This is really a very Important Question which everyone is asking is as to What does digital transformation for business really means …
The term “Digital transformation” is getting more and more popular among any up-and-coming businesses.
Said to be the next “big” change every business is expected to witness. With the growing buzz, companies across the globe are worried about how to adapt to this new change.
In my honest opinion, digital transformation is real, effective and critical for every business in the coming years.
Like it or not, we have to make a piece with it. If you still haven’t understood what truly defines digital transformation, we’ve got you covered.
Before we dig deep into the definition of digital transformation, we like to say that digital transformation can mean many different things to different businesses.
It is because every business is unique from one another. Digital transformation can mean different solutions or concepts to businesses to be future-proof for success.
What is the meaning of Digital Transformation?
In simple terms, digital transformation is the new change of using technology to innovate and create different ways to do business to drive growth, revenue and enhance customer experience.
According to the experts like Brain Solis, a renowned digital anthropologist and futurist, “(…) the realignment of, or new investment in, technology, business models, and processes to drive new value for customers and employees.”
He says that the realignment is to help businesses compete better in the ever-changing digital economy.
At the core, digital transformation is about adapting to new, futurist and innovative concepts and ideas to bring in value for customers and employees, rather than enhancing or improving the traditional methods.
Nowadays, businesses find most of their targeted customer online than offline or at the store. So in the coming years, customers with a very short attention span and millions of brands option will make new or old businesses struggle. Digital transformation is all about preparing businesses to adapt to the recent digital changes.
In my opinion, we do business transformation to provide a Digital experience to the customer.
The major change has happened in terms of ‘What and How’ of doing business. Our ‘What’ part has remained the same, like, watching movies, reading books, ordering groceries but, the ‘HOW part has changed. Now we watch movies on Netflix, read books on Kindle, order through Amazon.
So now FAAAN (Facebook, Amazon, Apple, Alphabet, Netflix) are providing us true digital experience, that is you are able to consume these services (watching movie..) at any time, any place, anywhere. Also, they provide totally personalized experience.
I call this as ‘Digital Experience’
Digital transformation consists of four aspects:
- Understanding the true meaning of digital experience & applying it in your context.
- Understanding the cultural mindset & ground realities of your organization. Why digital transformation failed at many other companies.
There are WISE problems; you need to solve.
WISE (W – know your WHY, I – Integration with the ecosystem, S – Silos in the organization, E – Environment & Cultural aspect)
- Understanding new technologies & using them properly to transform the business process around us. Technology is an enabler only. Don’t run behind each shiny object. You need to properly understand, which technology to use and why?
According to me, you need to apply ACID (A – Artificial Intelligence, C – Cloud, I – Internet of things, D – Data) formula.
- Understanding Digital Anthropology, to change your mindset & subconscious mind. First, we see what we like, later we start liking whatever is shown to us.
To future-proof digital transformation, we need to understand our subconscious mind & digital anthropology plays a key role here.
To conclude, digital transformation focuses on innovative new ways to improve businesses & provide personalized value to each customer, by using digital technology.
The Growing Spending on Digital Transformation
According to IDC Worldwide Semiannual Digital Transformation Guide, the worldwide spending on digital transformation is said to reach $2.3 trillion in 2023.
According to Eileen Smith, program vice president with IDC’s Customer Insights and Analysis Group, “Worldwide DT technology investment will total more than $7.4 trillion over the next four hours.”
Shawn Fitzerald, research director, IDC’s Worldwide Digital Transformation Strategies, says, “The shift toward capital funding is an important one as business executives come to recognize digital transformation as a long-term investment.”
While Statistic states that from 2020 to 2024, the total investments into digital transformation is estimated to reach $7.8 trillion.
Benefits of Digital Transformation
The advantages of digital transformation are many. Here are some of the significant points –
Improving Customer Experience
As stated earlier, the core of digital transformation is to improve customer experience. The significant importance of customer engagement with a company product or service is not worth neglecting at these times. More and more companies realize its gravity, with 92% of company leaders creating sophisticated digital transformation strategies to transform the customer experience.
Hyper personalization is key here.
More Agility and Innovation
Digital Transformation has the potential to reshape the market faster with improved agility and innovation than any other. Digital businesses employ agility to innovate rapidly to the market change and use their innovation to gain market share and scale faster than their competitors.
Accurate and Data-based Insights
By studying the customer purchase pattern and history, business not only gains the advantage to determine the next product to add to inventory and what to remove but also recreate business strategies. Companies can track metrics and analyses the data collected during the digital marketing efforts and tailor it to make the next product. The data-driven insights help with better decision-making and creating new ways to drive higher ROI.
Room For Collaboration Across All Departments
Teamwork is the keyword for running a successful business. When the entire team of people collaborate and improve the work for your customers, the outcome will truly earn success. In times like COVD-19, collaboration is a much-needed asset any business can leverage. DT is all about using technology to bring people from different departments and work together to create something greater. Without running in a separate direction, the team can make a major plan to draw in more customers and benefit the customers.
What are the Leading Drivers and Examples of Digital Transformation?
The leading drivers of digital transformation are Uber, Ola, Burberry, Net-A-Porter, Airbnb, LiquidSpace, Trivago, and many more. Uber’s entry into the transportation industry made other car rentals and taxi companies adopt similar initiatives like ride-sharing and on-demand service, including bikes and scooters.
What digital transformation is doing is to transition from the outdated processes and use technology to offer better service. The growing need for current businesses to adopt agile principles and improve efficiency with technology is felt significantly.
Here are some of the best examples you can take inspiration from –
TGI Fridays and IHOP – These restaurants are experimenting with virtual assistants to help customers with mobile ordering.
Porsche – The German automobile manufacturer improved customer experience by understanding more about their drivers.
Porsche major strategy was to place all customer data into a central CRM data centre and document every customer interaction.
The data-driven insights help with segmentation and predictive intelligence.
The result of the experiments was brilliant to generate an increase in overall sales conversation rate as the Porsche only contacted the customers who were interested in purchasing a car.
Anthem – The insurance company reinvented healthcare with digital transformation after Anil Bhatt, the vice president and head of digital solutions at Anthem.
He employed deep digital transformation into the financial, HR, and other departments to build agile structure, hire the best talent, and establish the right leadership to increase output.
Audi – The company shifted from traditional showrooms to virtual showrooms with multi-touch tables, tablet-user interfaces and power walls. The result, as expected, was phenomenal. At Audi City London, the immersive experience causes a 60% sales increase.
Daimer – The US leading steam cleaner company brought more than 1 million customers with their innovative digital transformation.
There’s more to digital transformation than we can imagine. In the coming years, companies willing to adopt and transform digitally will experience better advantages and revenue than the ones still stuck with outdated ways of doing business.
What are your thoughts on digital transformation for your company?
