Delicacies of establishing the groundwork for digital transformation
5/25/2022
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Delicacies of establishing the groundwork for digital transformation

The term "digital transformation" has many meanings across the business and technological spectrum. The concept of digital transformation began with the transition from analog to digital and has evolved to refer to social and mobile technologies and a slew of digital solutions. With so much emphasis on technology, businesses may lose sight of what matters the most: the actual change.

Most businesses understand the need for change. The key is to define precisely what this change entails for the company in question. Any company that wants to DX has almost always chosen their objectives from the usual suspects to describe their DX requirements for the last decade: customer experience, operational efficiency, employee productivity, and compliance, among others.

However, something new –perhaps fundamental – has occurred during this transformation: how businesses generate value has altered. Value production is increasingly coming from outside a company, rather than inside it, and from external partners rather than internal workers.

As a result, it is not enough to follow traditional business metrics. Organizations must change internally and externally if a company seeks a substantial transformative effect. The difficulty lies in successfully addressing every challenge head-on and overcoming it as efficiently as possible.

Establishing the groundwork for digital transformation

A clear strategy and a solid foundation are key to achieving DX objectives. This groundwork entails asking thoughtful questions and adhering to certain standards.

  • Analyze your organization to find its unique sides

The first step is to let go of the urge to compare yourself to others and their successes. Instead, concentrate on determining what makes your organization's context unique.

A company with a three-hundred-year history, for example, will have a very different set of leverage and obstacles than a fintech startup that was founded in the digital era. Even if your goal is revolutionary, it cannot be at odds with the context of your organization. Analyzing social media strategy and tactics regarding the types of people they appeal to can reveal that this may be a case where what appears to be a transformative approach may do more harm than good.

  • Define your digital transformation goals

Redefine the value chain and look at alternative business models beyond your business's current scope. A successful metamorphosis is multi-dimensional. This implies that the result will be a collection of several objectives that must be intelligently combined. The following are some instances to consider:

  • Next year, launch five new products driven by merchant partnerships, generating x% more revenue from digital channels.

  • Expand the number of mobile applications by y% and eliminate the need for contactless transactions at M locations with N self-service kiosks throughout the identified areas.

  • In six months, distributed, digital, omnichannel frontline and customer service across goods and services, as well as move from SLA-based metrics to customer satisfaction-driven ones.

Draw a roadmap

Understanding the overall objectives of a business is one thing; developing into an organization that can achieve them is another. Many businesses get caught in their transformation efforts because of the baggage and inertia from their years of operation.

Technical debt and legacy systems are difficult to overcome. However, having a clear vision of how the organization's future will look and function – structurally and technologically – can go a long way toward its success. It illuminates the gaps and hints at a solid road map for change.

A roadmap is a comprehensive document that shows what your company will look like in the future. It should explain how all elements of your business would change, including organization structure, responsibilities, people, processes, systems, and technologies. Identify the secret sauce from your previous history and incorporate it into the plan as an inherent strength. For example, for an insurance firm, this might be the worth of content gathered over decades of interactions and relationships with customers and the endless possibilities of utilizing that content to create new business opportunities through cross/up-sell.

  • Establish and implement platforms

Platforms define the digital era. The phrase "platform" has a different meaning than the conventional technology platform (although they are important).

A platform business creates value outside the company's boundaries and has a multiplier effect. A glance down the list of the top market capitalization companies today shows that most are platform businesses. They utilize resources - including consumers - to create income streams and transform how people live and work.

A technology platform is the first step toward a business model that takes advantage of the platform concept. A technology platform strategy is required. This is because an organization attempting to operate as a well-integrated entity for all external stakeholders in the ecosystem cannot afford internal silos, whether in the form of procedures, processes, systems, or people.

A digital transformation platform allows businesses to link their operations, systems, and people. Of course, there are several technological components involved in this process. Process automation, context-aware engagement, omnichannel communication, seamless mobile and social integration, and artificial intelligence/machine learning-driven intelligent automation are all necessary digital tools for establishing a boundary-less platform organization.

  • Agile as you go

The platform approach is a great way to get started with digital transformation. However, taking on a large-scale move is terrifying and dangerous. It's also worth noting that DX isn't simply a one-time occurrence; it's a journey. Speed and agility are two important aspects of the equation.

Identify early focus areas for quick wins. Early victories help build momentum and wider acceptance of the incoming changes within the organization. A technology platform that allows for rapid delivery of business applications (e.g., low code) can also be a tremendous enabler for speed. It allows the company to grow as it goes while still maintaining a long-term technological architecture.

Conclusion

These first steps go a long way in demonstrating the company's long-term competency. To be agile and future-ready, an organization relying on a sophisticated digital transformation platform prioritizes results and behaviors over technology's "how" aspect. And that is how you create an agile and future-ready business where digital transformation becomes second nature.