Digital transformation is a trending topic at most businesses today. However, even within the same organization, each stakeholder might define it differently. For some, it means developing a new mobile app or implementing a customer engagement tool. For others, digital transformation is an enterprise-wide effort to rebuild competitive advantages. Before beginning your journey, it is essential to have a clearly defined and agreed upon definition for your team.
What is Digital Transformation?
To characterize digital transformation in more general and open terms, we define it as the integration of digital technology into all areas of a business. This integration creates a renewed strategy and process for company operations and for delivering value to customers.
In addition to the technological and physical changes, digital transformation represents a cultural shift. Employees at innovative businesses are encouraged to continually challenge the status quo, experiment often, and fail fast. These changes require an overhaul of long-standing business practices and the implementation of relatively new methods that are not always defined and might be without a proven ROI.
Digital Transformation or Digital Upgrade?
While many companies target digital transformation, they end up with a series of digital upgrades. These new tools or systems use technology to increase the efficiency of the current business model or processes. While upgrades can be useful, digital transformation only occurs when digital technology changes the way a business operates particularly around customer interactions and the way business agents create value.
If you find that you are engaging in an upgrade as opposed to a transformation, ask yourself if it is enough to compete with your peer companies.
Digital transformation can seem like an overwhelming process, because digital business components are pervasive and have a massive impact on customer behavior and operations. As a result, it is difficult to know where to begin and to define activities. Executives who are responsible for the process should review the new frontiers where changes are happening, the primary business areas affected by the change, and the foundations needed. This analysis allows leaders to clarify and demystify the process.
When leaders prioritize based on likely impact and feasibility, they begin to see a clearer path, and they get an understanding of how digital transformation could impact the business and how to remain competitive in the digital landscape.
Digital transformation is more than jumping at the latest trends. It must be purposeful, and it cannot be undertaken in a vacuum. Avoid being reactionary and ensure the transformation is relevant to your business, with real business goals.
Digital upgrades can positively impact business outcomes and customer satisfaction. Furthermore, these enhancements often serve as necessary proof points and first steps toward a more substantial digital transformation.
However, digital transformation is what is required to dramatically alter the customer experience and deliver the efficiencies and satisfaction necessary to compete for today’s customers.