These days, it seems like everyone is talking about digital transformation. This is to be expected since the world is becoming increasingly technology-oriented and technology itself is advancing at an extremely rapid pace. In fact, it has now become imperative for business of all kinds to invest in digital transformation.
What is Digital Transformation?
The fact is that while business leaders are told about the importance of digital transformation, it is still not clear as to what it actually means. Since digital transformation is not the same for every organization, it can be difficult to determine an accurate description.
However, in simple terms, digital transformation can be defined as the transformation of an organization through the integration and implementation of digital technology as core business. Such an implementation results in profound changes to the fundamentals of the logistics, interactions, and processes of the organization. This, in turn, affects the value that the organization delivers to its customers, generally under a very different cost model. At the same time, digital transformation also brings about a cultural change within the organization forcing it to continuously experiment and challenge the norm.
How Do You Do It?
Like any major organizational change, the first step in digital transformation of your company is to formulate a strategy. However, the strategy will not be enough if you do not put enough emphasis on the actual execution. Here are the main steps that you need to take to execute digital transformation successfully.
- Identify the objectives of your digital transformation
- Study and examine the technology enablers available in the market.
- Understand and determine the technological combinations to achieve a future-proof platform.
- Learn the ‘how’ behind the digital technologies chosen.
- Leverage the technologies and future platform for innovative purposes.
- Execute the plan to take the organization onto the future platform.
How to Measure the Success?
Of course, you cannot just leave your digital transformation efforts as they are after implementation: this is not a set and forget exercise. It is essential to remain focused on the outcomes from these efforts and determine the level of success achieved. However, that leads to some confusion as there are no traditional methods by which this success can be clearly attributed to which component of digital transformation.
Some are content to simply monitor their digital presence and its acceptability to their audience. Others believe that success lies on being measured against the competition. There are also those who consider that digital transformation success occurs when maximum ROI is gained in the shortest possible time.
Rather, the answer lies in a combination of metrics. However, while metrics can help, they must be pre-defined first as to relevance and importance. In the case of digital transformation, digital KPIs must be defined, extracted, and analyzed. Costs, revenue and even customer satisfaction (sentiment analysis) are traditional KPIs, but organizations need to move beyond those basics. Some of the newer KPIs often used include the brand value in the market, the reach, the percentage of revenue generated overall through digital channels and many more. All of these KPIs must be considered for a clearer picture of the benefits from digital transformation. However, many organisations know that it is essential that they undertake digital transformation but do so in the absence of any measurable ROI: they just know that if they don’t do it they won’t survive!
Digital transformation is not simply about increasing your online presence or using new technologies. It is much more complex. It involves having a proper understanding of your audience and creating a plan with the right objectives. It is about improving all the interactive experiences that your audiences have with your organization while leveraging the right technologies. And it is about a change in culture and process within your organisation. For most organizations this is not core business, which often requires that you work with a solution partner who has undertaken digital transformation a number of times before. You need to put in the effort before you can hope to get the most out of it.