While digital transformation is driven primarily by rapidly changing technologies, its successful launch depends on a solid strategy. Companies that have successfully embarked on digital transformation are not simply adopting individual technologies to solve their individual problems.
According to MIT Sloan Management Review and Deloitte, maturing digital companies are focusing on integrating digital technologies to improve the way their business works.
By contrast, less digitally-grown businesses focus on solving individual business issues with individual digital technologies. Simply put, the true benefit of digital transformation is not the strength of individual technologies. Rather, they depend on how these technologies are integrated to make the most of every technology and transform entire businesses.
Digital transformation is the process of integrating digital technology into all business areas, which requires fundamental changes in the technology, culture, operations, and value of the business.
To make the most of emerging technologies and their rapid expansion into human activities, a business must reinvent itself by radically transforming all its processes and models.
Opportunities and challenges of digitization
The possibilities and opportunities of digitization are manifold. Here are 3 most mentioned by medium-sized companies and corporations.
Improved customer orientation
The digital transformation creates space for customer-oriented services, which not only offer significant benefits in the purchase of products and services, but also strengthen customer loyalty. Digitalization enables companies to respond to individual customer needs by creating new technical opportunities to produce and quickly deliver customized products and services.
Conquering new and still untapped market segments
The opening up of new market segments through active use of modern technologies should not be underestimated. Start-ups that have conquered international markets overnight with their digital products and services are just one example of how important digitization is. This potential can also be used by corporates, ie medium-sized companies and corporations, to open up additional parts of the market.
Communicating inside as well as outside the company has a big impact on market driven success. Digital processes enable the flow of information between teams, departments, executives, and management to be optimized.
Digitization is not (yet) a self-run. On the way companies often face challenges, of which you read the 3 most mentioned from the perspective of corporations and SMEs.
Development of competences and knowledge about digital technology
Businesses find it extremely difficult to develop skills and knowledge about digital technology. Respondents mainly mention digital production knowledge, digital maintenance skills and digital knowledge for operational and strategic analysis.
Data and Internet security
Information security represents all modern businesses running cloud applications. For example, companies are particularly concerned about operational disruption by hackers and the exposure of commercially sensitive information.
Specialized strategic management and planning expertise
Almost every management in SMEs and corporations is aware of the urgent need for digitization and automation, but has so far converted this awareness into little or no concrete form in a strategic plan.
5 steps to your digitization strategy
Step 1: Define your transformation goal
Rather than rushing wildly into actionism, it makes sense that you first define what you want to acheive with digital transformation for your business.
What does a successful transformation mean for your business model, for your customers and their experience with your company? This not only helps to develop a comprehensive plan that involves and transforms the entire organization, but also avoids the isolated consideration and adoption of existing technologies.
The definition of the overall goal for your transformation should therefore focus on all levels of the organization.
Step 2: Design the Experience
After defining your goals, you will design the desired experience for your customers and employees. Instead of focusing on the demands of new solutions and limiting existing technologies, focus on the experience you want to deliver to your customers and stakeholders.
In this phase, you translate the overall transformation goals into more detailed goals. For example, these goals may include how to make your employee's work easier or more efficient through new software, applications, or functionality. Another goal may be how to give your customer an individual shopping experience, for example in your digital shop.
Step 3: Assess existing technologies
While the first two steps outline where you and your company want to go and what they want to achieve through digital transformation, the third step will give you an overview of where they are currently located.
This will give your team an idea of where your starting point for the journey is and what gaps they need to fill in to become a digital company. Take an inventory of your existing software, applications, and technologies here. Combine which results the individual solution currently delivers and which problems it solves. In this context, companies often discover island solutions that have developed over the years and now have the opportunity to approach these "patchwork quilts".
Step 4: Review and select Solutions and Providers
The next step in the digital transformation strategy is to evaluate and select potential solutions to achieve the goals set, deliver the desired experience, and close gaps in existing technologies.
In this step, perform a thorough and thorough review of possible solutions and offers from different vendors. Apart from the capabilities and functionalities of the solutions they offer, providers should be able to provide an appropriate reference.
Step 5: Create a schedule for the implementation
Bring your transformational goals, desired experiences, existing technologies, and possible solutions together into an actionable plan. A digital transformation initiative takes time and also requires resources, both at a human and financial level.
For this reason, several stages with milestones have been proven, which are designed completely individually depending on the company. A timeline will help your business to ensure the seamless implementation of the Digital Transformation Initiative. With this plan, you give the stakeholders, suppliers, employees, and customers, the security they need to generate transformation support and minimize disruption to business operations.
Here we go
In today's highly competitive business environment, digital transformation is a prerequisite and not a luxury. It enables your business to tap into new customer segments, marketing channels, new markets, and opportunities to increase revenue and efficiency.
Do you need active support on your path to digitization? Talk to us