25 Jul How Ready Are You for Digital Business Transformation?
Business leaders across nearly all industries see the changes daily: Digital processes are seeping into almost every corner of how they operate. As I wrote about recently, digital business transformation is one primary reason that growing numbers of CEOs now make IT a strategic priority. But if change is hard, transformation can seem downright daunting. Is your company doing enough to embrace digital business?
Let’s take a brief look at what “digital business” means at a practical level, and what steps you can take to ensure you have a strategic approach.
What Is Digital Business, Really?
First, push past any skepticism you may have for the buzzword. As this insightful article defines it, digital business transformation is the strategic acceleration of business activities, processes and models to get the most out of digital technologies. Although digital business includes e-commerce and digital marketing, it’s clearly much more than that, too.
In fact, a fundamental aspect of digital business is how data and supporting technologies now interconnects business functions, processes, assets — everything — like never before. This is both a tremendous opportunity to improve how your business works, but also a tremendous challenge to ensure the transformation is effective.
It’s no secret that technological innovations can quickly disrupt markets and industries. While trying to stay at the cutting edge of disruption carries risks, so too does holding back too much. Adopting a digital transformation must be tied to business needs.
What’s driving digital business in many sectors is changing customer expectations. Customers demand greater technological capabilities and greater ease of use. According to one digital transformation study by Accenture Consulting, “improving the experience of customers” was a top strategic priority. But the survey also noted growing revenues, improving differentiation and reducing costs.
All of those priorities and more can be addressed through digital platforms and processes — if you manage the transformation well.
Planning Your Digital Transformation
Undertaking any kind of strategic digital transformation comes with some practical implications. Here are five things to consider as you begin to plan:
- Seek Clarity — Don’t let the overly broad term of “digital transformation” sidetrack your strategy. This catch-all label could potentially incorporate a wide range of initiatives, so be sure to define your transformation in a statement that has a meaningful and measurable outcome for your business, with distinct projects and timelines.
- Bust Silos — Organizational silos are one of the biggest roadblocks any digital transformation initiative encounters. Building a cross-functional team that represents IT, managers and all departments is key to identifying opportunities and streamlining communication. Also, this article makes a very salient point: Despite growing digitization, too much data, information and knowledge resides in silos. IT systems simply aren’t as smart and connected as anyone would like. Is it possible to lay the groundwork for automated, real-time, integrated systems? Absolutely. The platforms exist. But you need to get everyone on board.
- Prioritize Customers — Digital business can greatly improve how your customers interact with your organization. That doesn’t mean replacing customer service reps, either — it could just help them serve customers better. Starbucks, for example, lets customers order ahead via mobile app; baristas still need to pleasantly make the coffee and serve it, but digital tools speed up the whole process, which is better for everyone. For digital transformation to succeed, it must be informed foremost by your customers’ behaviors and what technology they use.
- Renovate, Not Replace, Legacy Systems — In most cases, ripping-and-replacing your legacy systems is just not feasible, nor is it necessary. Focus on modernizing them, through APIs or cloud-based service options. Overhauling everything is too disruptive and results in confusion from employees or outright pushback. Instead, think about how to renovate the core, foundational elements of your IT and business processes so you can build out a more effective digital platform.
Begin the Journey
Adapting your business to the new digital reality won’t happen overnight. Careful strategic planning will ensure the transformation achieves your business goals. Think broadly about how digital technologies can help your business be more efficient, engage customers in new ways or adopt new business models. And then ask yourself, is your technology infrastructure ready?
To discuss what kind of IT your business needs for its digital transformation, get in touch with Echopath.