Most major business transformations take place over an extended period of time, and the same is true for digital transformation. In the new digital era, constantly changing technologies empower new ways of approaching customers, more efficient business processes and more pervasive connections between people, devices, and data. But it’s all-too-easy to take an ad-hoc approach to digital transformation, piecing together individual process improvements bit by bit in the hopes that the value of the whole will exceed the sum of its parts. Digital transformation requires a planned, holistic framework that takes into account technology, processes, and people.
IDC predicted that by the end of 2017, two-thirds of the CEOs of Global 2000 companies would already have digital transformation at the center of their corporate strategy. Here are four key components of a successful digital transformation strategy to help you plan your approach.
1. Digital Transformation Is a Monetization Opportunity
A Forbes article predicts that by 2019, 40 percent of IT projects will create new digital services and revenue streams that monetize data, driving new funding models, the acceleration of industry disruption and business innovation, data becoming the new capital and rapid increase in worldwide demand for digital workers. Another study shows that the transformation does pay off, with 39 percent of companies saying their digital transformation efforts have helped them make strong progress in enabling real-time transactions; 32 percent saying it has helped them make strong progress in improving the efficiency of operations; and 28 percent saying it has helped them acquire new customers.
On the consumer side, more devices and more data are changing the way research is done and how buying takes place. Consumers have access to data anytime, anywhere, and they use it constantly. Business analytics taps into those buyer preferences and tells companies how to interact in a more personalized and effective way. And digital delivery of services and information makes customers more satisfied and more inclined to buy from you again. Digital transformation creates a cycle that accelerates as the transformation matures, benefitting both consumers and sellers.
2. Follow the Technology Trends
Many of the most interesting and exciting segments in technology today focus on leveraging the value and intelligence behind data. Big data acts as a foundation for many innovative trends, with more than 62 percent of companies now having at least one big data project underway. Big data is leveraged across the enterprise to glean insights into customer preferences, patterns that affect inventory and supply chains and strategies for hiring the right talent.
And now, machine learning is taking data to a new level by automating many tasks and processes that used to be the domain of human resources. Using artificial intelligence (AI) algorithms, intelligent automation is being used to more adequately predict needs in various business processes, including inventory, supply chain and manufacturing, and create a process with fewer errors and higher quality products. In fact, 92 percent of businesses now say that intelligent automation (the combined use of artificial intelligence and automation) will be put to wider use within their company during the next 12 months. In effect, machine learning takes out “the middleman” in analytical processes: pulling in data, analyzing it, applying AI algorithms to determine a course of action, and making the intelligent business process happen, all in one fell swoop.
3. Establish the Transformational Framework – and a Vision
Once you have the technology infrastructure in place, it’s important to build a process framework that works for your company. More than 85 percent of respondents in a NewVantage Partners report say that their firms have started programs to create data-driven cultures. Best practices include using data science across departments and sharing information across teams to create a more efficient infrastructure, from product development and IT administration to supply chain management, marketing, and sales. Most of all, focus on the customer experience – including improving speed, personalization, and immersion with their needs – to make digital transformation truly relevant for the end user.
And don’t forget that having a great digital transformation vision can pay dividends. According to a recent MIT Sloan Management/Deloitte University Press study, 71 percent of digitally maturing companies say they attract new talent based on their digital vision, versus 10 percent of early-stage companies. New hires (and existing employees who are interested in up-skilling) want to be integral parts of the digital age, and they want their employer to be at the cutting edge of digital transformation.
4. Build a “Digital Academy” of Skills
In the end, the biggest driver of digital transformation will be your workforce. The workers that have the right skill sets will trigger the transformation and keep it rolling as new business processes go digital. First, know where your skill gaps lie. Run an audit to find out where hiring isn’t filling needed roles (we’ll bet many of them will be in IT, product development and digital marketing) and build an online upskilling program that allows existing workers to learn at their own speed. Then build your own “digital academy,” targeting certain departments with the right skills training curriculum and establishing a foundation to make training an ongoing process for every key role in the organization. Even executives can have their own training track in your digital academy, providing skills overviews that will help them make better business and managerial decisions.
Digital transformation will take time, but results will follow if you focus your efforts on the right transformational technologies, building a monetization strategy and a transformational vision, and online training programs to raise the skill value of your entire organization, top to bottom.
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