Digital Transformation – how to thrive and not just survive through these difficult times
In times of ever-changing uncertainties, meeting the goals of a business is even more challenging. Digital Transformation, the reinvention of your business processes by becoming digitally coherent, can improve customer experience, operational agility, workforce culture and eCommerce delivery. To be successful in Digital Transformation is proving more difficult than traditional change.
In Digital Transformation: Improving the odds of success, McKinsey found there could be as high as a 45% chance of delivering less than expected, depending on the transformation practices a business adopts. They classified critical practices into five categories:
- Leadership: ensuring you have digital-savvy leaders who must be committed to and prioritise Digital Transformation.
- Capability Building: redefining roles and responsibilities to align with transformation goals will help clarify the capabilities your company needs. Combining business knowledge with technical skills connects traditional methods to the newer, digital parts of the organisation.
- Empowering Workers: focus on cultural and behavioural changes such as calculated risk-taking, increased collaboration and customer-centricity, and new working methods, such as continuous learning or open working environments. Allowing your employees to help identify where digitalisation can improve the business will increase the chances of success.
- Upgrading Tools: making information more accessible across the company and implementing digital self-service technologies for staff and business partners more than doubles the chances for success. Changing your standard operating procedures to be inclusive of new technologies and increasing data-based decision making will also help your digital transformation succeed.
- Communication: good communication is fundamental to successfully implementing any change and especially the focus on employees to ensure they understand the changes that are happening and the direction of the organisation.
Businesses need to embrace new technologies, as the market changes and competitors adapt, they face failure. McKinsey suggests that organisations with successful transformations are likelier than others to use more sophisticated technologies. This is supported by the World Economic Forum, who, in their Digital Transformation Initiative, state that the 'falling cost of … technologies is a defining characteristic of the digital revolution.' They identify seven technologies expected to have the most impact:
- Artificial Intelligence: the ability to process information from sources 'within and beyond the traditional value chain' providing real-time decision support and predictions for the future.
- Autonomous Vehicles: digitalisation will use the technologies already offered by manufacturers, e.g. from Assisted Driving such as lane-warning crash avoidance and automatic parking assistance to self-driving vehicles.
- Big Data Analytics and Cloud: platforms that secure content management, workflow, and collaboration, making it easier to automate processes and help keep vital business information private.
- Custom Manufacturing and 3D Printing: driving out inefficient practices by increasing transparent operations and aiding in 'advanced and innovative models between producers, suppliers and society.'
- Internet of Things and Connected Devices: encompassing everything connected to the internet, providing the opportunity for these devices to communicate with each other, and making it possible to collect data, analyse information and create an action.
- Robots and Drones: increasing automation, minimising human interaction, increasing efficiency and reliability, whilst also helping employees to be more productive.
- Social Media and Platforms: helping to increase transparency and share information. However, there can be some ethical issues, beyond privacy and security concerns, that create a lack of trust in these technologies.
'We're now more reliant on technology than we've ever been before.'
(How Private Equity Can Help TMT Businesses Grow – Dewi Hughes, Head of South West & Wales, LDC, Ask the Expert, Insider West)
To succeed, it is essential to have the right people, processes, and technologies. Shawn Morgan, in "Why Digital Transformation is an Opportunity, not an Obstacle", says: 'it has to be a company-wide initiative that needs everyone to prepare for new and improved technologies.' He quotes psychologist Carol Dweck, who noted how Digital Transformation reaps rewards when a whole organisation approaches new challenges as a shared struggle, where mistakes are inevitable, and your team members and company 'have got your back.' highlighting the importance of the workforce. Morgan adds that the companies that have succeeded have had two things in common: the 'adoption of digital solutions that make information more easily accessible' and 'the implementation of self-service tech for internal and external stakeholders.'
'Technology is changing consumer behaviour and consumer behaviour is influencing changes in technology.'
(Why Digital Transformation is an Opportunity, not an Obstacle – Shaun Morgan, Bynder)
Today, during the pandemic, the movement towards digital commerce is more vital than ever. According to an article from Which-50, COVID Will Change These 5 Areas in Digital Commerce, says Gartner:
- Contactless Commerce allows customers to 'conduct buying activities without touching public structures or hardware' allowing for safer transactions.
- Visual Configuration 'tools enable sales representatives and customers to see a 2D or 3D visual representation of the product they want to order' avoiding physical displays and encouraging more self-service options.
- Live Commerce uses 'live video streaming to demonstrate products and interact with shoppers in real-time' offering an alternative, digital, way of preventing drops in sales.
- B2B Consumerisation, focusing on digital channels such as live chat, video chat, social and mobile apps, have been prioritised to help attract customers. This is expected to continue post-pandemic as these technologies 'promote intuitive user experience and anytime anywhere availability of comprehensive buying.'
- Enterprise Marketplace - online marketplaces operated by organisations that enable third-party sellers to sell directly to end customers - marks a 'fundamental business model change for commerce organisations, propelling them towards digital business,' (Which-50).
'Businesses have quickly pivoted to online sales and remote service teams, schools have introduced digital classrooms, and even the medical profession…has adapted to include virtual consultations.'
(How Private Equity Can Help TMT Businesses Grow - Dewi Hughes, Head of South West & Wales, LDC, Ask the Expert, Insider West)
In Unlocking success in Digital Transformations, McKinsey suggested that many companies fall short when it comes to improving performance through Digital Transformation. There is a lot to learn from the measures successful companies have taken.
Whilst Digital Transformation provides many challenges, 'organisations need to create a company culture that doesn't wait for change but looks for change,' (Shaun Morgan). Embracing change and adapting to new technologies is vital for any business' survival.
To find out more, and share your challenges, why not join our roundtable, in association with Metro Bank and Triangle Networks, on the 19th January. Register, free of charge, here.