Last editedMay 20233 min read
Digital transformation is already influencing all aspects of business operations from research and development to customer relationship management. At a minimum, businesses need to keep pace with digital transformation or risk becoming irrelevant. Businesses that actively embrace it will reap the benefits of digital transformation in the shortest time.
What is digital transformation?
Digital transformation is the process of leveraging digital technologies to transform the way a business operates. Since the development of new technologies is an ongoing process, digital transformation is also an ongoing process. This has three key implications.
Firstly, businesses need to understand the basic concepts of digital transformation. Secondly, businesses need to have a digital transformation strategy. Thirdly, businesses need to keep themselves informed of developments in technology and think about how they could leverage them.
Businesses that do this effectively can turn digital transformation into a real competitive advantage with multiple benefits.
Concepts of digital transformation
The process of digital transformation is underpinned by five key concepts. These apply regardless of the state of the technology landscape.
Agility - Modern businesses have to move with the times and those times move quickly. This means that businesses have to adopt agile practices.
Innovation - Innovation has always been a competitive advantage. In the modern world, the pace of change makes its importance even greater.
Data-driven - Now, even small businesses can mine vast quantities of data for business insights. Making the most of these is essential.
Collaboration - Businesses need to abandon silos and work together as holistic wholes. This does not necessarily mean that everybody has to be on-site together. It just means that everybody has to pull together.
Continuous learning - The fact that change is continuous means that businesses need to learn from it continuously.
All of these concepts are applied with a focus on the customer and, by extension, on cybersecurity.
Creating your digital transformation strategy
Unlike the underlying concepts of digital transformation, a business’ digital transformation strategy may change over time. In fact, it’s very likely that it will. This is because a business’ digital transformation strategy needs to reflect its goals. As each goal is achieved, it will be replaced by another. This may require a different digital transformation strategy.
With that said, there are three points you should always consider when creating a digital transformation strategy. They are as follows.
Leadership and governance - Leadership sets a path. Governance ensures that those who follow it do so in an orderly manner. This is particularly important during times of change.
Culture - Your digital transformation strategy must reflect your values and beliefs as a business. For example, it must accurately reflect your specific tolerance for risk.
Human and technical resources - Likewise, your digital transformation strategy needs to reflect the resources available to you (i.e. reasonably within your budget). It should also recognise that your human resources can be at least as important as your technical ones.
Three main benefits of digital transformation
The benefits of digital transformation often extend into all areas of a business. They can also be as individual as each business. With that said, there are three main benefits of digital transformation that are highly relevant to most, if not all, businesses.
More effective decision making
Digital transformation can enhance decision-making processes by leveraging digital technologies to collect and analyse vast amounts of data from various sources.
Real-time data analysis and predictive analytics tools enable decision-makers to respond quickly to changing market conditions and customer needs, while automated decision-making systems can process data quickly and efficiently to generate recommendations or take actions based on predefined rules.
Data visualisation can transform complex data into easily understandable visuals and collaboration tools can facilitate knowledge-sharing among decision-makers.
Better operational efficiency
Digital transformation can improve operational efficiency by automating business processes, optimising supply chain operations and enabling a more agile workforce.
Tools such as robotic process automation, IoT and machine learning algorithms can automate routine tasks, predict maintenance needs and optimise inventory management, reducing costs and increasing productivity.
Cloud-based collaboration platforms and mobile applications can enable a more agile and flexible workforce, while data analytics can identify inefficiencies and bottlenecks to inform data-driven decision-making.
By making business operations more efficient, digital transformation also helps to lower costs without compromising on the customer experience.
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