Everything You Need To Know About Digital Transformation

Organizations must always be focused on innovation, agility, and driving new efficiencies in their operations.

That’s why digital transformation has become the way for organizations to maintain their competitive edge in a rapidly evolving environment. A mixture of a mindset and an embrace of new technologies, digital transformation programs allow organizations to use technology to refine how they operate and deliver value to customers. Digital transformation enables organizations to optimize their operations, improve customer experiences, increase productivity, and drive innovation.

As with any fundamental change, turning on the power of digital transformation isn’t as easy as flipping a switch. It involves an understanding of its key elements, the stakeholders involved, and the scale of just how much technology can reinvent even the most basic of processes.

Fortunately, while every organization has its own unique goals for its digital transformation initiatives, over time a playbook of best practices and ingredients has been developed to help change leaders amplify the impact of their own program and make lasting change.

The good news?

You’ve found everything you need to know about digital transformation right here.

Digital transformation can help organizations achieve a wide range of benefits, including: 

Increased Operational Efficiency

Digital transformation helps organizations leverage technology to streamline processes, automate tasks, and improve workflows. 

In turn, technology can help employees to reduce errors, save time, and lower costs. Digital transformation can be used to:

• Implement robotic process automation to automate repetitive and rule-based tasks performed by employees, freeing up human resources to focus on higher-value activities.
• Leverage IoT devices and sensors to collect real-time data from various sources to optimize operations, monitor equipment performance, and improve resource allocation.
• Expand cloud computing and virtualization to more efficiently utilize resources and provide flexible performance.

Quick Responses to Changing Market Conditions

With the elements of digital transformation in place, organizations will be poised to quickly respond and react to changing market conditions by developing new products and services that meet customer needs.

For instance, organizations can use social media listening tools to monitor customer feedback in real-time, quickly analyze large streams of data from a variety of sources, and identify areas where they can improve their offerings or service delivery.

Digital transformation can also help organizations speed up product development without sacrificing quality, such as by: 

• Pairing automated testing with manual testing.
• Enabling organizations to adopt agile development methodologies that emphasize iterative development, frequent feedback loops, and collaboration among cross-functional teams.
• Encouraging the implementation of automation tools and DevOps practices that accelerates the software development lifecycle.
• Promoting the use of data analytics and insights to drive decision-making processes by leveraging data from various sources, including user feedback, market trends, and performance metrics.

Enhanced Collaboration and Employee Productivity

Digital transformation is also a key tool for improving collaboration, productivity, and communication within organizations, enabling employees to work together more efficiently no matter where and when they work. While offering employees new tools to collaborate is nothing new, developing a digital transformation strategy helps organizations go beyond these steps to create streamlined, intuitive, and secure ways for employees to connect no matter where and when they work.

This can lead to:

• Faster decision-making and more effective problem-solving.
• The automation of routine tasks to increase individual and team productivity.
• Access to new tools and resources employees need to increase productivity, such as custom mobile apps, data analysis programs, and software that automate manual tasks.

A Culture of Innovation and Continuous Improvement

Finally, organizations can go beyond the foundational elements of digital transformation and mature their programs to foster a culture of innovation and continuous improvement. By encouraging and facilitating experimentation and creative thinking, organizations can more rapidly iterate on new ideas, try new technologies, and reengineer processes to differentiate themselves in the market.

For example, organizations can leverage automation to develop use cases, prepare sample data sets and testing environments, and run scenarios to evaluate proof of concepts for new solutions or tools faster and more cost-effectively. 

Similarly, digital transformation can also deliver new types of training programs and methods to engage employees to help them stay up-to-date on emerging technologies, identify opportunities to innovate in their own roles, and employ best practices—leading to a more engaged, productive, and motivated workforce.

However, there are several key principles that separate organizations that led digital transformation programs that deliver real impact from those that are taking a reactive approach to change.

These differentiators include an organization’s embrace and understanding of:

1. Automation and digitization: Finding new ways to integrate technology to automate processes and digitize information.
2. Customer experience and engagement: Placing the customer at the center of business operations and using technologies in innovative ways to create personalized experiences, build stronger relationships, and deliver more value.
3. Data analytics and insights: Leveraging available sources of data to gain insights into customer behavior, business operations, and market trends, and then using this information to make data-driven decisions that improve business outcomes.
4. Resilience and security: Ensuring that the organization is resilient to disruption and cyberthreats by introducing security controls that enhance monitoring and threat analysis as well as enable fail-over and disaster recovery.
5. Collaboration and connectivity: Creating a connected and collaborative environment, enabling employees to work together more efficiently and effectively, and leveraging technology to enable remote working and flexible arrangements.
6. Innovation and agility: Fostering a culture of innovation, experimentation, and agility—empowering employees to embrace digital transformation to drive change from within.

