In the modern world, digital transformation refers to the process of using different kinds of technologies in business. The benefits of using new advanced technology lead to increased efficiency and great business agility.
For each and every organization there are different paths and the journey of each organization is different in the scenario of digital transformation. For example, certain companies may use cloud computing to enhance the customer experience, others may redesign its supply chain.
Digital transformation often requires a new mindset. It helps companies to ground up eventually, such as skilling up employees will help in launching new products faster. For the majority of companies, digital transformation requires a shift from traditional thinking to a new mindset that includes a collaborative approach.
Why is digital transformation important?
There are many reasons for the change in the mindset of the industries. Prior COVID-19 Pandemic, the main focus was on customer experience, now digital transformation is the centerpiece of efficiency and innovation across the organization.
According to the most recent survey conducted, accelerated digital transformation that includes data and cloud has become one of the top priorities of the CEO of companies. It has been shown that leading companies in enterprise technology are growing two times faster as compared to most of companies. They adopt different kinds of innovative technology and reinvest more. The benefits are such kind of companies get more revenue and more growth, which leads to the success of the companies in the future.
What are the Goals of Digital Transformation?
The main goal of the digital transformation is that it helps in serving in a better manner to its principal stakeholders, customers, employees, partners, and shareholders. It helps the companies in the following manner:
- Improved customer experience.
- Gaining more insight into individual customers to personalize products and services.
- Increase responsiveness to customer requests
- Increase employee productivity
- Increase speed to market with the new products and services.
What are the benefits of digital transformation?
In the digital age of today, the main benefit of digital transformation is that it leads to higher revenue and bigger profits. The main benefits are as follows:
- Innovation: It leads to innovation and updated technology and encourages experimentation which limits the risk.
- Agility: With the use of new technology and innovation and responsiveness to the changing markets it helps employees to support the ongoing change.
- Engagement: The digital transformation further leads to improved engagement with the employees and the business partners further helps in better processing of data, more accurate decisions, and anticipating the needs of different kinds of stakeholders.
- Efficiency: In the age of digital transformation, the implementation of certain kind of technologies such as AI and RPA boost the productivity of the workers, thereby reducing errors and encouraging speedy time, a revamped business process that are used for the pace of the business.
What are digital transformation challenges?
A 2020 Gartner report stated that only 40% of organizations have brought digital initiatives to scale.
The most common reasons for the failure of the digital transformation are as follows:
- Immature digital culture
- Budget constraints
- Legislative and regulatory changes
- Limited in house skills
- Data privacy and security concerns
- Lack of accountability
- Poor Cross-functional collaboration
- Inadequate management support
- Lack of employee management.
How to develop a digital transformation strategy?
In order to develop a digital transformation strategy in an organization it is important to know the strategic objectives of the business model. Each organization has its own vision of success but there are certain steps that any organization can take while developing a digital transformation strategic plan that is as follows:
- You need to create a digital transformation roadmap that offers moving the company to the heights of success.
- Developing such kind of vision, how the organization should look in the future and how the products and services should evolve in order to meet the needs and expectations of the customers.
- Identifying the existing and potential value proposition through external research and internal evaluation.
- Analyzing where the market is heading so that the organization can anticipate the potential
- Understanding the market and the organization’s place in it, linking it with the existing and potential customers.
There are different reasons why digital transformations are lagging, that includes poor leadership, disconnects between IT and the business, employee engagement, and different substandard operations.
Genpact CEO states that “ Boardrooms and C-Suites can talk about digital and there is pressure to show results, that create wrong expectations of what can be done and when”.
For many enterprises that build traditional goods, means building digital products such as e-commerce platforms and mobile applications that operate on the product based models.