Digital transformation changes the way business gets done. It allows you to improve customer experience, enable better decision-making and offer game-changing efficiencies.
This article discusses the topic of digital transformation in more depth, including its benefits, examples, and strategy so you can learn how to add more value to each of your customer interactions.
Read on.
Digital Transformation Defined
Digital transformation (DX) is the process of integrating digital technology in all areas of a business, including marketing, sales, and service, fundamentally changing the way a business operates and delivers value to its customers. This can be done by creating new business processes or modifying existing ones.
In short, it’s a reimagining of business in the digital age.
Digital transformation is also a cultural shift that requires businesses to continually experiment and adapt in order to meet the ever-changing business and market requirements.
This results in a more agile and more intelligent way of doing business thanks to technologies such as artificial intelligence (AI), advanced analytics, and more.
There are certain shared themes to consider when embarking on digital transformation.
If you're looking to develop your own strategy for transforming your business so you can build closer relationships with customers and empower your employees, consider including the constants found in most existing case studies.
In such a case, your digital transformation framework would involve the following:
- Customer experience
- Operational agility
- Culture and leadership
- Employee empowerment
- Spend management
- Digital technology integration, etc.
Having said that, it's important to note that while there are common themes like the ones outlined above, digital transformation varies widely according to the specific demands and challenges of each organization.
Fortunately, there are a lot of online tools that are designed to provide you with the features to cater to all your digital transformation needs in one place, as shown in the example below from the Strikingly platform, which includes:
- Website building
- Domain name registration
- Social media integration
- eCommerce functionality
- Data, analytics, and reporting
- Blog creation functionality
- Built-in security
…and much, much more.
Digital Transformation Technologies
Technology is behind the need for digital transformation, and it also supports how organizations are digitized.
Here are some of the digital transformation technologies you need to be aware of if you are going to build a strong strategy for your business.
- Mobile Platforms: Mobile platforms allow businesses to conduct their work from anywhere, at any time.
- Cloud Computing: This technology offers businesses quicker access to software, updates, and new functionalities. It also provides access to data storage from wherever, whenever.
- Machine-Learning and Artificial Intelligence: When fueled by robust data programs, AI and machine learning provide businesses with insights that allow faster and more accurate decision-making in marketing, sales, product development, and various other strategic areas.
- Commoditized IT: This technology allows organizations to focus their resources (monetary resources, people resources, etc.) on the information technology customizations to differentiate the business from others in the marketplace.
- Automation: Automation technology can help you handle mundane or repetitive tasks a lot faster (and more accurately) than humans would. It frees up your time so you can focus on higher-value work.
There are other, additional transformational technologies that are emerging to help organizations work more efficiently to create and deliver products and services.
These technologies include things such as:
- Blockchain
- Edge computing
- Internet of Things (IoT)
- Social media marketing
- Virtual reality (VR)
- Augmented reality (AR)
- Online Course Platforms
… and more.
Why Are Companies Shifting Toward Digital Transformation?
More and more companies are shifting towards digital transformation. One of the main reasons for this is the lower cost of using digital marketing as opposed to traditional marketing channels.
Social media, in particular, is great for personalized targeting, lookalike audience targeting, and other powerful marketing features that allow you to connect with your ideal audience.
Here are a few other reasons why digital transformation is important for your business.
1. Lowered Costs of Marketing
Digital transformation is a great way to cut variable costs associated with marketing. No more wasted money on television and radio commercials, renting billboard space, or paying for print-based advertising.
From reducing overhead to accessibility and scale, digital marketing channels like websites, social media, emails, etc., allow you to transform your messaging and increase customer engagement to generate more leads while reducing your costs.
2. More Direct Interaction with End-Users
Digital transformation technologies like cloud computing, and AI allow businesses to transform processes across the entire customer lifecycle so they can interact with individual customers on a more personal level.
3. Diversity of Available Tools
In marketing, the main goal of digital transformation is to generate more customers for your business while spending less money.
Another reason why brands are shifting toward digital transformation is that it provides you with all the tools you need to attract, engage, nurture, and convert customers, giving you the chance to turn them into long-time loyalists. From making a logo to using a more human-like approach as part of branding, companies have lots of options available.
4. Simplicity of Operations
From data analytics and APIs to machine learning and other technologies, businesses can use digital transformation to simplify their operations for improved productivity.
Here are a few examples of how this is achieved:
- Social selling strategies (e.g. using social media as a customer service desk)
- Self-service platforms for more flexibility and convenience
- AI for powering chatbots to welcome customers and reduce wait time
- CRMs to encourage once-separate groups like sales, marketing, and service to collaborate
…and so on.
5. Pandemic-Related Concerns
In the wake of the global pandemic, it has become critical for businesses to adapt quickly to meet rapidly changing customer expectations, time to market pressures, supply chain disruptions, etc.
A lot of businesses have already started to put in place systems to ensure that they stay on top of all their operations post-pandemic.
According to recent statistics, spending on digital transformation technologies for digital transformation is expected to reach $2.8 trillion U.S. dollars by 2025.
As you can see, there’s a lot that’s possible with digital transformation, and the examples below will help showcase how some popular brands have leveraged this powerful process to experience phenomenal growth.
Examples of Brands that Embraced Digital Transformation
To help you understand the potential for technology to transform your business and help you boost your bottom line, take a look at these examples from companies that have successfully embraced digital transformation to adapt their businesses and processes in order to get the most out of their technology investments.
1. Netflix
Type of Digital Transformation: Process Transformation
Netflix is a great example of a company that successfully embraced digital transformation. The brand took a step back and revisited all its business processes, from internal systems to interactions with customers.
