Digital transformation is a core element in business planning across every industry today. The phrase refers to the application of technology in a strategic framework directed toward achieving a company’s goals. Companies that succeed in this effort to become more digitally mature are those which combine strong leadership with agile adaptive patterns.
Technology Doesn’t Equal Innovation
As a basis for defining the concept of digital transformation, it’s important to differentiate this term from the foundational availability of technology. Technological innovations come and go, while digital is about strategy and business models. Advances in technology continue to facilitate unprecedented new capabilities. Engineers and visionaries across the globe are constantly pushing the limits of what’s possible, from robots and wearables to “mixed reality” environments and voice recognition systems. Each time a new technological frontier is crossed, the starstruck developers declare that the world is on the brink of a major transformation. However, technology only becomes disruptive when it can be directly applied to a company’s individual strategic framework. Otherwise, even the most dazzling new capability won’t be a good investment for that company.
Marketplace Forces Shape the Evolution of Technology
As time passes, the assortment of blue-sky inventions are gradually shaped by the realities of the marketplace. Some tech wonders are sidelined as fun but not cost-effective for real-world uses. Others may have narrow uses, supporting business models only within a highly specialized industry. Meanwhile, a handful of technologies become runaway successes almost immediately, because they fill an authentic need for a wide array of current commercial operations.
Applying Technology to Specific Business Goals
Depending on the trajectory of an individual company, a growing technological toolbox is available for meeting specific business goals. The quality and dexterity of these digital tools is constantly being updated, and staying fully aware of current options is one of the core offerings of digital strategy consultants. The transformation process involves a deep shift in an organization’s view of itself as a whole, as well as its position within an industry. Going digital involves a conversation among stakeholders throughout the company, from executives to marketing managers, IT departments to human resource professionals, sales teams to customer service representatives.
Disruptive strategies are being directed toward customer experience and internal processes alike, drawing on a swiftly evolving range of available technology. Below are a handful of these intriguing possibilities:
- New collaboration platforms and HR analytics are changing the nature of hiring, making it more personal and relying on big data to ensure that the best possible candidate is recruited.
- Cloud services provide more robust security and audit-proof compliance services for industries that handle sensitive client and patient data.
- Smart embedded devices are transforming the relationship between the physical and digital worlds, changing the nature of industries from insurance to energy to health care. The ability to receive and analyze digital information about the physical world is at the heart of deep change; one example among many focuses on insurance underwriting, which increasingly relies on individual behavior patterns rather than actuarial averaging.
- Fintech startups are disrupting the banking and finance worlds, instituting new services and moving funds seamlessly around the world.
- Real estate is being transformed by virtual reality walk-throughs for remote clients.
- Sophisticated analytics reveal new layers of actionable information about market segments and customer behavior.
- Retailers offer virtual reality experiences to in-store customers and give online buyers a personal connection to their products with augmented reality shopping apps.
- Beacon technology and geolocation apps allow stores to maintain a personal connection with their customers in real time.
- Social media networks combine with one-touch shopping and mobile simplicity to put products in customers’ hands within minutes or hours after initial contact.
- Personalization and omnichannel interactions with customers are becoming the norm, as machine learning and voice recognition systems streamline the customer experience.
The transition to digital is technology-driven and technology-dependent, but it’s not essentially about technology. It’s fueled by insights provided by analytics, but analytics alone don’t amount to innovation. In Centric Digital’s Playbook, a company’s business model is the foundational layer of all other criteria for creating a digital transformation framework. The topmost layer of this stack is the customer-facing experience, and that leads us to the next logical question:
Why is Digital Transformation Important?
