Beginner's Guide to Digital Transformation Strategy
What is a Digital Transformation Strategy?
Digital transformation is defined as the process wherein businesses use digital technologies in order to radically change. Digital transformation is far reaching and includes changes in everything from business models to decision making protocol. Key drivers of digital transformation range from growth opportunities to customer service improvements.
Key digital transformation focuses include employee performance, customer experience, competitive advantage, and data analytics. Digital technologies often utilized in digital transformation include cloud computing and mobile app development. The benefits of a successful digital transformation strategy range from optimized resource management to enhanced big data collection.
Case studies reveal that businesses around the world will spend $2 trillion on digital technologies by 2020. However, not only leading digital technology experts should care about implementing digital technologies. Nor only United States professionals working in the business districts of New York or Los Angeles. Digital transformation influences everyone in the digital world and digital age including existing and new business owners.
4 Types of Digital Transformation
33% of executives credit a lack of clear transformation strategy for blocking full digital business potential. Unsatisfactory digital capabilities and digital disruption are a real threat to both existing and new business owners. Thankfully, digital disruption concerns are addressed by correctly implementing digital transformation initiatives. 4 types of digital transformation that all business professionals should know include-
1. Business Process Transformation
Successful digital transformation depends on business process improvements. As such, business processes ranging from supply chain to social media activities must be addressed thoroughly. The business process component of digital transformation is likely to be time and energy consuming. However, the benefits that businesses receive as a result of successful business process transformation are well worth the investment. Common benefits of business process transformation include increased product quality and customer service improvements.
2. Business Model Transformation
A business model transformation focuses on the building blocks of value delivery. Successful business model transformation offers many companies outstanding growth opportunities. Many companies are even able to maintain current business processes during business model transformation.
3. Domain Transformation
Many leading digital businesses have expanded their bottom line through domain transformation. For example, Amazon expanded into cloud computing services through the establishment of Amazon Web Services. The success of Amazon's domain transformation was outstanding. In fact, the infrastructure and cloud computing service now accounts for a significant portion of Amazon's annual profits.
However, domain transformation is not only for leading digital businesses. Domain transformation can also be utilized by smaller businesses that invest in the right building block technologies. Common examples of building block technologies include artificial intelligence and machine learning technologies.
4. Organizational Transformation
Long term successful digital transformation depends on organizational transformation. Organizational transformation necessitates the development of the digital capabilities needed to survive in the digital age and world. Many companies utilize change management for organization transformation purposes. Change management best practices include a more decentralized organizational structure with team decision making initiatives.
Remember-: The increase in digital business operations has led many companies to embrace an organizational structure that is more decentralized.
3 Pillars of Digital Transformation
Many companies have already realized that digital transformation is complex and complicated. However, there are many tips that businesses can consult for making the transformation process go more smoothly. 3 pillars of digital transformation that all businesses should know of include-
1. Employee Experience
Considering that employees are the most valuable resource a business has, a transformation strategy must focus on the employee experience. Too often, decision making for artificial intelligence digital transformation investments fail to properly consider the employee experience. Ultimately, a successful digital transformation depends on the employees that facilitate it.
2. Customer Experience
Case studies show 68% of Chief Experience Officers believe customer experience will be emphasized over products in the future. As such, customer experiences should be focal in decision making regarding new digital technology investments. Similarly, business models and business processes should be customer experience and customer service focal.
Remember-: According to the majority of Chief Experience Officers, customer experience will be more heavily emphasized than products in the future.
Case studies estimate C-suite executives establish transformation strategies only 36% of the time. Other case studies found most tech initiatives fail without CEO involvement. Considering these case studies and their findings, a lack of leadership can be a costly mistake.
C-suit executive participant is absolutely crucial to facilitate the organizational structure change necessary for a successful digital transformation. As digital transformation influences everything from internet things to supply chain operations, everyone must be on board. Another strategy digital transformation experts recommend is establishing a supportive team of department heads for leading digital transformation initiatives.
4 Benefits of Digital Transformation
A significant amount of resources are required to successfully implement a digital transformation strategy. However, these investments are well worth the benefits that businesses can expect to reap from implementing digital transformation strategies effectively. 4 significant benefits digital transformation offers businesses include-
1. Customer Experience
For many companies customer experience is considered during short and long term business goals and business strategy decision making conversations. With the transformation digital advancements in technology enables, customer experience related business processes are also transformed. Previously, the customer experience and customer service was largely in person. Currently, increased participation in online business models and social media platforms have changed the game.
With improvements in customer service capabilities and customer experiences comes increased bottom line profitability. Many companies that accomplish transformation success notice a significant increase in revenue. Digital transformation increases efficiency for a wide range of business processes including supply chain and social media activities. With artificial intelligence digital technology like machine learning capabilities, business process automation is widespread. These digital capabilities increase profitability for organizations in the United States ranging from New York to Los Angeles.
