In the first article of this blog I want to focus the topic of Digital Transformation due to its current relevance on society in general and also to provide an overview on the subject, giving people and organizations the opportunity to understand the importance of this topic that is transforming how companies operate, as well as the way people work, relate, acquire goods and services and interact with public and private organizations.
We all heard this buzzword from articles, conferences or senior polititian and business players, but what does Digital Transformation mean?
“Digital transformation is the strategic adoption of digital technologies, used to improve processes and productivity, offer better experiences for customers and employees, manage business risk and control costs.”
Covering governments, corporations and also businesses created from scratch, such as the populars Netflix, Uber or AirBnB, the digital transformation points the way for businesses to improve their performance, so necessary in an increasingly competitive global market.
And if the reader thinks that this is just a trend or that it doesn’t apply in his area, it’s better to look the signs of change:
- Worldwide 3.8 billion people own a smartphone
- In Europe 48% of people use social networks daily
- 46% of all google searches look for local information, and 88% of consumers who do a local search on their smartphone visit or call the store the same day or the next day
- Ecommerce sales in Europe grew to 621 billion euros in 2019 and were set to be worth 717 billion euros in 2020 ( pre-covid estimations)
Consumer behavior increasingly shows a tendency to use digital tools when looking for a product or service or making a purchase. On the other hand, this increased digital presence offers the possibility of an unprecedented interaction with customers and partners, allowing to increase the visibility, reach and interaction capacity of your business.
And where to begin?
The answer to this question will vary depending on the size of the organization, the company’s business area and the level of digital evolution already reached, however there are several improvements common to the vast majority of organizations and which we detail below.
I leave a parenthesis here for large organizations, which need to carry out more comprehensive approaches detailing cultural and organizational aspects beyond the operational and procedural aspects. This article on Linkedin allows an overview of the domains of digital transformation at the level of large organizations.
In operational terms, we present the most popular digital transformation initiatives with proven results regardless of size or business area.
If your business is not present on the web this should be a priority. People must know through the internet: who you are, where you are, what you sell. Essentially your business or organization must be visible on search engines, social networks and other relevant digital spaces.
From this foundation you can leverage the web presence to other areas depending on the objectives and the type of business:
Promotion of your business online through initiatives that aim to promote your brand and attract potential customers.
The digital presence enables an unprecedented level of interaction with your customers and partners, allowing you to improve the customer experience, which in turn will increase customer satisfaction and the perception they have about your business. Leverage this proximity through social networks, forums or support channels.
Through digital presence you will be able to identify potential customers, developing information and interacting with potential targets through sales development techniques.
Consists of the transition from analog paper processes to digital processes, which in addition to efficiency and standardization gains will ensure the performance and quality of your business processes, given the ease of access, validation and treatment of information in digital systems.
This is probably the most approached digital transformation initiative, given that it was one of the first themes to be pointed out as an added value in the digitization of companies.
The first step towards this objective is the correct analysis and definition of business processes, in order to identify the areas and phases of each process that can be transposed to digital formats. In this way it is possible to implement the desired solutions, taking into account the following automation and integration steps.
Like the previous theme to increase the level of automation it’s necessary to identify and define business processes. Starting from this base, it is possible to analyze in detail the phases of each process to fit automation mechanisms that guarantee better efficiency, effectiveness and traceability, allowing to reduce operational costs and increasing productivity.
Automation solutions are diverse and vary in complexity and cost depending on the size and business area. Which ones will be right for your business will depend on the specific needs and requirements you have, however it’s possible to find automation solutions for all business areas, such as marketing, sales, production, finance and accounting or also generic process automation solutions.
Digitization and automation initiatives produce volumes of information that can and should be analyzed in order to extract knowledge, but these volumes of information, being allocated to specific areas such as individual information silos, create problems of efficiency and redundancy given their isolation.
Not all information can or should circulate freely through the various areas of the company for business reasons or even legal requirements in specific business areas. In areas such as health or legal areas, information silos are essential for containing confidential information, or setting an example in terms of business restrictions, a human resources area should only share information from a recruitment process when it needs to involve the person in charge of the area to be recruited, or a commercial area only involves production resources when you need to prepare a proposal or respond to specifications.
It’s in this context that integration systems are a key part in the production of knowledge and in the optimization of business processes, allowing the identification of relevant information for different business areas and sharing it with those who need it, guaranteeing the effectiveness of its employees at the same time as restricts sensitive information and ensures the collection of critical information to assess business performance.
Through the information collected in the previous processes, you can produce reports and business indicators such as KPI’s that allow you to obtain knowledge from all the information collected. This knowledge will give a more accurate and immediate view of your business, allowing you to identify points of improvement and making decisions with greater security, ensuring a strategic view of your business and allowing you to act in a timely manner to sudden changes or adverse events.
There are several other possibilities for digital transformation applicable to specific sectors of activity or inherent in the genesis of their own businesses, such as those already mentioned AirBnB, Netflix or Uber. It’s important to note that digital transformation is not just the measures previously identified, but a whole way of defining a business through technology.
And what risks are involved?
Changes of significant dimension to the way your business works result in risks that must be managed in order to achieve the intended objectives, however these risks can be safely contained as long as they are identified and controlled.
The risk of embarking on an investment with concerns that can get out of control or that does not translate into returns is something that is present in the mind of any manager, however in view of the evolution of the technological market it is also a risk that has become easily mitigated.
The expansion and diversification of the information technology market has democratized the offer of products and services, by bringing new subscription models such as Software as a Service, Product as a Service and Hardware as a Service that allow technological investments at very low costs without sacrificing quality or effectiveness.
In the past, company IT departments grew in order to enable the digital transition, requiring several resources to manage the systems and solutions acquired, however nowadays with the advent of service-oriented cloud-based solutions, investment costs and IT maintenance has become accessible, ensuring functionality and effectiveness without compromising security and privacy.
As a result of this growing technological adoption that occurs on a global scale by companies and consumers, the speed with which the IT market evolves is fascinating and I understand that often intimidating. At an almost daily pace, new concepts, products and solutions emerge where, especially for people outside the area, it’s difficult to identify whether they can be an asset.
The key to mitigating this risk is the adoption of knowledge through specialized partnerships. With an experienced and reliable partner like Sollogica it’s possible to deconstruct the complexity of these themes and identify the solutions that best suit the context and timing of your business or organization.
Or resistance to change, this is a phenomenon that comes from breaking routines that have been established many times over the years, or also fueling fears in the face of a new and unknown context.
Most important for the acceptance of changes in the business environment is the involvement of all levels of the organization, especially top management, in order to clearly establish the direction to follow and simultaneously setting an example for the remaining employees.
Another way to mitigate this risk is to ensure a gradual transition, identifying the critical transition points and ensuring that they are met without causing radical changes in the employees’ daily lives.
I hope that at the end of this article the reader will have an improved perception on the topic and it’s main initiatives. If you want to know more about the topics included in this article, reach us through the available channels.