No matter what industry sector you work in, you will more than likely be familiar with the term “Digital Transformation.” Or, you might be experiencing it first-hand via a large-scale strategy within your organization. But, what exactly does it mean?
The transformation changes the way existing processes are done in order to achieve a competitive advantage.
Forward thinking companies are re-imagining how they bring together people, technology, and processes to create value, efficiency, and maintain a competitive advantage in an increasingly digital-first world.
In 2021, as it relates to Digital Transformation:
- Faster Implementation Implementation is happening faster.
- Becoming Digital Technology is impacting businesses in more meaningful ways, making “becoming digital” a priority.
- Technology-Led Disruption Many industries and many businesses are facing
Technology-Led Disruption, or soon will.
“The investment in these initiatives is expected to grow at a compound annual growth rate of 23% from 2019 to 2025, with a market spend of $3.3 trillion in 2025.” (Research and Markets, 2021)
“91% of Companies are engaged in some form of digital initiative. 50.4% of companies express a positive outlook about technology disruption.” (Gartner Group, 2021)
The investment in these initiatives is expected to grow at a compound annual growth rate of 23% from 2019 to 2025,
with a market spend of $3.3 trillion in 2025
Companies are
engaged in some form of digital initiative
Companies express
a positive outlook about technology disruption
These activities can be very far-reaching or can be very focused and specific. It begins with stable, secure, intelligent systems. The focus includes Employees, Customers, Operations, and Product/Services.
Three of the Top Digital Transformation Priorities Include:
The Importance
of Digital
Transformation
Don’t be fooled into thinking that Digital Transformation is merely a trend because it is far more than that. You see, Digital Transformation and strategy are helping to set new standards of best practice in industries of all types, and so elevating companies across the world.
Digital Transformation is also helping to bring businesses into the modern-day. In our interconnected society, it only makes sense to look ahead and think digital-first.
And, if the Covid-19 crisis taught us anything,
It’s that digital adoption is a necessity in this day and age.
It provides us with the infrastructure required to sustain everything from global commerce to the day-to-day of working individuals during unprecedented times.
Any organizations that aren’t at least starting to work on their Digital Transformation technology strategy are in danger of getting left behind.
89% of all companies have either already adopted a new, digitally-focused business model or plan to soon.
Resultantly, it is becoming increasingly difficult for those that haven’t adopted a Digital Transformation strategy to keep any sort of competitive edge.
How Digital Transformation Is Driving Organizational and Client Experiences
As the industry changes at an unprecedented pace, Managed Service Providers (MSPs) must evolve more rapidly to keep up. Whether it is Security, Cloud, Data, or even AI, the industry has never seen the requirement to address new service paradigms so quickly.
More and more businesses are seeking support in how to build an IT infrastructure that is future-focused and innovative.
With a solid Digital Transformation strategy, businesses can understand their target market in more depth, engage more widely, and go the extra mile for the people they serve. In other words, it affords them opportunities to give their clients more of what they want and need.
So, it’s little wonder that companies who have already invested heavily in Digital Transformation have seen such impressive growth rates, including:
Why Is Digital Transformation So Critical in 2021 and beyond?
The shift towards Digital Transformation has been ongoing for several years now. However, 2021 looks to be particularly critical for companies moving towards a digital-first business model. The primary catalyst for that is simple: the coronavirus crisis.
model
Looking back over the worst of the pandemic, it’s clear to see just how fast the pace of change was accelerated as a result of restrictions.
Now, we are far further ahead than even the most ambitious thinkers could have predicted.
Resultantly, there is now a cavernous gap between those that spent time building a Digital Transformation strategy prior to the pandemic and those that did not make it a priority.
As such, 59% of companies that haven’t yet started building a Digital Transformation strategy fear it might be too late.
In the coming months, we are likely to see some immense successes and devastating failures due to the variances in how companies prioritize building and implementing a Digital Transformation strategy.
Digital
Transformation
Guide
Now that we understand why Digital Transformation is so significant, it’s time to have a closer look at how it works.
From the business models that drive its implementation to the technologies that underpin its application, here’s all you need to know about Digital Transformation and strategy in practice.
How Does Digital Transformation Work?
As we have seen so far, digital transformation processes are:
- Competitive Landscapes Changing competitive landscapes across industries.
- Extraordinary Circumstances Helping companies to adapt to extraordinary circumstances.
- Customer Experience Driving customer experience.
- Growth In The Organizations Stimulating growth in the organizations that make good use of them.
