Digital Transformation: What is the Role in Business Model?

The Digital revolution has been one of the most significant innovations that have changed how businesses are perceived and performed. Every business emphasizes upgrading its working models to adapt to the new reality.

But do you know what drives this swift change?

The business is not driving this change, but the customer has taken control.

Though customers were always the center point for every business, what has changed now?

Today, customers are focused and more aware of what they need and at what time, and they are well-versed in finding affordable solutions to get what they want. Thus, shifting from conventional methods has become more critical for small-scale businesses and existing tycoons in the market.

Businesses have adopted digital tools and techniques to provide better customer service and retain loyal customers.

This digitization has made the market a massive ground of competition but a healthy one. Everyone competes with rules and does everything legal to prove their worth.

So, before your business gets outdated or suffers financially within this high-end competitive market, you need to transform it digitally.

What exactly is Digital Transformation?

Digital transformation is a process that results in digitally strong enterprises that leverage technological power to evolve themselves. Companies evolve continuously in all business aspects, from offering and interaction to operation. 

It leads to the fundamental change that has become the need to survive in the market. 

With every technology change, embrace it, and adapt accordingly. Today, digital transformation is not about enterprises choosing to transform; it is more about how they transform themselves. 

Digital transformation is about business evolution by experimenting with new tools and technologies and rework on current strategies to eliminate issues. It is a continuous process that must carry on with the technology change. 

Each company has its way of implementing digital transformation and thus has different approaches and results. But if we consider enterprises, they focus on finding innovative ways to provide an exceptional user experience. It will add significant value to your business and helps you deliver a top-notch user experience. 

Leveraging technologies like cloud, AI, and mobile phones, you can connect to your customers in real-time and have more impact. Several factors affect the adoption of digital transformation, and one major is customer interaction and satisfaction. 

If your business evolves with time, you must have highly engaged customers. 

You can see that there has been an increase in the adoption of digital transformation in the last two years. Due to its immense benefits, digital transformation has become the top priority for every business and is expected to grow in the coming years.

The above chart thoroughly explains the increase in digital spending. Companies have a dedicated budget to implement digital transformation strategies.

The transformation was slow, then the pandemic happened, and business operations changed and took an accelerated path.

The actual growth in digital transformation has been seen after the pandemic. It has fast-forwarded digitization by pushing companies over the technology tipping point, which has positively changed global business.

What Does Digital Transformation Bring to the Business?

Digital transformation has been adding value to the industry and society. You cannot imagine the benefits it brings to every business’s table. It might be possible that it benefits different businesses differently.

Looking at the list of benefits, you can ensure higher revenues with some effort.

• Improves employees productivity

Improving productivity is a crucial factor for any business to evolve. With the increased remote working, the digital transformation ensures that remotely logged-in employees are as productive as those working from the office. The manual workload is eliminated with different automation tools, improving productivity and leading to more creative ideas.

• Better customer service

Digital transformation is customer-centric. The business tries to use tools and technologies that help them create better connections with their customers and provide them with what they expect. All the changes are done keeping the customer’s needs in mind. 

Digital transformation has helped businesses create more agile delivery processes and increased time-to-market while maintaining efficiency in operations.

• Reducing security risks

Security is one of the top aspects for businesses and stakeholders. The adoption of several technologies opens gates to many security risks. But at the same time, digital transformation is helping businesses to reduce security risks using different tools and technologies.

With increased automation, you can implement automating monitoring process to find potential vulnerabilities, go through companies risk profile to understand the cope, upskill your security teams, and make robust security strategies. 

• Informed decision-making

You can apply data and analytics to empower the workforce to get better results. You can apply data and analytics to empower the workforce to get better results. Including the latest tools and technologies within your organization will help you get better insights into your business and customers. It enables agility and real-time services to provide better UX to customers. 

• Improves business relations

A single enterprise cannot have everything at its disposal. They need to rely on other companies to get better services. This is how businesses stand in this high-end competitive market. 

As a result, companies have to work with different suppliers, distributors, and specialized consultants to create unique products to satisfy different customers’ needs.

Earlier, this communication among different businesses was document-based, creating chaos. But digital transformation helps businesses to streamline their communication and organize their operations efficiently. 

Digital Transformation Strategies:

Strategies specify an outline for the steps taken to leverage the latest technologies. Perfect strategy can bring success to your business. These steps may vary from business to company, or their way of implementation may also vary. 

A strategy will help businesses achieve their goals and address challenges ahead of their success. Still, most companies do not understand the clear picture of digital transformation strategies, which is a major failing factor. 

We will help you to draw a DT strategy outline. Let’s see what it includes.

• Understanding the “why”

Digital transformation has a different meaning for different businesses. You need to understand your business goals and requirements to leverage the benefits of your DT strategy.

So, let’s start with a few years’ business plan. This will give you a kickstart and implement that strategy. To successfully execute the digital transformation strategy, you must understand what it is and how it can bring value to your business. So, let’s start with a few years’ business plan. This will give you a kickstart and implement that strategy. 

• Get ready for cultural change.

Create awareness about the change among employees and make them understand the need for digital transformation strategies. With DT, it is obvious you can see the changes in your organization at each level, especially for employees who oppose the change. As per the survey, most of the DT process fails due to resistance from employees.

