Is there a more wishy-washy term than ‘digital transformation’? Probably, but it’s definitely up there with the other vague business concepts like ‘streamlining efficiency’ and ‘blue sky thinking’.
One of the reasons for this is that digital transformation can mean lots of different things to different businesses. No two digital transformation projects will be the same, but when executed well, they all have the potential to move your business forward.
Here we take a look at the surprisingly simple meaning of digital transformation, what it could mean for your business’ future prospects, and how to make yours an operational and financial success.
What is a digital transformation?
When you think of a digital transformation, you probably think about upgrading to new technology and leaving paper-based filing systems behind, moving to the cloud, and while there may be a need for all that, making changes for the sake of ‘modernising’ should not be the main motivation behind the project.
A digital transformation is a project that not only integrates digital technology into key areas of your organisation, making fundamental changes to your operation, enabling experimentation and evolution, increasing the value and quality of the service you offer customers, and possibly giving you a competitive advantage.
In addition to practical and strategic changes, a digital transformation requires a cultural change in the organisation as they need to continue to challenge the status quo, walk away from ‘the way it’s always been done’, experiment, and bounce back from failure.
So, it makes sense that digital transformation will look different for every organization.
What might a digital transformation project involve?
A successful digital transformation should overcome at least one of these challenges:
- Increase productivity while reducing labour costs
- Improve the customer experience
- Increase sales/profits
- Make you more competitive in your industry.
If you delay or avoid digital transformation, remember that your competitors are unlikely to be doing the same, and you run the risk of being left behind.
A digital transformation might include:
- Creating a hybrid infrastructure of on-site data and private and public computing.
- Designing an agile, productive, and collaborative digital workspace.
- Protecting your business against cyber-attacks and other cybersecurity risks.
- Developing a deeper understanding of data, ensuring intelligence is integrated into infrastructure and operations.
Why do digital transformations fail?
According to an article called Digital Transformation is Not About Technology on the Harvard Business Review, a recent survey found that 70% of all digital transformations do not achieve their objectives.
How, then, can businesses increase their chances of a successful digital transformation?
Decide on your strategy before buying anything
Lots of leaders will choose a tool or area to focus on, e.g., we need a machine learning strategy, but a digital transformation does not take place simply because you embrace a new system or technology. In most cases, a digital transformation will require multiple technologies and new processes that complement each other to deliver on an objective like improved efficiency. This is why it is vital to take time to research and plan a multipronged approach before committing to any purchases.
Consult with your staff about what’s needed
A common approach to digital transformation is to hire an external company or consultant to plan or support their project. This can be helpful, but it misses a key component – your employees. Who has more insight into what would make internal processes more efficient than the people who are working with them every day? Your staff are closer to the problems and bottlenecks than any outsider could be, so be sure to include them in your strategy from the beginning.
Find out what customers want
If one of your goals is to improve the customer experience, it is vital that you do not assume what your customers’ priorities and needs are. Consider sending out customers surveys or, even better, conducting customer focus groups to discover your strengths and weaknesses. You might just be surprised by what your find out.
Communicate your plans
The people in your organisation will be key to the success or failure of your digital transformation, which is why regular and timely communication, transparency, and inviting input from your employees should be high on your list. Don’t just make a change – tell people ahead of time what you will be changing and why, how it will affect your employees, and what you hope to achieve through the change.
Listen to your employee concerns – and understand their fears
Some, if not all, of your employees may perceive digital transformation as a threat to their jobs. This can cause them to consciously or unconsciously resist change, in the hope that if the digital transformation fails to bring positive results, it will be abandoned and their jobs will be safe. Leaders need to be sensitive to this, and focus on transforming the mindset of their employees and the culture of the organisation.
Make it clear that the digital transformation will help your employees to upgrade the skills and gain expertise that will prepare them for a long and successful career, whether that’s in your organisation or elsewhere.
Identify Key Performance Indicators
How will you measure success? You probably have KPIs in place for your business already, but you are changing the way you operate, so you will almost certainly need to set new KPIs to track what impact (positive or negative) your digital transformation has had.
Your digital transformation is going to cost money, but if done well, you should see a return on that investment. Keep a close eye on your KPIs and have systems in place to track progress and ROI so you can continue to evolve.
Funding options for your digital transformation
Is your digital transformation well overdue? Now is the time to prepare your business for 2022 and beyond by investing in the technology and infrastructure that will keep you competitive, improve your productivity, enhance customer service, and boost profitability.
With a bespoke finance solution from Bluestone Leasing, you could fund your digital transformation, keeping cash in the business, and potentially unlock significant tax benefits at the same time.
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