Like it or not, every company is now a digital company. Technology is so ingrained in society that employees, clients and customers have become accustomed to its presence and the advantages it brings
At the same time, businesses of every size and industry are harnessing new technologies to drive competitiveness and growth, while those reluctant to change are getting left behind.
As business leaders wake up to this reality, the concept of “digital transformation” is becoming central to their strategy.
Technology is capable of transforming businesses with operational efficiency, increased productivity, effective communication and collaboration, and more, yet many IT implementations fail because of unclear processes and objectives. Digital transformation seeks to remedy this by clearly integrating technological improvements into every aspect of the organisation.
Although the term digital transformation is better known in enterprise-level organisations, the concept can be successfully applied in small-to medium-sized businesses. The methodology identifies and prioritises areas for improvement and provides a consistent framework to maintain those improvements.
We firmly believe that all businesses are better served by taking the proactive approach to digital transformation, before they are forced to by competitors or regulators.
What is digital transformation?
Digital transformation (also known as DX or DT) is the integration of digital technology into all aspects of an organisation — including its people, processes, and tools — resulting in fundamental improvements to the way it operates. This includes adopting digital tools and processes to replace non-digital ones, as well as updating existing technology with new advancements.
The broad goals of digital transformation are to improve efficiency, enhance operations, and drive innovation. In practice, a digital transformation strategy must be built around an organisation’s specific goals, challenges, opportunities, and culture. It should produce sustainable improvements, such as higher ROI, greater productivity, automated processes, or better customer experiences.
Some examples of digital transformation include increasing the efficiency or effectiveness of operating systems and applications by moving to cloud servers and Technology-as-a-Service (TaaS); increasing logistical efficiency by adopting an internet-of-things (IoT) inventory system; using big data analytics to identify opportunities and inefficiencies; and decreasing training costs by educating employees using digital tools.
Why digital transformation is important
Digital transformation requires a documented and consistent framework to improve an organisation’s performance through selection and implementation technologies. When properly executed, digital transformation can help businesses achieve their goals, sustain improvements, and remain competitive.
Digital transformation identifies and prioritises areas for improvement
Digital transformation is not about investing in every new technology; rather, it’s about strategically identifying and prioritising areas for improvement based on the needs and goals of the organisation, then leveraging the most appropriate technology to meet those goals.
This enables business owners to make smarter decisions with their resources. For example, instead of investing in software that won’t be used or wasting time and money maintaining out-dated legacy systems, digital transformation encourages businesses to identify the investments that will produce the most meaningful results.
A business might focus on employing technologies to automate repetitive tasks or online collaboration tools to facilitate productive remote work. For those in ecommerce, tools that enhance payment security and customer experience are likely to take precedence. And for industries dealing with highly sensitive data, security and data backup will be a priority.
Digital transformation provides consistency
Digital transformation provides a consistent methodology for assessing and maintaining the efficacy of processes, people, and tools. It involves constant iteration and improvement to ensure all elements continue to operate effectively and in harmony over time. This process of continual assessment and improvement helps businesses track their successes and failures, adapt quickly, and cut their losses.
For example, this process will highlight if a new software program is not being utilised. The cause can then be investigated, be it a lack of training in how to use the program, an absence of oversight, or simply that the program is not fit for purpose. The business can then adapt accordingly by providing user training, assigning someone to manage the program and its adoption, or replacing it with a more appropriate tool.
Digital transformation provides a holistic view
Digital transformation gives a high-level overview of business needs. Rather than looking at costs and benefits in isolation, it considers them in relation to past, present, and future outcomes. Here we are talking about things like the compatibility of different technologies and processes; cross-functionality between different departments; and security benefits, including risk management, business continuity, and data protection.
For example, the cost of migrating data to the cloud and maintaining backups can be higher compared to leaving data on a physical server. However, the benefits of moving to the cloud far outweigh the upfront costs. These include the security of offsite storage, improved operational agility, productivity, and remote collaboration thanks to cloud-based systems; scalability; and the elimination of hardware maintenance and obsolescence overheads.
Optimising your business technology also requires new mindsets and behaviours. As we have already touched on, digital transformation takes this into account by establishing IT processes, identifying people to manage these processes, and ensuring adequate training is provided to facilitate adoption of new technologies across all departments. This ensures that technology investments are implemented and utilised to their full potential. A comprehensive digital transformation strategy also sets organisation-wide hiring goals based on the need for specific skill sets to implement and manage new technologies.
In addition, digital transformation encourages cultural and behavioural changes, such as increased collaboration and calculated risk taking. These can be reinforced through formal mechanisms or by adopting new ways of working, such as an open office environment.
How to get started
Most business leaders want to know which technologies will increase their revenue and lower their expenses. To begin forming an effective digital transformation strategy in your business:
- Identify your business goals so that technology investments can be appropriately aligned.
- Assess your digital maturity to develop an understanding of where you are in the transformation process and to uncover gaps in your current strategy.
- Schedule a business improvement working session. Skilled as they may be, in-house IT teams usually lack perspective on business operations as a whole. You should therefore consider enlisting a digital transformation specialist to help bridge any gaps in your digital strategy.