But, before any company can dive headfirst into creating a Digital Transformation and business strategy, whether they be a small business or a global enterprise, it’s important to understand the various different forms of Digital Transformation.
There are, according to the experts, four different types of Digital Transformation. For a company to ensure long-term success, it will have to address all four types and consider where (and if) each might fit into the overall business structure.
The four types of business digital transformation include:
Artificial intelligence (AI) and Digital Transformation Technologies
Technology is central to Digital Transformation because, without the right tech to drive them, companies are unable to implement new processes. And, without those new processes, there can be no competitive edge, no real innovation, and no means of continuing growth as the years go on.
Crucially, though, we’re not just talking about desktop computers and new printers.
These include – as mentioned above – big data, AI and ML, and cloud computing.
It is these sorts of technologies that have the power to completely overhaul a business for the better. Here’s a little bit more about them.
- Why Are Data & Analytics Key to Digital Transformation?
- The Role of Big Data in Digital Transformation
- The Role of AI and ML in Digital Transformation
- The Role of Cloud Computing in Digital Transformation
At the heart of many of the following technologies is one crucial thing: data. In many ways, digital transformation is bringing about a better use of data by companies as a means of delivering enhanced products and services. This means improved data collection and analysis.
With every person generating around
1.7 Mbps
every second
With every person generating around 1.7 megabytes of data every second, any company that turns to big data as part of its digital transformation strategy will be able to offer a far more intuitive service to consumers.
The term “big data” refers to the huge sets of data that are collected each day by an organization.
Due to their volume, these data sets tend to be too complicated for traditional technology to handle effectively.
But, with new data processing methods, companies can analyze immense amounts of complex information relating to their consumers. What they extract from that analysis can help them to better personalize their services, adjust quickly to customers’ needs, and predict the future behavior of their target markets.
Artificial intelligence (AI) and machine learning (ML) are pervasive forces even beyond the corporate world. However, it is in business that these two technological solutions are most effectively used.
AI and ML provide companies with the basis for their most efficient and innovative tools. For one thing, they allow businesses to more quickly, effectively, and accurately analyze data in a way that helps to solve existing problems or inefficiencies. They can also help with the design and delivery of new processes and systems.
And, with AI in particular, the simulation of human intelligence allows for an improved customer experience, without the need for additional people power behind the scenes.
Cloud-based infrastructure is key to growth and flexibility. With cloud computing, increased data storage, computing power, and other systems resources are available on-demand. This gives businesses an increased opportunity to expand their offerings and scale the organization as needed.
It also helps to prevent the wastage of unnecessary, less efficient computing resources. Investments can, therefore, be put to better use.
Digital Transformation Managed Service Provider
Implementing a Digital Transformation strategy is not easy, especially for smaller companies that operate outside of the tech world. That’s why Digital Transformation managed service providers (MSPs) exist, to help make the strategic execution of a best-in-class strategy all the more achievable.
The best MSPs will know how to build a Digital Transformation strategy that innovates and elevates. They will take the time to understand your business to ensure high-end financial performance and operational maturity are achieved.
As such, businesses that feel as though a complete Digital Transformation is out of grasp due to inexperience would do well to reach out.
Digital
Transformation
Strategy
So, we know just how critical the role of technology is in Digital Transformation. However, you might have heard it said that “strategy not technology drives Digital Transformation.” And, in many ways, that’s true. Without a strategy to guide the implementation of new tech, there’s no way you’ll see the results you’re expecting.
So, companies would be well advised to start building a Digital Transformation strategy if they haven’t already. Those that do stand to save money, boost their revenue, and improve customer experience exponentially.
While these signs provide a good indication that you need to implement a Digital Transformation strategy soon, ideally you shouldn’t let things get to that point.
Leave it too long, and you might find yourself driving digital innovation as a means of filling gaps rather than to elevate something that is already successful.
However, if you’re unsure whether it’s time for you to shift towards a digital-first strategy, there are several key warning signs that you can look out for:
- Colleagues across the organization are growing increasingly frustrated with outdated systems and a lack of efficiency in their workflows.
- You can not service clients in a way that meets the growing market demands.
- You’re losing business to competitors due to inefficiency and outdated processes.
How to Build a Digital Transformation Strategy
There are three necessary steps you’ll have to take when building a Digital Transformation strategy from the ground up. They are briefly summarized in the following Digital Transformation strategy framework.
