In the initial phase, digital transformation got quick attention and businesses gave it all they had. But according to a Mckinsey report around 70% of companies failed miserably at digital transformation. Later when the pandemic showed up - buying personas, customer intent, and trends updated swiftly.
Digital transformation is the means of uniting the present state of your business to the future. But how can a business achieve that without a strategy in place? After all, it's a strategic imperative that has the power to transform your business, create new opportunities and drive growth. And let’s be clear - it is going to take a genuine effort to reinvent and rethink the way you do business.
So far we have known that digital transformation creates new or modifies existing business processes, cultures, and customer experiences to meet changing business demands. However, it's not just about technology. It's about the complete transformation of an organization from the ground up. This requires a long-term approach to change management, strategy, and planning — and an ability to move fast when you need to.
On a lighter note - 2024 has been an interesting year as digital transformation is still the top business plan. Various industries like banking, healthcare, retail, etc are actively navigating through the change. So let’s dive deeper into the nitty gritty of digital transformation strategy -
What is a digital transformation strategy?
Successful Digital transformation needs a strong strategy. It will start with answering the most basic questions of what, why, how, and when. According to Prof. Michael Wade, there are three core capabilities for digital transformation strategy for organizations to stay intact while navigating the digital disruption-
- Hyper-awareness
- Informed decision-making
- Fast execution
Digital transformation strategy is an overview of steps to leverage business exponentially. By taking these steps, you can understand the current state of your business and the pace at which you will strengthen technological advancements.
Let’s understand more about creating the framework for this DX strategy-
How To Create A Digital Transformation Framework?
When you start making your framework, you will need to align your business objectives, business strategies, and IT strategies. That means creating the foundation for your digital transformation begins with your business goals and priorities.
Next, once you make a plan and roll out these digital transformation strategies, it impacts the employees. Tracking the change and enhancing overall productivity and efficiency becomes crucial to successful digital transformation.
By taking baby steps with the right intention and following the strategy, you can open pandora’s box of future possibilities. After all, digital transformation is more like a journey rather than just some destination.
Now that you know digital transformation isn't just about technology placement, it starts with creating a proper business strategy. Lastly, map out a tech strategy based on your business objectives. Listed below are technologies that are in demand and you will most likely need -
- AI/ML
- Cloud
- Robotics
- NLP
- IoT and Mobile
- AR/VR
You can determine the existing stage of your digital transformation plan by mapping out the complete process and pivoting accordingly. The idea is to start now as you cannot wait and do nothing about the ongoing shift!
The actual cost of doing nothing
The actual cost of doing nothing is costlier than you think. Imagine now that we see mobiles everywhere, so much so that physical currency is disappearing. So, is it possible to not digitally transform?
By the way, the recession today is compelling organizations to cut costs and thrive. Many companies have been forced to reexamine their business models and operations due to the current economic downturn. The result has been an increase in efficiency and cost savings through digital transformation.
The truth is tasks like data entry, customer service inquiries, and social media updates are often redundant and menial. By automating such tasks, companies free up employee time for better value-adding tasks.
Adding up to that, real-time data and analytics give executives and managers insight into making better decisions. It can answer all their questions such as response to market changes and allocation of resources promptly.
As a brand, you want to be where your customers are. But is it possible to be there for them 24/7? Yes, it is. With interactive chatbots, virtual assistants, and augmented reality, customers have a delightful experience engaging with your brand. By investing in the right kind of technology, you build loyalty and customer engagement even in economically tough times.
Bottom line - Digital transformation has many benefits and businesses cannot afford inactivity regarding it. The ultimate choice is - to innovate your business or cease to exist.
Different sectors, Different DX strategies
Digital Transformation is a process of change and progress, where the entire organization moves from one state to another. As per the data collected from various digitally transforming companies, the sectors which are most affected by this change are as follows:
1. Education Sector
Online education is one of the main categories of Internet services on analysts' radars. Compared to other businesses, the education industry focuses on the acceleration and facilitation of the learning process, and not on increasing conversions.
The future of education lies in digital learning, despite the challenges digital transformation brings. May it be learning, hiring, examination or training, it needs change to become more effective in its job functions.