The brand asked game-changing questions such as "How can we change our processes to allow us to improve customer experience through deeper personalization?"
The company then went on to create a disruptive strategy for leveraging technology to improve its service.
What started as a mail-order service soon disrupted the brick-and-mortar video rental business.
After digital innovations made it possible for the company to implement wide-scale streaming video, it wasn't long before Netflix began to outpace production studios, traditional broadcast, and cable TV networks.
Today, Netflix uses digitalization to achieve things such as:
- Streaming video content directly to its customers
- Offering a growing library of on-demand viewing content at super-competitive prices
- Gaining unprecedented insights into viewers’ habits and preferences
The platform uses the data collected to inform everything from UX design to developing first-run movies and shows at its in-house studios.
This is a great example of the concept of digital transformation in action - leveraging available technologies to inform strategies for running your business.
2. Apple iTunes
Type of Digital Transformation: Business Model Transformation
Apple's reinvention of music delivery is yet another example of digital transformation. The company managed to do this successfully by focusing on changing its business model.
This is different from process transformation, the focus of which is on finite areas within the business.
Transforming the business model involves looking at the foundation of how value is delivered in each specific industry, which is the digital transformation tactic Apple used to change its traditional business model.
3. Amazon Web Services (AWS)
Type of Digital Transformation: Domain Transformation
As you've seen from the examples outlined above, digital transformation isn't a single all-encompassing entity.
Companies that experienced the most success are those that understand that there are different types of digital transformation, each of which can be leveraged to get the most from the process.
Amazon is a prominent example of a company that understands this very well.
The online mega-retailer's digital transformation came about via domain transformation. By launching Amazon Web services (AWS), the company went into a brand new market domain.
Today, AWS is the largest cloud computing service in a field formerly dominated by giants such as Microsoft and IBM. This is a very clear example of how businesses can use new technologies to redefine their products and services.
Domain transformation blurs industry boundaries and creates entirely new, nontraditional competitors, which is one of the reasons why domain transformation offers such excellent opportunities for company growth.
4. Experian
Type of Digital Transformation: Cultural Transformation
The result of digital transformation is a fundamental change in the way a business functions and interacts with customers. Very few brands showcase this concept as effectively as Experian.
The company uses technology together with processes and people to radically alter business performance and culture.
The organization redefined mindsets, talent, processes, and capabilities as part of a strategy to achieve successful long-term digital transformation. They created a culture of digital transformation based on a flexible workflow and decentralized decision-making process.
Over the past few years, the businesses experienced sweeping changes in all areas, including:
- Customer expectations regarding products
- Pursuing new business models
- Implementing new revenue streams
... and more.
This radical rethinking of how the business uses technology for cultural/organizational transformation is one of the reasons why Experian is one of the leading consumer credit agencies in the world.
3 Powerful Approaches to Digital Transformation
There are dozens of goals companies have in mind when integrating digital technologies in their business operations.
These include things such as:
- Enhanced data collection
- A better customer experience
- Stronger resource management
- Increased employee productivity
- Data-driven customer insights
- Stronger digital culture
- Improved collaboration
- Increased agility, productivity, and profits
- Increased market penetration for new products and services
…and many more.
However, there are only three main approaches when considering digital transformation for your organization.
They are as follows:
Approach #1: Confirm Proof of Digital Success
The majority of organizations have a mix of digital and non-digital solutions, which is why this is typically their first choice when approaching digital transformation.
By waiting for proof of digital success, organizations can focus on empirical results. For example, you might focus on using a tool like Strikingly to build a brand website first.
Only after you’ve successfully implemented the site as part of your strategy, can you then move on to the next part of your digital transformation process.
However, the disadvantage of this type of approach is the huge risk of remaining idle while waiting for your digital transformation to catch on because this gives competitors an advantage over you if their digital success occurs faster than yours.
Approach #2: Develop an All-Inclusive Strategy
Focus on getting your digital strategy as complete as you can from the very beginning.
This requires a well-developed long-term plan that focuses on altering the entire culture and implementing new innovations as quickly as possible.
The all-inclusive digital transformation strategy is significantly more expensive and comes with a lot of risks.
But, it provides great benefits for businesses with patience and the ability to withstand the risk.
Approach #3: Deliver Digital Scales Incrementally
This approach allows you to deliver benefits as your business moves toward a digital destination that is constantly changing after you've identified the initial target and routes.
Thalita Ferraz, owner of HerBones.com explains, “I had a small boutique clothing store in my hometown four years ago that wasn’t generating enough revenue to continue. After understanding how Shopify works, I adjusted my brand to start selling products incrementally online and within 6 months was able to make 80% of what I made the previous year from my brick and mortar location.”
As your business progresses, you will have to continually consider new inputs and lessons learned which will then be able to alter your digital goal, and sometimes even the path you take to the destination.
In other words, this approach delivers a solid, yet flexible digital strategy that evolves as the industry or market changes.
Conclusion
As you've gathered from this article, digital transformation looks different for every industry.
The type of strategy you use also depends on your company’s specific demands and challenges.
However, different strategies have certain things in common, and it all comes down to incorporating digital technologies into all business areas - and having the ability to adapt to constant changes in technologies.
Whatever your reasons for taking on digital transformation, whether it’s for basic economic survival, stronger resource management, or increasing productivity and profits, use the information in this article to help you get started making the most of your business processes for optimal results.
Over to you. Has this article helped you understand what is possible with digital transformation? And if so, are you ready to adapt your business to make use of this powerful process? Sound off below!
BYLINE:
Ron Stefanski is an online business expert and owner of OneHourProfessor.com, which has over 100,000 monthly visitors and helps other create an grow their own online business.
