What you should know about digital transformation in 2021

Although digital transformation has been a buzzword for several years, do you really know what it means – and how it can benefit your organisation? Implemented correctly, a digital transformation strategy can forge an organisation forward in terms of how it meets the needs of its customers, and sets itself apart from the competition in the coming years.

The underlying idea behind digital transformation is that of integrating digital technology into a business so that it functions better, and delivers more value. A common misconception is that digital transformation is simply about implementing a new technology into a business. It’s actually much broader than that: digital transformation is about seeing how a company can adapt to new market conditions and new consumer demands, and then use the best technology available to fulfil that goal.

When introduced across an organisation, digital transformation offers several broad benefits:

1. Enhances the customer experience: The experience of your customer is at the heart of digital transformation; the primary focus should be about how to use technology to improve every customer experience with your brand.
2. Greater data-based insights: It’s possible to make massive changes to both costs and revenue by analysing data-based insights and integrating learnings into your company’s processes.
3. Increases agility and innovation: New competition, new tools, and new trends mean that your customers will want more, and they’ll want it faster and better than before. As an organisation, it’s therefore crucial to be agile and innovative in order to survive.
4. Encourages employee interaction: Digital communication platforms allow employees to engage in conversation and learn new things more effectively. Solid leadership to get this process going will help improve the overall digital intelligence of your workforce.
5. Improved skill sets and knowledge: The demand for specialised skills will continue to grow. Digital businesses of the future will need people with the following skillsets:
   • Conversational writers for artificial intelligence.
   • Artists to create Augmented Reality with engaging, beautiful, realistic interfaces.
   • Hybrid design writers.
   • Machine learning experts.
   • Data exploration/analytics experts.

Jerry Chen, a partner at Silicon Valley venture capital firm Greylock, says that in order to build a sustainable and profitable business in future, a company’s digital transformation journey should including building new, highly defensive “moats” around their company.

As opposed to traditional moats like high switching costs, brand loyalty and trade secrets, the moats of the future will involve what he calls “systems of intelligence”. These are systems that use their own data crossed with other data sources – such as combining web analytics with customer and social data – to predict end-user behaviour and therefore add value to their customers.

These systems of intelligence can become tools for a successful digital transformation strategy in three major areas:

• Customer-facing applications that engage your customers in their journey with your brand.
• Employee-facing applications that empower employees to do their jobs better.
• Systems that optimise your operations.
• Systems that transform your product.
• Systems that leverage data that’s unique to a particular vertical, thereby adding unique value to customers within that industry.

Given all that we’ve learned above, what are the building blocks of a digital transformation strategy within an organisation?

• Processes that enable you to get your products to market quickly, often through innovative digital platforms.
• The best possible user experience for your customers, whether they choose to engage in person or via technology.
• The best user experience for your employees, whether they are permanent, temporary, or freelance.
• An understanding of your customer feedback and how can it be used to generate more value.
• Optimal operational efficiency so that all the building blocks work together effectively.

In order for the business of the future to success, organisations will need to adopt and apply a dynamic company culture that embraces digital change throughout all of its processes. By embedding digital transformation into a company’s DNA, they will be able to consolidate processes and operations, allowing them to bring together not just their workforce, but their entire architecture.

Sources:
Digital Transformation Is Not About Technology
The New Moats