Technology is here to change the modern workplace and entrepreneurs are ready to embrace it. Now more than ever, CEOs understand that customers are more receptive of tech-powered businesses and plan to make drastic changes to keep up.
Technology requires researching first https://sapioresearch.com/technology (Image Credit: Pixabay)
According to a recent IDC forecast, global spending on digital transformation technologies is on track to hit a record $2.3 trillion by 2023. Further research shows that 62% of CEOs ranked digital transformation as their main objective and 70% of CFOs plan to increase technology investments.
The importance of technology for the modern business is unquestionable. As more and more processes take place online, it’s important for managers to align their organisation to these new trends, but the numbers don’t always tell the full story. In spite of the hype behind digital transformation, the process can be riddled with challenges and confusion. If it’s not backed up by a solid strategy, digital transformation can run into roadblocks and do more harm than good. In fact, the latest McKinsey Global Survey on the topic reports that only 30% of digital transformations succeed and that sometimes even digital sectors such as telecom can stumble.
When done right, digital transformation can enable your organisation to compete with strong rivals, but redefining your entire business around this new concept isn’t easy.
Rethink your business model
What is digital transformation exactly? Although the definition can vary depending on the industry and the technologies used, in general, digital transformation means using technology to make business processes more effective and boost business agility.
“Technology” can include many things here, from cloud and Big Data to machine learning, IoT, and AI.
What most business owners imagine when embarking on a digital transformation process is that they’ll only need to slightly tweak their methods and add digital services to the traditional ones they were already using, but, actually, effective digital transformation means completely rethinking your business model and creating new, digital ways to do things from scratch.
A digital transformation doesn’t involve only the management or the IT department. It’s wider in scope and includes the entire company, so you will need to empower everyone to work in new ways. It doesn’t mean that you will change your mission statement, or the base of what you do. The values are still there, but the methods you’ll use to apply these values will be completely different.
Never skip research
If you operate in a traditional industry, all the possibilities of digital transformation can be very confusing. New technologies such as Big Data, robotic automation, and AI sure sound like they can change the world, but do you need them? Is it enough to migrate your business to the cloud and switch to a mobile-first approach, or should you go further? Technology requires researching first and if you want to make sure you’re using the relevant tools, you need to find out what digital products can benefit your business the most and implement them in a strategic way.
There are many variables to keep in mind here. Depending on the size and sector of your business and the products and services you sell, you will have different needs and requirements. Digital transformation might sound vague, but that’s because it’s not a one-size-fits-all solution. It looks different for each company, so don’t make fundamental changes without researching first.
Hire the right people
Your company always has important teams and employees and digital transformation doesn’t mean you should let them go and replace them with computers. However, you may have to hire tech-savvy leaders who can help you on your path from vision to execution.
According to McKinsey research, organisations that hired a Chief Digital Officer for digital transformation were 1.6 times more likely to be successful.
82% of leaders believe that the newly hired CDO played an important part in the digital transformation process and that they couldn’t have succeeded without them.
Even if adding someone new to the team comes with extra costs, keep in mind that your CIO alone may not be enough to handle the project and that they will need help integrate systems and services and exploit advantaged technologies. If you have a small organisation, the CIO may be able to take on the role of the CDO, but you should conduct a thorough analysis first to make sure you have the right qualified staff, who can:
- Design a digital transformation strategy
- Create valuable digital experiences
- Analyse digital trends and implement the ones that are relevant for your organisation
- Measure the ROI of digital transformation initiatives
Communication and collaboration are key
As the leader of the organisation, you will play a crucial role in the transition, as will every executive in the company. However, in order for the process to work, choosing the right technology and hiring the right people isn’t enough. You also need to maintain communication and collaboration across all departments and everyone should work together to achieve the common goal.
The CEO is the advocate for transformation and, in a recent survey, 84% of respondents agreed that he/she should be very engaged in the process. But it doesn’t stop there. In a study of successful digital transformation, 82% or organisations involved line managers and 73% involved frontline employees. Moreover, most CEOs said that if they were to start the process all over again, they would communicate more and involve more employees.
Digital transformation can be a long, challenging process and, for employees outside the C-suite, it can be scary too. One of the most common myths about digital transformation is that it aims to replace human resources with computers, so explaining to everyone what you are attempting to do and why can not only lift spirits but also boost productivity.
The bigger your organisation is, the harder this will be, however. In small companies with less than 100 employees, digital transformations are 2.7% times likelier to be successful compared to organisations over 50,000 employees, which is why it’s important to involve every manager and hire a professional team to handle this process seamlessly.