There is talk of Digital Transformation all around – if you’ve ever wondered why then thank you for stopping by. This is a personal opinion piece of what’s driving digital transformation in today’s enterprises.
Forrester reports that just over half of companies are well underway with digital transformation[1]. But what about the rest? Apparently, 89% have plans for a digital-first strategy[2] but judging by the difference in those numbers, they’re having a hard time getting started.
Wherever you fall along the transformation spectrum, it’s important to know what drives this digitization revolution. To my mind, there are five drivers.
1. The Need for Agility
The ability to stay Agile (adapt quickly to marketplace trends, competitive threats, respond to customer feedback, be customer-focused, etc.) in a fast-moving marketplace is linked to becoming a digital enterprise. You can’t move quickly with old legacy apps and silo’ed departments within your enterprise.
You can’t even capture the data you need if you haven’t digitized your processes, restructured your organization to facilitate cross-functional teams, and changed the company culture to focus on the customer.
You need everyone on the same page while moving fast. That only happens in digital enterprises. Being digital enables a more holistic enterprise, where everyone, from the CEO to the front lines of customer service, is all pulling in the same direction.
2. Changing Business Processes
There’s no doubt that dramatic changes in the way work gets done have impacted businesses. A new generation of collaborative platforms and digital tools has endless possibilities. From managing remote teams to upgrading the way you keep in touch with customers to cloud-based operations that touch every department in your enterprise, it’s clear that digital transformation offers a wide range of benefits. And to remain competitive — to prioritize your customers, for example — you’ll need to board the digitization train.
I’ll even say that today your mobile workforce and remote teams (field workers, contractors, regional offices, etc.) just can’t be managed effectively without some fundamental elements of digital transformation in place.
Then there’s the “millennial effect” on workplace processes. Millennial employees demand technology-driven enablement at the workplace and if you care at all about attracting and retaining that talent, digitization is key.
3. Social Media
Social media is now a key part of most business plans. Whether it’s used for customer service, branding, reaching your audience, or for customer engagement, its impact is clear. These days, it’s all about the customer experience – and often that experience starts online within a social network.
Customer expectations are rising because of the enterprises that “Do” social media right. They get instant responses on Twitter when they tweet their dissatisfaction. So when your old-school email-based customer service team takes three days to respond to a complaint, you will lose that customer.
Customer service isn’t the only reason social media is compelling many companies to go digital. There are also opportunities to glean real-time insights from social media — insights that are lost if you’re not digitized. The ability to gather data, process it, derive actionable insights from social listening, and then act on them instantly is tied to how digital you are.
Social media opens other doors, too. There are key opportunities to weave social media marketing strategies into the very fabric of your business. When every employee is a brand advocate, even your accountants need to know your company’s brand strategy. This integration drives consistency, authenticity and transparency, all things that today’s consumers crave.
Including your entire enterprise and everyone who works for you in your brand story, giving everyone the chance to contribute ideas, to “live the story” in how they deal with vendors and customers alike — all those opportunities are lost if you’re not digital.
4. Improvements in Infrastructure
One of the great enablers of digital transformation is the dramatic improvement in infrastructure. With faster networks, better wireless connectivity and the proliferation of smartphones, there is a much lower barrier to entry. It’s now so much easier to make digital the premier platform for commerce, communications and more.
5. Artificial Intelligence
Finally, to the future – Artificial Intelligence. Those at Forrester’s Digital Transformation Summit last year would have felt the buzz around AI. Clearly, it’s coming, and it’s coming fast.
Seen in the light of an AI-driven enterprise, digital transformation is no longer a “nice to have”, it’s a necessity. An AI strategy will be key for future survival in a data-driven world inundated by tsunamis of data. If we’re all going to use AI to collect and leverage all that data we’re collecting, digital transformation MUST be the necessary first step — the platform to build an effective AI system on.
The building blocks of that platform are data. Data to help us deliver to customer expectation standards set by companies that have already embraced digital transformation.
None of these drivers of digital transformation I’ve mentioned today will be news to you. I’m sure you’ve felt their impact often enough. You’ve probably thought deeper about them coming together too. But if they have not driven you to consider digital transformation then consider perhaps the biggest driver of all. Think of what so many have said, “innovate or die”.
McKinsey reports an 8% increase in shareholder returns accompanied by a five-fold increase in the annual growth rate for companies that have invested in digital transformation[3]. That’s a worthy goal for everyone to strive for. Once you’ve made up your mind, the rest is easy. You already know the components that make digital transformation work: Data. Agile work processes. Enabled people. And yes, Tools and Technologies. And that’s what folks like us are there for – to help you make that transition. Ping me right here when you want to take that first (or later) step.
[1] https://go.forrester.com/blogs/the-sorry-state-of-digital-transformation-in-2018/ ↩
[2] https://resources.idg.com/download/white-paper/2018-digital-business ↩
[3] https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/how-b2b-digital-leaders-drive-five-times-more-revenue-growth-than-their-peers ↩