What is Digital Transformation?
Because Digital Transformation looks different for each individual company it can be hard to define it exactly, however, to describe it broadly, it’s the use of any digital technology to provide better products, services, and experiences. It’s the integration of digital technology into all areas of a business resulting in fundamental changes to how businesses operate and how they deliver value to customers.
It rises above 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 digital applications, we have the chance to reimagine how we do business, how we engage our customers and how we structure business with digital technology by our side. This change isn’t just structural or technological, it’s also a cultural change, one that requires organizations to continuously challenge the status quo and experiment often.
Why does Digital Transformation matter to you?
A good digital transformation strategy aims to create new capabilities by fully leveraging the possibilities and opportunities of new technologies and their impact faster, better and in more innovative ways in the future.
As such, this is a survival issue for many, even if they don’t realise it. The pandemic has proven to be a watershed moment for the Digital Transformation of business, an organization’s capacity to adapt quickly to rapidly changing customer expectations, time to market pressure and supply chain disruptions has become critical for success.
A commitment to Digital transformation pays off; SAP Centre for Business Insights and Oxford Economics reported that 80% of leaders who’s organisations underwent digital transformation have reported an increase in profitability and 85% say transformation increased their market share.
The rules for traditional success have changed and we are now ever more reliant on harnessing the power of digital technology and models to create new value and better experiences for customers.
There is a 160% expected future increase in ecommerce purchases from new or low frequency users according to a 2020 study by Accenture and there was a 146% year-on-year growth in online retail orders in North America alone during April 2020. The power and influence of digital technology has never been more evident.
Digital Transformation allows for excellent data-based customer insights. By better understanding your customer and their needs, you can create a business strategy that is even more customer-centric. Using both personal customer information and social media metrics, these insights can help drive business growth. This data can also drive some investment decisions and help plan for potential new growth areas,
Digital Transformation is redefining how companies operate, successful leaders will leap upon the opportunity to chart a new course using digital transformation that aligns with the changing nature of business, technology and consumer behaviour
What might be stopping you?
- Company Culture – Outdated mentalities can often get in the way, encourage exploration and experimentation! only 13% of over 4300 global leaders surveyed by MITSloan in 2020 think that their businesses are ready for the digital age
- The constant search for expertise – Many organisations have limited digital experience; a 2017 survey by Dynatrace of 1239 global IT and business professionals showed that 75% of respondents, “had low levels of confidence in their ability to resolve digital performance problems”.
- Cost and lack of resources – Transformation can be expensive! A shortage of resources available and poor resource management planning can hurt potential business transformation which then hurts the whole business.
- Complex legacy systems – In October 2017 a survey of 890 CIOs and IT Directors across 23 countries by the Logicalis Group reported that 44% of respondents felt that complex legacy technology was the primary barrier to digital transformation.
SAP and Oxford Economics – https://www.sap.com/dmc/exp/4-ways-leaders-set-themselves-apart/index.html
Accenture – https://www.accenture.com/_acnmedia/PDF-126/Accenture-COVID-19-Retail-Consumer-Resarch-Wave-Four-POV
146% increase – https://www.forbes.com/sites/louiscolumbus/2020/04/28/how-covid-19-is-transforming-e-commerce/?sh=57dd41063544#40620
MITSloan – https://sloanreview.mit.edu/projects/the-new-leadership-playbook-for-the-digital-age/
Logicalis – https://www.us.logicalis.com/globalassets/united-states/downloads/cio-reports/2017-cio-survey-report.pdf
Dynatrace – https://www.dynatrace.com/digital-transformation-audit/