Humans live in a digital age in a digital world that shows no sign of slowing down. Before many companies may have viewed digital transformation as an option. Now, digital transformations are necessary for long term business survival. Unfortunately, many companies realize this as new business owners or competitors with a successful business transformation threaten their market share.
Note-: A successful digital transformation strategy can supply businesses with a competitive edge.
4. Data Collection
Many companies acknowledge that big data and data analytics are crucial to transform business operations. However, many companies also struggle with both data collection and data analytics processes. Thankfully, successful digital transformation helps businesses with big data related needs. As a result, everything from business models to decision making for business goals is positively influenced.
4 Tenets of a Digital Transformation Strategy
Many companies in the United States and in the larger digital world use digital transformation to survive and thrive. However, there is much more to consider beyond simply new technology investments. A successful digital transformation strategy necessitates massive changes that influence all aspects of a business. 4 primary tenets of a digital transformation strategy include-
For successful digital transformation to occur, business professionals need to be in alignment. As such, identifying business goals before a digital strategy is critical. Long term strategic goals should generally span at minimum several years into the future. Digital business experts advise that strategic goals outlined in the digital strategy span 5-10 years into the future.
Preparing to transform business operations also necessitates defining priorities and values. Referencing instituted business model building blocks are a great place to start this process. Many companies use building blocks when establishing new business models due to the scope and detail supplied. Building blocks detail everything from the supply chain to cloud computing capabilities. After building blocks based business goals are identified and business digital needs are established transformation is much easier.
Important-: Businesses should review building blocks during long term strategic goal establishment.
A long term business strategy that incorporates buy-in and morale is essential to digital transformation. Companies can demonstrate successful new technologies on a small scale to address or change management opinions that are negative. For example, a transformation strategy of implementing digital technology for a single factory. Observing how the factory will use new technology to accomplish business goals can significantly change management and employee mindsets.
A successful digital transformation begins with a business strategy and strategic roadmap for implementing digital technologies. A digital transformation strategy strategic roadmap should go beyond business models and goals. An excellent digital transformation strategic roadmap incorporates business process and organizational structure as well. Both short and long term business goals must identify the digital technologies necessary. Digital technologies to consider range from cloud computing to big data analytics tools.
For a successful digital transformation, short term business goal wins are built in. The accomplishment of short term business goals established in the digital transformation strategic roadmap increases buy-in and morale. A strategy digital transformation experts recommend is leading with simple use cases with measurable results. As such, many companies use short term business goals accomplished as building blocks for long term transformation success.
With a proper strategic roadmap established investing in new technology is much less intimidating. Successful new technology investments require meticulous decision making regarding both products and partners for implementing digital technologies. During this decision making process many companies contact customer service departments and request use cases to review. The customer experience offered by leading digital technology providers that understand digital disruption is invaluable.
How to Lead Your Team Toward Digital Transformation
A successful digital transformation process relies heavily on the establishment and maintenance of an organizational structure rooted in leadership. An excellent organizational structure encourages employees to believe in the strategy business leaders have crafted. Executing the strategy digital transformation professionals crafted requires both short and long term efforts. Tips for leading business professionals towards digital transformation include-
Successfully implementing digital transformation strategies and an overall digital business model requires teamwork. Leading digital businesses use digital transformation feedback from their employees to improve their strategy. Requesting employee feedback is especially important when a business starts implementing digital transformation strategies.
Tip-: Employee feedback is especially valuable when implementing digital transformation strategies for identifying any issues or areas for improvement.
Any decision making initiatives during digital transformation should focus on data. Big data and data analytics results supply businesses with invaluable insights. Unsurprisingly, investments in business digital tools such as machine learning cloud computing are increasing. Case studies on subjects like digital disruption or change management can also be helpful to review for decision making initiatives.
In both the United States and abroad, many companies report employees are nervous about new digital transformations. This is especially true when employees worry that new digital technology will make their roles obsolete. As such, leaders should address these concerns and firmly assure employees that new digital technology will help, not hurt them.
Another common obstacle to successful digital transformation is intimidation regarding new digital tools. To resolve this, leaders can supply digital capabilities training for employees to show them how to optimally use digital technologies. Many companies find that digital capabilities training improves business process efficiency and employee satisfaction overall.
Conclusion for Digital Transformation Strategy
- A successful digital transformation strategy is crucial for business success.
- 4 types of digital transformation include business processes, business models, domain, and organizational transformation.
- Benefits of a successful digital transformation range from increased bottom line profitability to enhanced customer service capabilities.
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