All businesses are moving along the same vector, heading towards a digital future. It’s true of the world at large, and it’s true of every industry in the global marketplace. Furthermore, that digital future is currently being defined by just a handful of industry leaders — mainly Apple, Amazon, Google and Facebook. These massively successful innovators are setting the bar for consumer expectations. If the consumer encounters a new convenience from Amazon or Apple, they will expect to encounter similar streamlining from any other company they interact with. Regardless of budget size, all businesses are now subject to comparison with the frame of reference created by these market leaders. Agility and sophistication in this new ecosystem are critical for marketplace sustainability; businesses that resist the digital juggernaut will eventually fall by the wayside as they lose customers and credibility in this era of changed expectations.
Navigating Digital White Water
The flow of digital innovation is continuous and one-directional, similar to a swiftly moving river. Think of Individual companies as the rafts traveling down that river. They’re all moving in the same direction and the have the same goal: to get ahead of competitors in their particular category, without (financially) capsizing in the rapids. The question each company has to ask itself is: Are we paddling skillfully to get ahead, or are we just letting the current carry us?
Mistakes Companies Make
In an effort to stay financially afloat in technologically turbulent times, some companies feel that the safer choice is simply to wait and see where this intense wave of change ends up. They may consider their value proposition as being independent of the digital revolution, and it may seem as if remaining outside the evolutionary flow is a viable option. Whether this hesitation springs from a sense of exceptionalism, in which a company feels safe disregarding their competition, or merely from a lack of optimism — either way, it can be a devastating choice. Hesitant companies may feel they have a choice of whether or not to go digital, when actually no such choice exists. Instead, every organization must either navigate the digital currents and incorporate new efficiencies across the board, or risk their entire future by hesitating.
Digital Consultants Offer Insights on What’s Ahead
Centric Digital offers a specialized perspective of immersive experience in guiding companies through today’s technological revolution. We know the nuances of the digital transformation river per se, because we continually navigate it, in all kinds of economic weather, with all sizes and types of vessels. Our benchmarking process provides granular knowledge of the potential benefits and obstacles hidden around the next bend. Without the solid data derived from internal and external benchmarking, it’s challenging to develop a reliable strategy that can result in digital success. Digital consulting can’t remove every risk a business faces, but skilled consultants use insights gained from a digital-focused mindset to mitigate and clarify potential hazards.
Where Is Digital Transformation Headed?
This is a key question, and it has to be asked and answered on a continuing basis. Even the deepest experience base doesn’t make it possible to predict every development with absolute certainty. Technology is bringing rapid changes to society as a whole, and business predictions themselves are influenced by trending opinions. For example, a widespread conversation has sprung up about how automation will eliminate jobs — but an equally relevant conversation needs to develop around the jobs that automation will enhance.
Our collective inability to neatly pin down the future leads to some unease in the C-suite. Executives can no longer rely on the time-tested prediction tools they’re accustomed to, and they are being forced into new patterns of adaptation.
Disruption Means Redefining Roles
What’s clear is that doing things the old way will no longer suffice. Just a few quarters ago, some retailers still labeled themselves as solely brick-and-mortar merchants. Slipping stock prices and dire financial reports forced them to see themselves in a whole new light, and to ask themselves whether they even need physical stores at all anymore. With an appropriate strategy, these retailers can stay in the game by leveraging their brick-and-mortar assets to adapt to an immersive digital environment.
Companies are being forced to redefine the nature of a positive customer experience, and these redefinitions are being led by newly empowered customers. Internal operational standards have shifted as well, and digital solutions are streamlining logistical architecture. In some cases, the functions of HR, inventory, accounting and scheduling bear almost no resemblance to their traditional forms. Job titles and interdepartmental collaboration are undergoing seismic shifts.
Agility Is a Blend of Insights, Benchmarking and Planning
True digital transformation is measurable against the precise strategy called for by a company’s business model, and digital maturity means using technology to achieve specific goals in customer experience and operational efficiency. Digital is at the core of Centric Digital, and our playbook and benchmarking process supply a highly detailed navigational guide for companies in this swiftly flowing environment. To learn about how we navigate digital, you can read more about our playbook process here.