STEP1 Assess Your Organization
Take a good hard look at how your company is performing in all areas, from culture and colleague collaboration to current processes and operations and customer engagement.
Only once you know your jumping-off point you can determine where you need to go next and how you can get there.
STEP2 Set Goals that are aligned to
Company Strategy
First, gain clarity on what the company is trying to accomplish by way of strategy.
These are Business Goals. Digital Transformation is at the intersection of Business Strategy and Technology Strategy.
Following your company’s current technology infrastructure assessment, you should set tangible goals for your organization in how to build a more advanced and comprehensive strategy.
These can be milestones that you aim to hit at both short term and long objectives. The reality is that Digital Transformation is a journey, not a destination and a clear road-map that is consistently updated is a critical success factor.
Once you have your targets laid out, you can start to identify any areas that may hold you back. These relate to people, process, and technology.
STEP3 Create a Roadmap
Now that you understand what your goals are and what needs to change, it’s time to create a Digital Transformation roadmap. This should detail the phases that will take you from where you are now to where you want to be, with milestones that will help you stay on track.
You will likely need to include information that includes, but is not limited to:
- The new technologies The new technologies you want to introduce.
- Training Timeline A training timeline that will get all employees up to speed with the new infrastructure.
- Transition to new processes When and how you will transition to new processes.
What Is the Best Model for Digital Transformation?
It will be up to you to determine the best model for your business’s Digital Transformation strategy. There is no one-size-fits-all approach. Just remember the four different types of Digital Transformation that were outlined earlier if you’re unsure of where to focus. They are:
Cultural/organizational
transformation
Business process
transformation
Business model
transformation
Domain
transformation
How to Implement a Digital
Transformation Strategy
Planning your digital business transformation strategy is one thing, but implementing it successfully is an entirely different thing. It requires a massive overhaul of an entire company’s way of working. So, you have to be organized and ready to innovate every step of the way.
And, again, no one approach works across the board. Different businesses and industries will have different goals.
Just bear in mind that digital-first companies are 64% more likely than their competitors to reach those goals.
There are, however, some general rules that companies developing a Digital Transformation strategy should follow when they begin implementation. They are:
Ensure the entire organization is involved in and educated on the process
Make changes from the bottom up
Encourage collaboration across departments
Get the right people briefed and ready to implement each stage of the roadmap at the right time
Rely on the expertise of people in the company or external MSPs, particularly if you feel your organization is ill-prepared to carry out a Digital Transformation strategy
Why Are
Businesses
Implementing
Digital
Transformation?
There are so many different reasons for companies to implement a Digital Transformation strategy. They range from organizational and structural benefits such as increased productivity and cost-efficiency to measurable improvements in revenue, engagement, reach, and more.
For example, it has been found that digital-first firms are 26% more profitable than those that have yet to make the switch. Similarly, 56% of CEOs in 2017 began to see an improvement in profits just a few months into their Digital Transformation.
Digital-first firms
More profitable than
those that have yet to
make the switch
CEOs in 2017
began to see an improvement in profits
However, the benefits of Digital Transformation strategy implementation will vary depending on the sector you are in and the targets you’re aiming to hit.
Here’s some more information on the specific benefits for different sectors:
Healthcare is one of the industries that is really benefitting from the introduction of digital-first processes.
In this often-overwhelmed sector, AI-enabled medical devices, telemedicine, and digitized health records can help to streamline sensitive processes and free up valuable time for staff. As a result, with a Digital Transformation strategy healthcare providers can offer patients:
- Increased access to services, whether they take place in-person or online
- Care that is better coordinated, more intuitive, and kinder to the patient
- Better tools for the identification and self-management of conditions and their symptoms
Effective Digital Transformation and strategy in the financial sector can help to improve consumer confidence in how their data and money is handled. This has to do with the fact that a digital-first approach:
- Can improve security measures, allowing for the increased protection of sensitive information and valuable assets
- Encourages faster and more accurate operations
- Allows organizations to more readily adhere to regulations
- Allows organizations to offer a wider range of money management tools to consumers that can easily be accessed on smartphones and computers
That’s why Digital Transformation is such a big deal in financial services, with 92% of finance leaders having already begun their transition to a digital-first way of working.
The world of manufacturing is also experiencing a shake-up thanks to Digital Transformation. The introduction of smart manufacturing to the sector has brought with it fully integrated IT systems, which:
- Are highly adaptable
- Can respond to changes in real-time
- Create the opportunity for more intuitive project management
These systems are put to good use in areas such as supply and design. They can help to reduce costs while improving performance and productivity at the same time.
