The past two and a half years have had a significant impact on most, if not all, organization’s IT function.
Likely because of COVID but also due to other strategic reasons, many companies have recognized that they need to work differently and have undertaken a “digital transformation journey.” However, in many cases, these same companies lack an adequate understanding of the concept itself, the techniques necessary for a successful execution, and the pitfalls to avoid.
Defining Digital Transformation
According to Harvard Business Review, digital transformation is simply altering an organization’s strategy and structure to capitalize on opportunities afforded by digital technology.
Digital transformation has also been defined as the process of integrating digital technology into various sectors of an organization, which significantly transforms how a firm functions and offers value to its customers.
Digital transformation looks different for each company. It is not just an organizational and operational transformation, but also a cultural shift. Companies must constantly question their existing business processes in order to find better solutions. To facilitate or anticipate business expansion, the key areas for business transformation have usually centred around creating products at low cost and scaling operations digitally.
One of the illusions about digital transformation that needs to be debunked is that it necessitates severe disruption of the value proposition. In reality, digital transformation is simply the use of new digital tools and solutions to better fulfil the demands of customers. It could even mean performing the same processes, but more efficiently.
While the term “digital transformation” is commonly used in the context of corporations, it has a substantial impact on other organizations as well, including government entities, public sector firms, and many groups active in addressing societal concerns such as climate change. These businesses also adopt innovative technical solutions to enhance their processes, depending on their demands.
Why is Digital Transformation Necessary?
A company may want to become digital for a variety of reasons. The most likely reason for embarking on the digital transformation journey is that it is an urgent necessity.
Because of the rise of social media platforms and web-based sales solutions, there has been a paradigm shift in the way customers connect with businesses. The world has shrunk as a result of digitization, and so have the markets. International competition has joined the same arena as domestic competition. Now, no part of the world is too far away for a business.
Customers’ expectations for multi-channel availability and reaction time have shifted as a result of digital solutions. Businesses are using digital solutions to personalize their products, services, interactions, and communications to the individual demands of their customers.
There are several important factors driving the increased adoption of digital transformation solutions including:
1. Improved customer service
According to SAP, 92% of the CEOs they canvassed stated that they use mature digital transformation techniques and strategies to improve the overall customer experience. 70% of those CEOs also stated that adopting digital transformation into their workflow has resulted in significant improvements in customer engagement and satisfaction.
Customer satisfaction is essential to the success of any business. Providing a superior and unrivalled client experience is what distinguishes successful firms from unsuccessful ones. Digital transformation aids in enhancing the speed and agility with which insights are generated. It provides a revolutionary customer experience by creating and digitizing client journeys and developing agility in delivering journey transformations. This enables businesses to gain authority, trust, and respect from their customers.
2. Useful data-driven insights
An organization’s data is one of its most important assets. It must be fully utilized.
Digital transformation makes use of both structured and unstructured data to provide highly tailored and relevant insights. This also allows for agility and real-time feedback.
Let’s take a look at a basic example to see how important data-driven insights are. Digital marketing approaches are deemed more reliable than traditional or non-digital channels because digital channels provide quantitative explanations by evaluating real-world data rather than simply providing qualitative advice. Companies can optimize their efforts and improve the results of marketing campaigns by using this real-world data.
Organizations can boost their revenues by focusing on key areas that are actually critical to customers rather than ones that just notionally appear to be but aren’t based on solid insights based on the right data.
3. Improved coordination across all departments
Adapting to change is challenging for everyone. A large-scale business redesign is an unnerving thought for everyone, from leaders to junior staff. Regular, clear, and transparent communication across departments must be promoted. Everyone must take responsibility for their part in the transformation process. This will only succeed if everyone understands how the vision will benefit the organization in the long run.
4. Increased agility, innovation, and digital culture
Agility refers to an organization’s ability to constantly change, grow and develop. This is also true for digital processes. When it comes to digital transformation, 68% of firms regard agility as one of the top three critical success factors.
Because the digital landscape is changing so quickly, organizations frequently struggle to respond quickly and lose the advantage of being an early mover. Customers will often prefer a less expensive but superior solution to a well-established brand. As a result, not only new businesses, but also well-established businesses, must continue to improve and adapt to market changes.
Finally, stakeholders should focus on cultivating an innovative mindset and developing a comprehensive strategy to shift the organization’s culture toward digitization.
The Litcom Approach
Litcom works actively with our clients to help them adapt swiftly and succeed in this dynamic digital environment. We provide transformation strategy & consultancy, recommendations, and implementation services. Litcom’s digital transformation solutions are built on a solid foundation of experience and knowledge, reducing risk and empowering clients to achieve their goals faster.
Contact Litcom today for more information.