2. BFSI Sector
BFSI (Banking, Financial Services, and Insurance) has immense benefits in digital transformation. For example, a bank with the necessary tech gives its customer a secure and compliant experience. An insurance company backed by tech cuts down the hassle for the policyholder and gives agent satisfaction.
27% of banks have only launched a digital transformation strategy in 2021, dipping their toes in the digital water. The customer is changing, the next generation is taking over and digital is at their fingertips.
Using technology helps these institutions transform products, attract customers, empower employees and optimize their operations.
3. Healthcare Sector
Delloite spoke with the chief digital officer of a large regional health system about patient journeys and digital tools and this is what he said -
“A patient’s journey is not just in the hospital. There is a “before” and an “after” (or a “not at all”) and what we need to do is be able to stitch that together, making sure we are caring and understanding the context and then where we can leverage those digital tools to be there for them.”
Digital transformation in the healthcare sector is more than just transferring paper processes to a digital environment. It means efficiency in getting the needed care with technology. Many healthcare providers also rethink the future of digital adoption and mitigate challenges that their users face on daily basis.
Their consumers want to connect quickly and conveniently with their preferred provider and thus digital transformation can not only help strengthen consumer relationships but also improve operational and financial efficiency. They also can help health systems implement long-term strategies.
4. Retail Sector
There is no future for retail without digital transformation. Why is that?
In the past couple of years, there has been immense growth in sales for online marketplaces rather than offline stores. Buyers have indeed changed and so the retailers are and should be the first ones to cut through the tech revolution.
Below is an image by Mckinsey & Co. outlining ABCs of Next-gen retail tech. In addition to having the right product on your shelf and delivering it in a timely manner, you can also create trust-building relationships with your customers.
Image source - Mckinsey & Co.
5. Pharma Sector
The pharmaceutical industry has some core frameworks such as drug development, patient care & transparency, and cost-effective production.
Digital transformation gives these industries the ability to reach a high customer base regardless of the production regulations such as GMP. Using technology like IoT, analytics, and genomics, the pharma industry can experience a new dawn of medicine - precision medicine. Patient care that is individualized based on their diagnosis makes patient care more efficient and effective.
Pharmacies and pharmacy employees must be familiar with regulations to helm different systems implemented in compliance with the law. Using digital adoption platforms can help in knowledge building and eventually higher productivity.
7 Actionable digital transformation strategies
1. Communicate with a clear vision
Digital transformation will be challenging for your business, and without people, what is a business? Employees should feel heard and leadership should tackle the anxiety around change really well. Communication is essential as you align your IT strategy with your business strategy. Employees need to be on the same page as the leadership.
For example, let’s take PepsiCo. It’s a huge organization with around 300,000 employees globally and they found it challenging to connect their different business units from around the world. So what did they do?
PepsiCo created a mobile-friendly intranet that's customizable. Using LiveTiles' 'drag-and-drop' feature, they communicated what matters to their people. Right from industry news to company discussions, the platform was promptly integrated with existing business applications such as SalesForce, DropBox, Google Drive, and social media channels.
That’s how they used technology to communicate and have a great business flow.
2. Master the collaboration
While tackling massive organizational change, your strongest ally is multi-stakeholder collaboration. For SMEs in particular, when looking to approach digital transformation with communication and learning, focus on collaboration and decentralization.
The top management of a company should openly support but not actively participate in the project as a way to foster adoption on operations levels.
In line with the previous point, your strategy should have a comprehensive communication plan that conveys a collaborative strategy and emphasizes possible benefits for each stakeholder.
3. Invest in your people
The first thing that you need to do is invest in the people who work for your company. Digital transformation is not just about technology; it's about people and culture. You need to give employees new tools and training so that they can use them effectively.
Employers need to understand that no matter how good your technology is, if it's not being used by the right people, then it won't be successful. Employees should be given opportunities to learn new skills and develop their career paths.
The key to a successful digital transformation strategy is to make sure that everyone involved understands the end goal of the project. This means that every employee should know what their specific role is within the organization and how it fits into the bigger picture of what's being done.
4. Leverage the power of cloud adoption
It’s exciting to see companies that have adopted cloud platforms launch new products and services in the market at a 20 to 40 percent faster rate. The cloud generates the majority of its value by enabling businesses to be flexible, innovative, and resilient. Invest in cloud platforms that increase revenues and improve margins in business domains.