Assess Your Organization’s Current State

Before sketching the path of your digital transformation journey, begin by evaluating your organization's current digital capabilities, mapping them to your business drivers, and identifying gaps that need to be filled. This assessment should consider factors such as existing technology infrastructure, employee digital skills, customer touchpoints and experiences, and business processes.

Identify Your Digital Transformation Goals and Objectives

Defining your digital transformation goals and objectives is crucial for ensuring a successful transformation. Collect input from internal and external stakeholders, peer and industry research, and organizational targets to gain a comprehensive survey of digital transformation goals.

These goals should also be aligned with your overall business objectives and strategy and should be specific, measurable, achievable, relevant, and time-bound. This step—along with the identification of metrics and target benchmarks—will help your team to:

• Clarify your direction and purpose for your current transformation journey.
• Align stakeholders around a common vision and desired end goal.
• Track progress toward the identified goals and hold themselves accountable for achieving them.
• Define goals and objectives to prioritize resources and investments, and allocate budget, time, and talent to initiatives that align with the defined objectives and deliver the most significant impact.

Create a Digital Transformation Strategy

Based on your assessment, create a digital transformation strategy that outlines the steps, required partner support, technology evaluations, and implementation considerations needed to achieve your goals. This strategy should consider factors such as:

• New or updated technologies to test and evaluate
• Processes to be defined or re-engineered.
• Partner implementation support.
• Organizational alignment and structure.
• Key messages that support and highlight the benefits of change.

While the format can points can vary, digital transformation strategies generally include:

• Vision and objectives: A clear and compelling vision for the future state of the organization and specific objectives.
• Customer experience: A listing of customer pain points and needs to create more customer-focused processes and services.
• Data strategy: An outline of how your organization will collect, analyze, and use data to inform decision-making.
• Technology strategy: The specific technologies that your organization will use to enable digital transformation, including how they will be selected and integrated.
• Metrics and KPIs: The relevant metrics and KPIs that will be used to measure progress and success.
• Roadmap: An outline of the specific initiatives your organization will pursue to achieve its digital transformation goals, including timelines, milestones, and key deliverables.

Ensure Stakeholder Buy-In with Change Management Initiatives

No matter where your organization is in its digital transformation journey, success relies on buy-in from all stakeholders, including employees, customers, and partners.

Therefore, change management initiatives are just as important as any other digital transformation element. Change management efforts should focus on:

• Communicating the benefits of digital transformation.
• Addressing concerns and questions about potential changes.
• Sharing transformation goals, milestones, and metrics.
• Explaining stakeholders’ roles and responsibilities in the transformation process.

Without interplay and engagement between each group, the vast majority of digital transformation efforts fail to meet their goals or create sustainable change.

To help provide your organization and your initiatives with the momentum they need to be successful, here is an overview of the different stakeholders and each of their roles and key considerations that come into play during each transformation initiative:

As was mentioned previously, no organization is immune from the challenges—and opportunities—of today’s digital world. 

For those organizations that have recognized and embraced the need for digital transformation, their investments are already rapidly evolving the way they operate and serve their customers.

Here are some examples of how digital transformation is changing different industries:

Insurance 

Digital transformation is changing the way insurers operate by introducing new tools and digital technologies to accelerate and automate tasks involved in application processing, underwriting, and claims management.

By using data analytics, insurers can make more informed decisions about risk and pricing, resulting in more accurate underwriting. Digital transformation is also allowing insurers to offer personalized marketing, customizable products, and additional mobile and digital customer experiences. This can improve customer satisfaction and retention.

Healthcare

Patients are already seeing big changes as digital transformation begins to take hold across the healthcare industry.

For example, telehealth is revolutionizing the way patients access care by providing virtual consultations, quick access to healthcare professionals, and remote monitoring for more responsive, accessible, and personalized care.

Similarly, additional data management and analytics tools combined with automation are working together to improve patient care by enabling more informed clinical decision-making, better data consolidation and analysis, and portal self-services.

Financial Services

Digital transformation is also allowing financial services companies to differentiate themselves in a highly competitive market.

In addition to the now ubiquitous mobile and online banking services, these businesses are already using AI and digital tools to make it easier for customers to manage their finances and strengthen the effectiveness of their fraud detection and prevention practices, making financial transactions safer for customers.