What is digital transformation?

Digital transformation is the integration of digital technologies across the entire organization to create a fundamental change in the way the business operates. It is a chance to define new ways of working, optimize processes, introduce new business models, and reimagine the customer experience. For digital transformations to be successful, they require a shift in organizational culture. Employees should be empowered to develop fresh ways of solving problems and given the freedom to allow innovation to flourish.

When successful, digital transformation has the power to significantly increase efficiency, reduce costs, enhance customer experience, and create a sustainable competitive advantage. Businesses can also take advantage of opportunities that exist in the market with the creation of new business models and through digital disruption.

Which companies have achieved successful digital transformations?

Digital transformation can be a complex process, but if done well, it can give companies a huge advantage over their competition. Take these transformation initiatives for example:

Where should you start with digital transformation?

Developing a digital transformation strategy is a vital and basic step to take before any decisions can be turned into reality. However, business leaders may find it difficult to know what to focus on.

To create an effective digital transformation strategy, a company needs to find answers to the essential questions of Why, What, and Who. That’s what enables creating a compelling vision and plan for change.

As McKinsey’s data indicates, a well-planned digital strategy and a good change story make transformation efforts more than three times as likely to be successful. Illustrating the vision helps present three most frequent reasons for a digital transformation failure: failing at employee engagement, having too many priorities, and losing clarity.

The Why presents all reasons in favor of digital transformation and reveals the stakes – is it an opportunity to grow and develop the business or a threat looming over its existence?

The What gives the object of change a clear meaning – digital is full of buzzwords or terms like machine learning, AI, robotics, cloud, or mobile, which, in reality, are understandable only to a few. What’s crucial for getting an organization-wide buy-in is relating to the everyday employee experience and presenting how it can be improved by digital solutions.

The Who means decision-makers responsible for driving the effort and having the authority to make quick decisions as strong leadership. Answering this question is the key to the success of a digital transformation.

A digital transformation strategy should also answer the questions of Where, When, How, and How Much. This should be done at the execution level, creating a plan for successful execution.

The Where focuses on business areas the change will impact the most – is it several separate experiments or a single company-spanning project? Where should the need for cooperation across silos of departments and suppliers be emphasized the most?

The When sets the timeline of planned changes – it indicates when results should become visible and aligns the transformation with business objectives and goals.

The How describes the way the change will be delivered and implemented. This answer should cover a number of aspects – from technology and methodology to covering skill gaps and adapting culture. The right answer to the How should address employees' fears and explain any doubts.

The How Much covers the extent of costs the company is willing to bear. It means not only financial expenses but also the inconvenience people will need to live with until the change settles in and new ways become business as usual.

Developing a digital transformation strategy is an exercise in bridge-building. The authors of change should know how to “sell” this vision internally and present the desired outcomes honestly, but also in a positive light.

The story for change links the current state with the desired long-term vision of the company – it also connects the current employees’ fears with their ambition.

Does your company need digital transformation services?

The answer to this question depends on whether you have the necessary skills, expertise, and experience in-house. If not, engaging a digital transformation partner is a valuable investment in the success of your project. A good partner will be able to provide support in these areas:

Finding opportunities within your organization and market, and developing a digital transformation strategy to exploit them. This will be based around the individual needs and goals of your business.

Implementing new technologies to automate and streamline manual processes.

Building bespoke software products that enable digital disruption through new business models and the opportunity to reimagine processes.

Identifying and promoting the cultural changes needed to embed and sustain new ways of working.

Partnering with experts who have successfully facilitated numerous digital transformations can add immeasurable value to your transformation initiatives.