Most leaders don’t realize that success necessitates getting together and organizing a much broader spectrum of efforts. A poor performance in any of the four strategic realms of technology, data, process, or organizational change capabilities may derail a well-planned transformation. It’s all about people when it comes to the important things, from designing and sharing a compelling vision to crafting and modifying a strategy on the fly to slogging through the information. Digital transformation, rather than anything else, necessitates talent. Indeed, putting together the right team of technology, data, and process experts who can collaborate with a great president who can effect real change may well be the single most significant move an organization considering digital transformation can take. Perhaps the best talent, however, doesn’t ensure success. However, if you don’t have it, you’re almost certain to fail.
In this context, it’s shocking that more and more businesses only have a limited vision of digital transformation. To begin with, digital transformation is not a one-size-fits-all approach. Digitalization can be divided into four categories: business process, business model, domain, and cultural/organizational. We also see businesses focusing exclusively on process or organizational change. If you don’t answer these four forms, you’re missing out on a lot of money. Second, because of the multi-faceted nature of digital transformation, it must be a competitive sport including not only of the Chief Information Officer (CIO) or Chief Digital Officer (CDO), but also Strategy and Business Unit management, and that should be promoted by the CEO widely.Third, far too many businesses mistakenly assume that digital transformation should continue with cultural/organizational change. While teaching the company to be more creative, agile, and digital is critical, companies that prioritize business change strategies have a better chance of succeeding.
New technologies are creating tremendous opportunities, but companies that do not consider and embrace change in a multi-dimensional manner risk losing out. The four forms of transformation are described in more detail below:
- Transformation of the Process: Business processes have become a major subject of corporate operation. Data, analytics, APIs, machine learning, and other innovations provide businesses with valuable new ways to reinvent processes across the board, to decrease costs, shorten cycle times, and improving quality. On the shop floor, we see change process, with companies like Airbus employing heads-up mirror sunglasses to increase the efficiency of replacing humans of airplanes. We’re also seeing system improvements in the consumer experience, with businesses like Domino’s Pizza fully reimagining the food delivery process; Domino’s AnyWare allows consumers to order from any unit.
- Transformation of the Business: Digital innovations are being pursued by several businesses to transform conventional business models. Business model transformation strike at the building blocks of just how quality is generated in the market, while process transformations concentrate on finite areas of the business. Netflix’s reimagining of video streaming, Apple’s reimagining of music distribution, and Uber’s reconfiguration of the business world are all well-known typical examples of development. However, similar transformations are taking place in other parts of the world. Insurance firms such as Allstate and Metromile are using data and analytics to reconfigure insurance policies and charge drivers by the mile, which represents a significant shift in the automobile insurance business model. And, although it is not yet a reality, there are various attempts ongoing to turn mining into a fully autonomous operation in which no humans work underneath the surface.
- Transformation of the Domain: Domain transformation is an environment in which we see relatively little attention but tremendous potential. Innovations are reinventing products or services, blurring market lines and introducing completely new types of competitors. Many executives are unaware of the very real potential for these emerging innovations to open up entirely new markets for their companies outside those serving time. And it is also this type of transformation that provides the most potential for new value creation.
Amazon, an online retailer, is a good example of how domain transformation works. With the introduction of Amazon Web Services (AWS), the world’s largest cloud computing/infrastructure service, Amazon entered a market previously dominated by IT behemoths like Microsoft and IBM. The combination of strong technological advancement it had developed in memory and computational resources to sustain its core retail sector, as well as an installed base of thousands of partnerships with young, growth businesses that directly interacting computing capabilities to expand, enabled Amazon to enter this domain.
- Cultural/OrganizationalTransformation: Long-term digital transformation necessitates redefining corporate mindsets, structures, talent, and skills for the digital age. Digital includes flexible business processes, a preference against testing and training, decisions as a group, and a stronger emphasis on market ecosystems, according to best-in-class companies. They also take proactive measures to bring about progress in their organizations. Experian, a consumer credit agency that has undergone one of the most promising digital transformations, restructured its organization by incorporating agile growth and teamwork into its workflows and directing a company-wide shift in workforce focus from hardware to data.
The New Elements Of Digital Transformation
Customer Experience Transformation
Seeing the market from the outside in, from the viewpoint of the consumers, is as significant and important today as it was in the early stages of digital transformation. Although the emphasis on consumers has not changed significantly, the elements required to build process is an essential part have. User experience, customer relationship management, and emotional interaction are the three components today.
For several businesses and brands, the consumer experience has become the greatest battlefield. While it is simple to identify compelling experiences, they are difficult to create and produce. This is because this job necessitates both empathic imagination and technical prowess in equal measure.
Sephora turned long-standing consumer annoyances about cosmetics sampling and purchase into a convincing, digitally driven customer experience. The company developed a comfortable, at-home shopping experience that rivals the personalization of an in-store experience by using AI to adapt a customer’s skin tones to the most suitable items and virtual reality to preview the products. Between 2016 and 2018, Sephora’s solution, which was embedded in an app, drew 8.5 million user visits, and it aided the organization as the pandemic affected the in-store interaction.
Efforts made in the first step of digital transformation to integrate consumer data through storage facilities and recognize customer behavior were becoming standard in customer experience. Real-time customer intelligence is allowing individualized experiences and providing an opportunity to provide accurately oriented, proactive customer support, such as "next best deals," as artificial intelligence has begun to deliver on its original agreement.
Stitch Fix is an online fashion service that creates customized sets of clothing, shoes, and accessories for its customers. The retrieval is based on a comprehensive consumer style study, and it’s then enhanced and customized based on data including returns, expectations, and a Style Shuffle feature that asks subscribers to rate apparel photos every day.
Operational Transformation
Well-managed operations are still critical to turning sales into profit, but the emphasis of digital transformation in this area is shifting. Sensors, cloud, machine learning, and the Internet of Things are helping businesses of all sizes to change their organizational effectiveness. Members are also seeing how operational efficiency can go beyond rear productivity to allow interactive consumer experiences and business models that rivals can’t duplicate. This digital capability transition is taking place in three areas: core process optimization, interconnected and complex operations, and information decision-making.
Advanced technologies can help with rethinking core process automation, but they aren’t needed. By first developing a common core of digitized operations through an ERP scheme, Asian Paints transformed itself against a manufacturer of coatings in 13 Indian regions to a supplier of coatings, painting services, design services, and home renovations in 17 countries. This offered a solid base on which to create and a clean source of information from which to derive insights. Later, to digitally allow its growth, the business introduced machine learning, robotics, virtual reality, and other innovations.
Transforming Employee Experience
Employees can be either the greatest obstacles or the greatest enablers of transition progress, as we’ve discovered over the last decade of digital transformation. As a result, businesses have started to place equal emphasis on the workplace culture as they do on the customer experience. Augmentation, modern world, and flex forcing are three aspects of talent management enhancement that have grown in recent years.
The fear that robots will eventually substitute humans has given way to a more complex and fruitful debate. Companies are also looking at how robotics and other emerging technology can help boost employee efficiency and results, allowing them to work faster, smarter, and safer.
Companies must also develop agility into their talent procurement processes to adapt to fast-paced digital opportunities and threats. Outsourcing has offered a partial solution to the problem over the last decade, but with mixed results. Partner ecosystems have also been used to provide on-demand talent, but maintaining such ecosystems takes significant resources and attention. Some businesses are now pursuing talent agility in novel ways.