DT helps businesses to identify projects that improve the productivity and effectiveness of employees. So, you must prepare them for the cultural changes which will impact them significantly. It will affect the efficiency and the way of working of the organization.

• Make small and strategic changes

Any business cannot transform in a single leap. Digital transformation is a continuous process, and identifying the first step is critical. It is a transformation that is a lengthy process, and making small changes will help you succeed. 

Any business should not expect instant and quick results. You need to be focused on your goals and take actionable steps to achieve them.

• Implement the right technology

If you start with the right strategy, everything will fall into the right place. The right strategy will help you choose the right technology to achieve your business goals. Some standard technologies that drive digital transformation are- cloud, Big data analytics, IoT, ML, AI, Mobile, and others.

These technologies will streamline your business workflow, automating crucial tasks and reducing manual efforts and human error, resulting in high-end results.

• Choose your technological partner and expertise

When choosing your technological partner or seeking external advice, you must have a future picture in mind. You must ensure that your technology partner can do the following.

> Help scale your business with the latest technology.

> Both must have a similar vision and scope for digital transformation.

> They must provide long-term support to your business.

> They must be able to integrate well with your existing technology.

>They must be skilled in the specific technology you choose.

• Gather feedback and refine the process

Now that you have everything in hand, put your strategy to work. Analyze the results and gather feedback from your stakeholders and customers to understand your progress. If the results are not up to your expectations, then it is time to refine your process and develop another strategy to help you reach your goals.

You must try to learn from your experiences and create documents that will help you find potential alternatives to great success.

• Scale and transform

Now scale with the power of implemented strategies and technologies. You might not succeed at the first step, so you must keep the process going until you reach your goals.

Barriers to Digital Transformation

With proper management of DT strategies, many companies have benefited from digital transformation. 

But, there are some barriers to successfully implementing digital transformation strategies. You must consider those barriers and try to eliminate them before you start.

Below are significant challenges that have failed many projects or created barriers to transformation.

• The biggest challenge is the cultural and behavioural changes that come with the DT. Some employees oppose new changes and do not get along. 

• There is a need for Agile transformation within every business that gradually changes the company’s form, creating a more flexible, fast-changing, and self-organizing environment. But for this, each employee must have the same mindset to embrace self-organization and collaboration.
• Some leaders do not understand the latest technological trends and cannot find the correct solution to implement and adopt them within the business.
• Implementing digital change is not a simple task. It requires skilled IT professionals with solid knowledge of the technology you want to include. Most transformation fails due to this lack of skills.
• Adopting new technologies might require new infrastructure. However, some companies try to make it compatible with the existing infra, making it crucial to run the process as expected.

As the business scale with DT, complexity comes in handy as you need to manage and include new systems. But with platformization, you can handle such chaos as it helps software engineers to use alternative technology rather than creating a new one. Such technologies that can provide platformization are Docker, containers, and others.

• You need more funding to include new technology in your business processes, such as an IT team, infrastructure, and employee awareness. If your company does not have enough budget, you might fail.

It is estimated that By 2023, global spending on technologies allowing digital transformation will amount to $2.3 trillion (IDC, 2020).

• Sometimes seniors do not feel the need to welcome digital transformation due to fear of substantial cultural change within the company that can impact their decision-making.

But with technologies like intelligent automation, you can leverage AI, ML, and robotics to scale and streamline your decision-making process. These technologies will help to simplify the process and improve operational efficiency.

Digital Transformation Best Practices

As the demands of customers are consistently rising, there has been significant pressure on companies to do better to fulfil their needs. Thus, companies are transforming digitally, leveraging the latest tools and technologies.

But, most businesses seem to fail despite having a set strategy, as they do not follow the best practices. DT is a detailed process that involves several aspects that must be taken care of. 

As per McKinsey, 

• Less than 30 percent of DT initiatives are successful. 
• Companies have to implement more technologies to succeed. 
• The chances of succeeding in the DT strategy will rise if you have a clear strategy. 

As suggested by Gartner, you must include the following six elements in your digital transformation best practices framework.

• Assign a digital business center of excellence (COE).
• Develop required digital business skills.
• Create the right mindset across the business.
• Keep influential leaders in charge.
• Create a digital transformation strategy to acquire new opportunities.
• Generate new digital business capabilities.

Below are some best practices that you can use.

• Create an appropriate culture that embraces risk-taking decisions, testing, experimentation, etc.
• Set the business goals that you want to achieve using digital transformation.
• Focus on teamwork to work on your goals.
• Keep track of your failures and continue experimentation avoiding the earlier risks.
• Use customer data mining and telematics to gather customer insights and set your goals based on them.
• Go through the cost-benefit analysis to improve your investment decisions.
• Hire the right talent to implement the DT strategy. 

If you place the key factors in place, businesses will most likely be successful.

Conclusion:

We have heard the saying that “customer is the king”. It’s true.

Today, everything is transforming and evolving to provide a better experience to customers. Every business is competing to get the customer’s attention and to provide what they want, either they have to go through an entire transition.

Digital transformation has made that transition smoother. But it is not an easy process that brings success in a day. You must be consistent, create cultural value, create employee awareness, and upgrade talent. 

To leverage the benefits of digital transformation, you must prepare a strategy using the best practices to get guaranteed results. So, do not hold yourself back and try to find new innovative technologies that can help you grow and create an outstanding user experience.