While in many ways a very traditional industry, organizations within the legal sector are experiencing a large-scale Digital Transformation.
The manual processes that once powered the sector are being replaced with streamlined digital workflows and faster service delivery. As a result, things like document automation, electronic filing, and remote hearings are becoming the norm. The benefits are as follows:
- Reduced wait times for clients expecting documentation, scheduled hearings, or results
- Smoother and more accurate filing of important documents
- Increased security for sensitive information
According to a 2020 study, around 33% of accounting teams spend up to 75% of their time on repetitive, menial tasks. But, with a Digital Transformation strategy, accountants can shift their focus to more valuable, strategic work.
As accounting workloads increase, efficiency becomes more and more vital. So, new software that can take care of many of the necessary but time-consuming tasks is being implemented across the sector. This software:
- Reduces the need for accountants to build reports manually and creates more time for analysis
- Allows accountants to make better, more informed decisions
- Gives consumers new ways of engaging with firms
Government Digital Transformation strategy implementation is happening in countries across the world, and the United States is no exception. The benefits for the public sector include:
- Better cross-departmental integration and collaboration
- Increased transparency
- The ability to be more innovative and intuitive
- Faster service delivery
Given that governments are so vast and their remits are so varied, the sort of adaptability that comes with implementing a Digital Transformation strategy is desirable. As such, around 60% of governments across the world are currently developing their strategies, while 13% can already be considered digitally mature.
Digital Transformation for SMEs
There is a misconception that Digital Transformation and strategy implementation are only for larger enterprises. In reality, that couldn’t be further from the truth. New digital processes are changing the game at all levels. So, no matter a company’s size, a shift will be necessary if they want to remain competitive.
These are the sorts of benefits that could lead smaller businesses to expand further down the line.
However, while fewer SMEs are making the most of new tech, the ones that do really see the benefit. According to McKinsey, companies with fewer than 100 employees are 2.7 times more likely to report success with their Digital Transformation strategy than those with more than 50,000 employees.
Success with their Digital Transformation strategy
Clearly, then, becoming forward-thinking and digital-first is worthwhile, regardless of the scale of your operations.
What Is the
Future of Digital Transformation?
Digital Transformation has been happening for years now. But, more and more companies are starting to catch up with the bigger players. Now, countless enterprises across different industries are taking the first step on their Digital Transformation roadmap.
As the playing field levels for many digital-first businesses, one of the first things we will start to see is the ones that hesitated fading into obscurity.
Beyond that, there are other, more positive trends to look out for over the coming years. Here are some of the biggest:
You can ignore all of the disinformation about technology taking people’s jobs.
What digital innovation does is create new, more valuable jobs within previously overstretched organizations. Technologies such as AI and ML can take over the more long-winded manual tasks, making space for employees to analyze, develop, and create.
For corporations and consumers alike, smart technology is likely to become increasingly significant. For starters, people at home can soon expect easier access to goods and services of all types as smart devices keep getting smarter. This might include everything from buying a product to attending a virtual doctor’s appointment.
And, in the case of corporations, the data provided by smart devices could offer brand new opportunities for more effective marketing.
Partly driven by the increasing popularity of smart technology, personalization is already becoming a big trend. We can expect it to continue its rise as companies become better equipped to handle large, complex data sets.
91% of consumers say that they are more likely to shop with brands that offer personalized services and recommendations.
Therefore, the companies that harness machine learning, cloud computing, and big data as a means of making that happen have the greatest chance of becoming industry leaders.
It looks as though we’ll be able to say goodbye to subpar services in the near future.
As competing companies implement their own Digital Transformation strategy, an improved customer experience will become the norm. Companies that cannot deliver will likely be expected to adapt or risk failure.
Digital
Transformation
Consulting
There is an awful lot to be said about the power of Digital Transformation. However, there is also an awful lot to be done if businesses want to implement a Digital Transformation strategy successfully.
As such, companies that do not have the expertise in-house would benefit from engaging with Digital Transformation consulting services.
High-quality MSPs can ensure that only the most up-to-date infrastructure is employed, and in areas that have been identified as problematic or in need of improvement. As a result, your company will be in a better position to reap all of the available benefits when your Digital Transformation strategy is put into action.
We hope you enjoy reading this article
If you want to learn how New Charter Technologies can help you with MSP services, book time with us today.
