Any transformation is a hard process, but a digital one is even harder. However, the results of the changes point to the vivid factors for success.
Digital technologies change industries dramatically everywhere around the globe. Many companies are focused on large-scale change efforts. They constantly implement more digital workplaces, apply the benefits of the latest trends and try to keep up with their rivals.
The goal of this post is to answer some common questions around digital transformation and provide clarity for the important subject.
What is a digital transformation?
Digital transformation means a deep transformation of business and the company’s processes, competencies, activities, and methods to completely leverage the changes of digital technologies and their impact across society in a strategic and prioritized way.
Digital transformation does not mean disruption. While it is principally used in a business context, digital transformation also influences other organizations. For example, public agencies, governments, and companies that are involved in solving social challenges. Below is a bit more about this.
What are the areas of digital transformation?
Digital transformation can touch upon the transformation of:
- Business activities such as various operations, marketing, administration, human resources, customer service, and so on.
- Business processes that involve connected operations that are aimed to achieve specific business goals. Thanks to them, process management, optimization, and automation come into the one picture.
- Business models. It’s about how companies perform, from the value proposition and market approach to the ways they seek to make money.
- Organizational culture – when it must be a clear customer-focused and agile goal that is achieved by acquiring competencies in such areas as leadership, digital maturity, and so forth.
- Business asset management. The focus is on traditional assets but also on information and customers, which need to be treated as real assets in all perspectives.
- Business ecosystems that include partners or stakeholders networks and some contextual factors (for example, regulatory or economic priorities). These systems are created between companies with a different background upon the fabric of digital transformation.
- Client, worker, and partner approach. Digital transformation highlights individuals and strategies before any technology. Here stakeholders’ behavior, expectations, and needs play a crucial role.
Digital transformation: why does it matter?
There are several obvious causes of why a business may take on digital transformation, but to make the long story short, one of the most likely reasons is that it must to do it, as it’s a survival issue for many companies nowadays.
Of course, companies all over the world are at different stages in the digital transformation process. However, digital transformation speed has become a business imperative for all of them. Digital initiatives together with artificial intelligence solutions continue to lead to increased agility and speed for the entire company.
Digitization vs Digitalization vs Digital Transformation: Defining the Key Differences
What is digitization exactly?
Digitization is mostly about the move from the analog system to digital.
Some times ago, companies kept records on paper, dealing with handwritten ledgers or typed documents, all kinds of papers, binders, xeroxes, and faxes.
The physical documents were changed with computer technologies and most companies began converting those paper records to digital files. All this is about digitization – the process of converting data from analog to digital.
Digitizing has made finding and sharing information easier. Digital data has become was more efficient for businesses than analog. However, many business processes are still designed around analog ideas about how to find and share information.
The definition of digitalization
Digitalization is about using digital data to simplify the way you work. This is the process of using digitized data to make the work simpler and more effective.
It does not mean changing how you do business or how you create new types of businesses. Digitalization means keeping on but faster and better when your information is instantly accessible and not held in a dusty file box somewhere in an archive.
Digitalization has significantly changed service (especially in such spheres as retail or call centers) by making clients records easily available via computers. The basic methods of customer service didn’t change. However, the process of searching for the relevant data, and offering resolutions became much more effective.
What is the power of digital transformation?
The key thing is that digital transformation adds value to each customer interaction. Digital transformation changes the way business gets done and businesses revisit everything they do, from internal systems to customer interactions online and in person.
In the digital environment, businesses of all sorts create smart and effective ways to leverage new technologies and daring innovations.
What are the digital transformation examples?
The impressive case of digital transformation relates to Hasbro, the toy and game company. It has made significant investments in its digital strategy that paid off in a big way.
In 2012, the company realized that instead of focusing on children, it should sell to their parents, who actually make purchases. Hasbro team utilized required data to generate targeted marketing campaigns on multiple channels, including social networks.
The information helped them to better understand their clients and recommend relevant games and toys to parents. This also helped Hasbro to build a frictionless experience. The company applied the power of digital storytelling via video content and social media.
This kind of digital transformation was rather cheap. Hasbro increased its ad spend but increased sales by $1 billion. In 2016, their sales hit $5 billion.
Their growth was disrupted by industry changes; however, the focus on digital marketing and data has helped Hasbro to succeed timely.
What is your experience in implementing digital transformation? Would you like to share your insights?