Cloud adoption is a crucial step in the process of digital transformation. And the purpose of taking this step is to digitize the data. A business can revamp its service offerings, databases, and more using platforms that offer powerfully built infrastructure.
Source- Mckinsey & Co.
5. Become data-driven with analytics
A study conducted by Accenture in 2019 found that tech leaders experienced twice as much revenue growth as lazybones in this sector. When Forbes did a follow-up study in 2021, they found that 10 percent of companies enhanced their investments and rocketed their revenues at five times the speed of lazybones. What do you think changed?
The answer is a data-driven approach. Digital transformation strategy through a data-driven approach gets business leaders to embed technology across their business and drive fundamental changes, taking their business operations to the next level.
6. Embrace intelligent automation
Intelligent Automation (IA) combines artificial intelligence (AI), machine learning (ML), and natural language processing (NLP) with robotic process automation (RPA) to automate complex end-to-end business processes and workflows.
Intelligent Automation is one of the most vital tool-set in Digital Transformation. It doesn't matter how good your new applications are or how well your integrations work, there will always be manual work in the applications, so the digital workforce will remain important.
It is always about combining different skills, people and tools. So, we are coming back to the culture of collaboration and thinking of it from the organization's perspective.
With IA, complex processes that are hard to automate with traditional RPA technologies can be automated by adding intelligent capabilities including decision-making, exception handling, and other complex processes.
7. Utilize DAP for smooth digital transformation
Digital Adoption Platforms or DAPs as we call them - lead the way for your customers and employees to be better digitally. Let’s understand this statement in more detail!
A good example would be Gyde. It is a digital adoption software that will help you with in-app guidance. When in the transition of a digital transformation, Gyde supports it with training videos, contextual support, and instructional walkthroughs.
In this way, your prospects can use the newly run software effectively and contribute to the betterment of the digital transformation process.
To Sum Up,
Every business is digitally evolving. Companies recognize that digital matters because it gives enterprises a competitive advantage. Successfully implementing digital transformation can help your company thrive for years to come.
To achieve digital transformation, may it be any sector, businesses should have a strategy. Invest in the right tools, people, and processes to confidently pursue digital transformation.
Are you looking to harness the power of digital transformation with a digital adoption platform? Connect with one of our digital adoption experts to see how we can help you better!
FAQs
- What are the four components of any business that wants to digitally transform?
- Business model: What are your business goals? What problems do you want to solve? How can your current business model help?
- Technology: Who are your customers? What do they need? And how do they communicate with each other? What technologies do you need to adopt and integrate into your existing processes?
- People: How is your team divided between internal and external functions? Who owns product ownership and who owns technology ownership for each project or initiative (and how do you ensure accountability)?
- Governance: Who controls strategy execution — and how does that influence decisions?
2. What is a strategic approach for cloud-enabled digital transformation?
First, select a suitable technology with a cloud enablement partner by focusing on your needs. Next, understand your data systems and requirements. For this, you can run an audit and build a new database as well. When taking a strategic approach, realign your operations and resource to have a customer-centric demeanor. Lastly, handle this change management with IT representatives and employees. Take steps to work on mindsets to accept the change.
3. What are digital transformation examples?
- In the banking arena, Capital One acquired digitally-focused ING direct. They launched a plan to change itself into a digital innovation leader. They truly revolutionized banking with a tech staff of around 11,000 and 500 AI patents.
- Atria Senior Living in Kentucky built a CRM for prospect management. It had all features necessary to track prospects on their website. They identified the prospects interacting with their website and successfully integrated features like chatbots, action-oriented tips for sales, and much more
4. What are the key trends in digital transformation in 2024?
- IoT devices are becoming affordable and easier to use. Data communication is available for every size of business and that is helping businesses connect well with their data.
- 5G will be the next big thing for the speed of data connectivity. It will be a great mobilizer for digital transformation.
- CDPs(Customer Data Platforms) are already combining and utilizing data from multiple tools to create a single-top value proposition.
5. What are the benefits of digital transformation?
- Enhances Customer experience exponentially
- Encourages collaboration and increases employee productivity
- Gives agility and innovation to business process
- Updates skillsets & knowledge instantly
- Thrives a digital community