Digital Transformation - the new buzzword
It feels to me that everyone in both the private and public sectors in every region are being told they need to digitally transform their business. But what does it actually mean in practical terms?
There’s been a lot of research and analysis on companies that have had success in the digital creation and transformation of their businesses, and radically changed the markets they operate in. This has really captured my interest and I’m now leading a digital transformation programme here at MeetingZone, as I passionately believe it’s the right way to go for any business.
In this first article of a series, I wanted to share my thoughts and learnings with you - it’s a personal view and I’m sure not everyone will agree with me! It would be great to get your feedback on this.
What is digital transformation?
Well let’s look at what it’s not…It’s not technology per se. I believe it’s about a new way of thinking that forward looking businesses are embracing. Those that have done it successfully have transformed their businesses and their markets by reinventing themselves. They deploy the technology to disrupt traditional business models and deliver a better customer experience. Think Uber, Air BnB and Amazon for starters.
5 ways to achieve successful digital transformation
Professor David L. Rogers, in his book “The Digital Transformation Playbook”, identifies five focus areas where successful companies have changed the way they think and behave to achieve successful digital transformation. These are:
- Customers: In the digital age, we need to think of customer networks rather than customers as a mass market. Today’s customers are ”constantly connecting with and influencing each other and shaping business reputations and brands. Their use of digital tools is changing how they discover, evaluate, purchase, and use products and how they share, interact, and stay connected with brands.”*
This means we have to stop seeing the customer as just a target to sell to, and consider the networked customer as our innovation partner with the customer leading the way not the other way around. More about this in my next article.
- Competitors: In a digital world, the market landscape is changing and you need to think differently about who your competitors are. For example, Uber is not only a competitor to traditional taxi firms, but also to car dealerships in larger cities where people only occasionally need a car.
- Data: Successful companies have taken advantage of the huge amount of data now available. They gain a much faster and deeper insight into their customers than ever before.
- Innovation: Today it’s easy to test new products and services at low cost, and get instant feedback due to the technology available. Companies can “fail fast, cheaply” by innovation and experimentation, ruling out options that are not viable.
- Value: Digital technology is forcing us to think differently about how we can best create customer value. There’s far more choice today. Any business wishing to stay in the game needs to re-evaluate the value they bring to their customers. If they don’t, they’re in danger of being left behind, as digitally transformed brands will offer a better customer experience at a lower cost, for example Uber.
Breakdown silos and be agile
Learning from challenges we have faced to date, there are two changes in the ways of working I believe to be essential in a successful digital transformation journey for any company.
Breakdown silos: Make sure every part of your business is structured and ready to make fast decisions, involving all key stakeholders.
Be agile: Processes that enable fast decision making and execution/delivery of goods and services to market are crucial.
*Rogers, David L.. The Digital Transformation Playbook: Rethink Your Business for the Digital Age (Columbia Business School Publishing) (p. 7). Columbia University Press.