To develop a successful digital transformation strategy, address the following three essential pillars
Investing in new technologies is pointless if no one is capable of utilising them. That’s why people should be central to any digital transformation strategy. To ensure the successful adoption of technology, follow these steps:
Get the right people in the right roles
Before investing in new technologies or processes, it is important to ensure there are staff available to manage them.
Each tool/system and process should have an owner responsible for training others and updating procedures. The owner should be defined by role rather than name, so that the responsibility passes on if the employee changes positions or leaves the company. We call these process owners ‘business process leads’.
By assigning business process leads with the right skill sets, not only is someone accountable for and capable of implementing the procedure, they also train other team members. This ensures that all team members are more likely to be trained properly and adopt the process successfully.
All employees who are expected to use specific tools and processes must be given adequate training on how they work and how they are used within the organisation.
Each job role should have a set of procedures assigned to it that are introduced during new employee onboarding. Training should be standardised across departments to ensure consistency, and should be carried out or overseen by the relevant business process lead.
When training a new employee, the business process lead should follow documented company procedures. Not only does this maintain consistency, it allows them to alter the procedure documents in real time if current practices have changed or clarifications are required. This keeps processes alive and relevant.
Training should not be a set-and-forget process. As technologies change or get replaced, training needs to be updated. Employees should revisit training on a regular basis to stay fresh.
To establish the effectiveness of a tool or process, employee output should be measured regularly. This requires setting KPIs for critical business processes. KPI success/failure rates enable inefficiencies to be quickly identified and addressed, ensuring continual improvement. For example, if a service, product, or workflow is under-performing, the reason can be investigated to determine if it’s from lack of training, lack of process, or lack of usefulness.
The digital transformation framework provides new, improved ways of doing things. These could be digital tools that help people collaborate, give insights into client/customer behavior, automate marketing and sales, or improve nearly any other business function that used to depend on manual processes. For people to utilize these tools effectively, the processes need to be established and communicated effectively. To achieve this:
To train their employees, many organizations rely on verbal communication or written documents that are hard to find or follow. Providing unambiguous procedure documents, training tools, and checklists not only improves consistency across the organization, but saves time by streamlining training and facilitating the delegation of repetitive tasks.
These documents should be clearly titled and made easily accessible to everyone who needs to reference them, for example by storing them in a dedicated shared folder in Sharepoint. They should also follow a set naming convention that includes the business process area, a simple description, and a version number; this makes it easier for employees to locate the relevant documents.
Update processes regularly
As well as introducing new employees to process documents, existing employees should be reminded of procedures regularly through ongoing training and updates. This ensures that processes remain fresh.
As new needs arise, processes will inevitably change. To ensure training procedures, process documents, and checklists remain current and accurate, they should be continually refreshed. Processes should be regularly revisited in team meetings and adjusted on the fly when inaccuracies or inefficiencies are noticed. This ensures that processes and documents are always improving and becoming more streamlined.
To promote consistency, standardized process documents should be shared and implemented organisation-wide. When changes are made to documents and procedures, they should be communicated to the relevant teams. A change log will ensure documents are updated accordingly and clarifications can be made when necessary.
As well as assigning an owner to each process, as mentioned above, the roles and business areas impacted by the procedure should be listed in the documentation. This enables standardization across multiple departments. When updates are made, it ensures the relevant people are notified.
As we have seen, new digital tools are not the only element of digital transformation, but they still form an integral part of it. The challenge here is to successfully bridge the gap between new and existing technologies to produce the best results. To do this:
Fully utilise existing tools
Most organisations do not use their existing technology investments to their full potential. Digital transformation should start with creating an inventory of existing software and hardware and analyzing whether they are being fully utilized.
For example, Microsoft 365 features dozens of applications, yet many businesses only use a few of these, such as Excel and Outlook. For organisations seeking digital transformation capabilities, their existing Microsoft subscriptions will contain many untapped resources. Examples include the collaboration and remote-work potential of Sharepoint, Onedrive, and Teams.
Select the right technology
Too often, companies invest in the latest technologies without considering how these tools fit with their existing infrastructure, how they will improve their operations, or how they will be implemented using people and processes.
To avoid this, it is important to start by establishing the priorities of the business. Tools should then be selected based on real business needs, such as hitting goals and resolving pain points. Again, setting and reviewing KPIs is extremely useful.
For example, if improving customer experience is a priority, then a CRM system such as Salesforce or Hubspot is a wise investment. A CRM not only helps to understand and address customer needs, it can shorten sales cycles, automate repetitive tasks, improve marketing strategies, and increase retention.
Establish expected ROI
Every investment should start with ROI goals, and this is no different for technology. Business owners must take a holistic approach to assessing the ROI of new tools. This should encompass a tool’s potential time and cost saving benefits, productivity gains, compatibility with existing tools and processes, and the amount of training it will require.
As an example, the initial cost to implement artificial intelligence and machine learning technologies may be high, but the benefits can be far reaching. The ability to automate processes will not only save valuable employee time, it could negate the need for costly new hires. AI can also be used to gain actionable insights into business data, which can result in improved performance by identifying inefficiencies and opportunities that would not otherwise be recognised.
Assembly helps businesses take a proactive approach to digital transformation. To find out how our digital transformation services can enhance your business talk to one of our team today to learn more about our capabilities; how we’re bringing people, business and technology together; and what this means for you.