Tips to Accelerate Business Growth Through Digital Transformation
There is no question that digital technologies — including everything from advanced analytics, automation and cloud-based applications to social media — are disrupting the way we do business by pushing change at an exponential pace.
But despite the “digital” moniker, there is much more to digital transformation than just technology.
At Bridgepoint Consulting, we are seeing three key factors emerge to drive digital transformation for our clients: enabling technologies, rapidly accelerating business change and a tech-savvy workforce.
What is digital transformation?
Digital transformation is the process of implementing new technologies across every level of your business in order to streamline your operations, drive more efficiency and save time.
Why is digital transformation important in growing your business?
Businesses that develop a well-considered strategy to address and incorporate digital transformation will be best positioned to grow and thrive in today’s rapidly changing and highly competitive environment.
3 Ways Digital Transformation Can Accelerate Your Business
1. Digital transformation allows you to enable better technologies
True digital transformation does more than just create an electronic version of legacy processes or help companies keep up with technology trends.
When implemented thoughtfully as part of a larger strategy, digital transformation can help companies address growing pains, unify customer and process data and speed time to market for new products and services.
Cloud-based applications that support sustainable growth
As clients begin to experience higher volume, they often discover that manual processes simply stop working. In many cases, it’s not just that existing systems can’t support growth, but actively prevent it.
Many also find that the cost per transaction of manual processes becomes too high, making it impossible to compete with more digitized and automated rivals.
Cloud applications offer the scalability and flexibility to address these issues. These always-on, always-up-to date apps are available anywhere there’s an internet connection, and make it possible to rapidly deploy reliable new services as needed to meet demand.
Many are also industry-specific, built to handle the privacy and security needs of healthcare organizations, for instance, or the compliance and reporting needs of finance or energy companies.
The power of high-speed integration capabilities
While the customer expectation may be that data entered as a sales order rapidly flows right through to a company’s financial database and shipping system, this often isn’t the case.
Most companies are still dealing with at least two large enterprise applications, and some may have an environment that requires cloud, mobile and on-premises systems. As a result, they also struggle with siloed or unreliable data and cumbersome reporting processes that may only make critical financial data available on a monthly basis.
These cloud-based integration platforms can connect existing CRM and ERP systems with a range of different business systems and third-party applications and APIs.
The result is the ability to align data across systems, giving executives a single, comprehensive view of accounting, sales and operational information – and the ability to make fact-based decisions in real time.
Drive efficiency through Infrastructure as a Service (IaaS)
Similarly, gone are the days of ordering a new development server, waiting weeks for delivery, and going through the effort of connecting, powering and configuring it.
With IaaS, developers can spin up a new server instance in minutes to rapidly build, test and deploy new services or applications. IaaS is almost infinitely scalable, making it easy to respond to shifting seasonal and customer demands.
And as with other digital technologies, IaaS allows businesses to shift their focus from infrastructure to applications and process enablement – empowering system administrators to become business analysts.
2. Digital transformation causes accelerated change in business
Another major driver for digital transformation is the need to adapt and evolve as competitors enter the market, to grow through acquisitions and mergers, or to expand into new business.
How digital transformation spurs organic growth
More and more companies now start up virtually in a cloud environment and rapidly develop a global focus. This speed is made possible by the ability to inexpensively test and launch disruptive new technologies in the cloud.
It also drives the need for businesses to implement continuous testing and development cycles that can respond to customer feedback and emerging issues in near real time.
To keep pace with rapidly moving new companies, businesses also must move away from a cost-cutting mentality to a focus on building growth and expanding into international markets.
How digital transformation bolsters mergers and acquisitions efforts
In this trending strategy, companies (often with private equity involvement) move into new markets by buying multiple software or services companies and bundling them on what the Harvard Business Review calls “new growth platforms”.
This practice moves so quickly that it is not unusual to see a company add two or three entities within months while we are working on their digital transformation project.
How digital transformation helps with expanding to new markets
As businesses encounter the growth limits of their current markets, they are using digital technology to test new business models, implement them and quickly scale.
Current cloud-based applications, IaaS and other components of DX enable them to leverage existing technology, add new applications or services, or move into e-commerce.
3. Digital transformation allows you to thrive in the new digital workplace
Digital transformation requires companies to rethink everything, including how employees across the organization work together and share data.
Three key parts of this shift are attracting tech-savvy new talent, retraining employees whose roles are changing as the result of automation and digitization, and supporting change management across the company
How digital transformation allows you to adapt to a digital workforce
True digital natives such as Millennials and Generation Z, don’t know a world without the internet, mobile technology and cell phones.
These workers have a low tolerance for manual processes, adapt quickly to changing technology and expect speed and customization.
They also have a perspective that organizations need in order to innovate and grow in a more digital world. Businesses that want to compete must embrace both the technology and the culture to meet the challenges of today’s market.
How digital transformation bolsters employee retention and retraining efforts
Conversely, a workforce accustomed to a more traditional environment may put up significant resistance to digital technology and the changes it brings to their roles and working relationships.
For instance, tighter process integration may require the sales organization to break out of its traditional silo to work with finance, warehousing, shipping and customer service. New reporting dashboards may make performance and financial data available to C-level executives before functional managers can either review or edit it.
One of the biggest challenges in a digital transformation initiative is the need to retrain and relocate people as manual processes are eliminated.
Some employees will elect out of this process, leaving the company entirely, while others may stay but require additional support as they adjust to new roles.
How digital transformation helps with change management and the digital CIO
HR and functional leadership must lead the change, embracing the need for new skills and new processes. This will require aligning skillsets with roles through retraining, redeployment and retention.
For these reasons, a digital workplace also calls for a different kind of CIO: not an expert in building data centers, but someone with experience in aligning processes and managing change for an organization. For instance, a recent report from Deloitte showed that 78 percent of tech leaders now say these capabilities are the most essential to success.
Digital transformation and the move to the cloud means that experts in each software manage that tool. Clients who have embraced this understand that they cannot attract an IT talent pool that specializes in each software they use – nor do they need to.
Become a Digital Leader Through Digital Transformation
Despite the growing ubiquity of digital technology across the business landscape, industries today report that on average, they’re 40 percent digitized or less.
Yet digital transformation is real and happening now – and it is favoring emerging growth companies that can build from scratch and leverage the latest technology.
That, in turn, means that more established companies risk being left behind as they struggle to transform their existing technology, processes, and workforce.
In this radically changing environment, playing it safe by incrementally investing in new services or solutions – or waiting until a crisis emerges to develop a plan – simply will not be enough.
Companies that succeed will be the ones willing to act now to engage the entire organization in genuinely reimagining business through the lens of digital transformation.
Need Help with Digital Transformation?
Successful digital transformation relies on three key factors: enabling technologies, rapidly accelerating business change and a tech-savvy workforce. From developing your vision and mapping your strategy to executing on key initiatives, our digital experts can help you transform every aspect of your organization.