You’ve probably heard the term “digital transformation” being thrown around a lot in the office and maybe even outside of it. It might sound like just another corporate buzzword, but with global spending set to reach $3.9 trillion by 2027, it’s a phrase a lot of businesses are taking very seriously. Still, the term might be a bit daunting and confusing to you. That’s why this article will take you through what digital transformation entails and how your business might go about implementing it.
What Is Digital Transformation?
Digital transformation is a holistic approach, but the specifics could vary from business to business. However, the core idea remains the same:
Digital transformation is the process of integrating technology into all areas of a business to fundamentally change how it operates and offers value to clients and customers.
Unlike a more specific task, like going paperless, digital transformation is an ongoing journey. Technology doesn’t stop evolving and improving, and a business needs to keep up once it’s committed to the process.
Types of Digital Transformation
As mentioned, digital transformation can look different for each business, depending on what sector it’s in. The specific needs of every enterprise affect its approach to transformation, leading to many subcategories. There are four major branches of digital transformation:
Process Transformation
This process is usually listed first, as it’s the most critical. This version aims to simplify and streamline internal business practices by reducing inefficiencies, cutting costs, and making everything run faster. A more efficient business can also adapt to changing markets and external pressures. Essentially, process transformation helps get things done faster.
This sounds ideal, but there’s a lot to consider when implementing process transformation. To automate workflows and implement IT systems, a business needs a thorough knowledge of management systems, internal structures, and the potential impact on clients and customers. Often, an external partner with years of experience in that area can make everything that much easier.
Business Model Transformation
Digitizing a business can also involve fundamentally changing the way it runs. Some enterprises change their entire business model to adapt to changing market trends. For instance, products once only available to be ordered in person or over the phone may now be available to be ordered online.
A business may identify a new area for growth or opportunity and embark on changing its structure, implementing new systems, and hiring more specialists to meet the need. Migrating services to the cloud to enable increased remote working capacity is an example of business model transformation. The challenge arises when deciding what to act on, to determine when an opportunity is a new industry standard or just a short-lived fad.
Domain Transformation
As the market shifts, so too does the need to capitalize on new areas of business. A company that starts with one product may want to venture into offering services related to that product as the demand grows. This is domain transformation: expanding spheres of operation.
White-label software, in which a company develops programs that others can use, is an example of this transformation. This process is very in touch with changing technologies that might provide new areas for business growth, such as cloud computing or streaming services.
Cultural and Organization Transformation
Together with the shifts in technology and infrastructure needs comes a fundamental change in attitudes and mindsets. This is what cultural and organizational transformation is all about. Not only do employees and clients need to be on board with the transformation process, but they need to be kept informed, trained, and up-to-date with how the technology fits into an ever-evolving world.
With the introduction of new technology often comes a related cultural and organizational shift. Therefore, businesses must be ready to change their structures and team configurations – not to mention their long-established ways of getting things done – in order to meet the challenges of a rapidly changing world. This area of digital transformation is vital for ensuring long-form success, employee well-being, and cultural relevancy.
Implementing a Solid Strategy
The approach to digital transformation depends on your business, its goals, and its current scope of operations. Connecting with an expert and their resources can be helpful in understanding these key aspects and providing a solid way forward. While every approach will differ, here’s a rough guideline on how a transformation strategy might go:
- Goals for transformation – Decide why you want to transform with the best evidence and research on hand. Examining strategic goals and viable opportunities is essential.
- Prepare for the culture shift – It’s then time to get all employees and management on board and accustomed to the idea of change. Resistance could mean imperfect implementation and long-term failure.
- Identify areas for change – What technology is out of date? What can be brought onto the cloud? What processes can be successfully automated? Identifying a roadmap for change in advance makes the journey that much smoother.
- Ask the experts – If you’ve got a digital transformation specialist on hand, ask for experience they’ve had with the process. Questions about scalability, industry suitability, and long-term success are important to ask as well. Don’t be afraid to seek assistance from software implementation experts, either.
- Gradual implementation – It’s a good idea to start small, with one area of the business, rather than broad technological changes. This makes the adjustment period more plateable and provides a useful case study for overall efficacy.
- Gather feedback constantly – At all stages of the transformation process, it’s worthwhile keeping an ear to the ground. Gather feedback from employees and clients, gauging whether modular changes are matching up to your KPIs. The journey might be rough to begin with, but listening to stakeholders as the system is rolled out goes a long way
- Broader implementation – As modular changes are shown to be successful, the lessons can then be implemented on a larger scale. It’s good to celebrate wins and identify the next waypoint for potential change.
It’s also good to remember that digital transformation isn’t always a linear progression, and some steps may need to be repeated. It’s a long-term journey with many possible forks and dead ends. The key is constant monitoring, expert advice, and keeping the goal in sight.
Finding the Right Transformation Partner
The digital transformation process isn’t something to be undertaken lightly or quickly. It’s a long-term journey that never really ends because the market and technology never stay still for long. Therefore, it’s key to have a partner who lives and breathes digital transformation to help. If you’re in Philadelphia, Eastern Pennsylvania, New Jersey, or Delaware, KDI Technology is that expert.
We’ve been bringing business and technology together for years and are more than willing and capable of helping you future-proof your business. Contact us today.