as an Ends
Although technology is at the center of any solid digital transformation strategy, it is not to be confused with the end goal itself. Companies need to have a clear understanding of their goals to avoid this mistake. When technology is confused with the ends of a company, it is easy to become derailed.
Customer Retention Optimization
Ideally, any corporate digital strategy should consider how to optimize customer retention. This means being able to keep the customers you already have, while at the same time bringing new ones in. The challenge with the new ones is to keep them in your pipeline, reducing churn and giving them reasons to trust you.
To do this, having a customized app can be very useful. Even more important than having an app is finding the right app development partner that can help you build your business app according to your customers’ needs.
Take the case of the digital transformation in banking. The pace of innovation in the banking industry is probably something that only happens once in a lifetime, and that is a lot for an industry considered to be more or less stable. Banks are using digital products like apps to enhance their Customer Experience while at the same time improving their operational efficiency.
Other industries have taken a similar approach when it comes to retaining their customers and implementing a digital business transformation. Like other technologies, apps are not the solution, but they definitely can help you achieve your company’s goals.
Digital Transformation Strategy
A strong digital transformation strategy needs to reflect a company’s vision. Only by doing so will businesses be able to align their entire operations for a greater purpose. Although this seems pretty obvious, aligning a corporate digital strategy with a company’s vision is not an easy task.
One great way to do this is to undergo a discovery process. Through it, companies can understand what their customers’ actual needs are, always keeping in mind important business aspects that are relevant to maintain an important position in the market. Ideation exercises are a great way to figure out how a digital transformation strategy fits within a company’s larger vision.
Selecting a Digital Transformation Partner
Businesses are experiencing a digital transformation. A winning approach requires having the best talent you can find. Only by doing so will your company be able to successfully design and implement a digital transformation strategy that positively impacts how you work.
At Koombea, we’ve been helping our customers develop world-class digital products that customers love. That’s why we have a clear understanding of how to help you achieve your digital transformation goals. Contact us today for a free consultation and find out how we can help you with your digital transformation.