Approaching digital transformation can be daunting as it’s easy to focus on the initiative as a whole. However, when broken down into its respective parts, the transformation becomes more feasible and organizations are able to stay focused. In this article, we’ll look at four types of digital transformation and how they impact the businesses that embrace them.
Four Different Types of Digital Transformation
Digital transformation used to be more centered on adopting digital tools to create efficiencies. However, as businesses find new ways to collect product and customer data, this goal has evolved. Teams are no longer limited to using digital tools just for creating operational efficiencies. Now they can use these tools to create new streams of revenue, anticipate customer needs and use data to develop new products and services.
Getting into all the nuances of digital transformation could fill the contents of a book. So we’ll focus on the overarching areas of digital transformation.
- Business process transformation is where most businesses begin their transformation journey. That’s because it’s easiest to visualize and measure how improvements to your operations will increase ROI. Digital tools can be used to detect defects in real time, ensure machinery is being used to its full potential, eliminate waste, etc. These efficiencies can lower costs, improve product quality or reduce the time it takes to deliver your products (digital or physical). For example, businesses in the agriculture industry use IoT devices to guide harvesting robots that can operate 24/7 and help solve labor shortages.
- Business model transformation has revolutionized how companies deliver goods and services. Just think about how Uber changed the way people get rides or how Amazon reinvented how we shop. While your transformation may not shape an industry as Uber and Amazon did, it can still be effective. For example, reducing friction in the ordering process with an intuitive digital tool may delight customers more than a groundbreaking new feature.
- Domain transformation. Some businesses have been able to enter new domains with the adoption of digital technologies. Consider Disney. Previously, they offered the majority of their entertainment through third-party retailers. But recently, they have been successful in entering the digital streaming marketplace. By leveraging their existing large content library, they were able to quickly gain a unique advantage in this domain.
- Cultural transformation. Technology has had profound effects on the way we work, facilitating communication and collaboration. Through digital tools, organizations can tear down departmental barriers and foster an environment that supports cultural transformation — which has been the breeding ground for industry-leading innovation and high-performing teams. Tech companies like HubSpot and Salesforce are great examples of how strong culture can lead to widely adopted products with loyal customers.
At first glance, these transformations may seem out of reach. But breaking them down into manageable goals will make digital transformation more attainable. Think of the one thing that would have the greatest impact on your organization and shape your strategy around that goal. Don’t let intimidation freeze your organization’s progress.
Digital Transformation Requires Strong Communication and Digital Tools
Digital transformation can fundamentally change the way you do business. But in order for it to be successful, you’ll need to give special attention to your communication and digital tools.
Change can be scary for an organization, as people may not know how it will affect them. Will it involve downsizing? The good news is that productive change usually signifies growth for the business and realizing this can help alleviate employee fears. To facilitate the buy-in of digital transformation, you need to have good communication throughout your organization — be transparent about what the transformation involves and address the concerns of your staff.
Successful digital transformation also requires digital tools and a comprehensive strategy. OneNeck can help you navigate the complexities of digital transformation. One way we do this is by providing the digital tools you need to improve operations and pivot existing business models. Our team is experienced in data transformation, digital infrastructure assessments, project management, and more.
Technology will continue to march on whether your business is ready or not. Digital transformation is the only way to keep pace and not become obsolete. We’d love to discuss how you can use digital transformation to create new opportunities and operational efficiencies. Contact us to learn more.