As we’ve entered the Industry 4.0 era, any organization will have to adapt and work on all the core elements of digital transformation (DT).
Gathering political headwinds and lingering economic turmoil, including soaring prices, supply chain disruption, and whatnot – these are the conditions that businesses will have to endure in the coming year and, most importantly, in which they will have to develop. Yes, you read that right – develop. Otherwise, there will be no place for them in this frantically changing world. Digital transformation is the only way for companies to keep the lights on in ‘nothing but ordinary’ circumstances.
Given this fact, which would you prefer – to rely on your gut feeling and grope your way in the dark or to be fully armed and ready to go?
In a situation that constantly requires developing new revenue sources, the digital transformation of your business is the strategic answer. Don’t wait for pigs to fly, take the lead and move fast. Stick to the growth initiative if you want your transformation project to be among the success stories. McKinsey’s research proves that such an approach is more impactful than harsh measures like layoffs, cost cutting, and other slash-and-burn strategies.
We’ve analyzed the main aspects of digital transformation and their role in your business success.
Focus on creating a digital customer-centric ecosystem
Digital transformation is a process of building an all-inclusive business model and infrastructure, the elements of which work cohesively together to build success. There are four key components of digital transformation you should take into account – digital customer, digital workspace, digital infrastructure and operations, and digital products and services. Let’s dive deeper into each of them.
There are constant changes that influence customers’ behavior. Sometimes these changes can be drastic, for example, in 2020 when consumers of all ages began to buy goods and use services online because of the lockdown. The pandemic accelerated organizations’ digitalization across industries, making DT not a distant prospect but a decision to be made urgently. Deloitte’s survey reveals that 77% of CEOs agreed that the COVID-19 pandemic accelerated their plans for digital transformation.
The market is also being shaped by a growing percentage of active internet users of different generations — it’s high among all age groups, and even the difference between the Silent Generation and Gen Z is not as huge as one might think.
As a result, a new type of modern customer has entered the scene — app-native buyers. Mobility alone reshapes entire industries. For example, 63% of users watch videos on smartphones and 34% on tablets. It can’t but affect streaming services, which need to ensure up-to-par viewing experiences on any device.
The trend of using mobile devices has an impact not only on the media and entertainment industry. In the e-commerce sphere, the situation is similar. Speaking of Amazon, 59% to 75% of its audience visits the company’s website via smartphones.
To adapt to users’ rising demands, you need to constantly keep your finger on the pulse. One of the current best practices that shouldn’t be overlooked is personalization. By leveraging customers’ uniqueness, you make their experience better and, as a result, increase their lifetime value. It would be unwise not to take advantage of it, especially in industries such as banking, where organizations collect an overwhelming amount of personal data and have the potential to offer users the most accurate personalization. To provide customers with contextually relevant interactions and offerings, leverage:
- A real-time customer engagement strategy. In the B2C model, customers make decisions at the speed of light and you need to live up to expectations. Imagine a user visiting an e-commerce website and not being able to request information. To deal with this challenge, you can create a chatbot and leverage artificial intelligence (AI) and machine learning (ML) technologies to analyze users’ messages. That way, the bot will be able to evaluate and answer the most frequently asked questions, or route customers to a designated employee, if the request is complex.
- An omnichannel experience. McKinsey’s research confirms that omnichannel shopping is becoming a given. It means you need to provide customers with a seamless user experience regardless of the channel through which they reach you.
Here are a few examples of successful omnichannel practices. Amazon users can put items into the cart on their mobile devices, leave them there, and continue shopping later on the desktop. This is possible thanks to the synchronization of the mobile and desktop versions of the website — where the contents of the shopping cart are displayed identically on different devices. You can go even further and synchronize the online customer experience with the one they get in your brick-and-mortar stores, just as Walgreens did. Their customers can check and refill prescriptions in the company’s app, which reduces the waiting time for in-store pick-ups.
Thus, to attract digital buyers from different age groups and ensure their customer journey is seamless, you should work on the accessibility and personalization of your services.
Creating a digital workspace is not limited to adopting state-of-the-art technologies. This process involves other activities that positively influence employee satisfaction and shouldn’t be discarded.
- Relieve your staff from monotonous tasks. You can leverage software to automate tedious processes and delegate them to RPA bots. Robotic Process Automation helps businesses speed up operations and minimize the possibility of human error. For example, in banking, RPA technology empowers you with end-to-end document processing as well as simplifies KYC and AML procedures, and regulatory compliance checks.
- Provide your staff with the possibility to work remotely or choose a hybrid option. McKinsey’s research reveals that after the COVID-19 pandemic, the percentage of employees who opt for a more flexible working model increased from 30% to 52%. Also, consider the generation of your staff – 75% of Gen X, 84% of Millennials, and 66% of Gen Z make remote work a priority. For your employees to feel comfortable and productive when working from home, provide them with efficient information management tools, collaboration tools for communication and task management, and others.
- Ensure the organization’s data is secure and protected regardless of what devices your employees use. If you allow your staff to work on their own devices, you should also develop a BYOD (bring your own device) policy that establishes particular guidelines that help ensure security. It may include providing employees with SSL certificates for device authentication and automated wiping of company software after failed login attempts
By providing your employees with a digital workspace, you improve their working conditions and increase their involvement in working together to change your organization. McKinsey states that companies following this approach are 1.4 times more likely to succeed in digital transformation.
Digital infrastructure and operations
To reap the benefits of a full-scale technology-enabled business transformation, you should review both your current infrastructure and operations. Before deploying new, geeky software, it’s necessary to uncover the flaws within the existing systems and processes. Failure to identify areas of improvement is the reason why a quarter of transformational initiatives lose ~23% of their financial benefit.
Consider technology enablement and process redesign as equally essential interrelated activities. To change the odds in your favor when it comes to digital transformation, make sure you implement particular technologies not for their own sake but to boost operational efficiency. That’s why building a digital infrastructure should depend on the specifics of your business processes. Yet, of course, there are some common elements that are worth paying attention to anyway.
- Computing infrastructure. To achieve scalability, pay only for the resources you use, and avoid significant upfront investments in the hardware, you should move to the cloud unless you have security requirements under which on-premise hosting becomes the only option. If you’ve already been taking advantage of cloud computing, you can review it to optimize the resources and costs of cloud maintenance.
- A robust data infrastructure. Creating data infrastructure includes setting up data collection processes, building a data repository, taking care of data quality and security, and much more. Solid data infrastructure helps you make the most of advanced analytics technologies such as business intelligence (BI). As the cornerstone of in-depth analysis, together, they provide the possibility to extract the gold of insights from the ore of raw, unstructured data.
- Communication network infrastructure. To simplify, optimize, and rationalize existing processes in your organization, you’ll require leading-edge technologies such as 5G, Fifth-Generation Fixed Networks (F5G), IoT, Internet Protocol version 6+ (IPv6+), etc.
It’s important to keep in mind that when businesses go digital, so do the attackers who want to steal your information. Make sure your infrastructure and operations are “secure by design” by following DevOps best practices.
Digital products and services
Marrying technologies such as cloud computing, IoT, mobile technologies, big data analytics, blockchain, automation, etc., enables you to stay ahead of the curve, adjust to customers’ rising demands, and offer truly innovative products and services.
- Fundamental changes. Sometimes the changes that digital transformation brings are so significant that they affect entire industries, as it happened with transportation services when Uber was founded. The company broke the idea of taxi service in its classic sense and changed the market context. Besides, Uber went beyond the ride-sharing app stage and began offering food delivery to cover more needs of users. Such an approach forced other players to change their strategies to keep up.
- Peripheral changes. Implementing technologies already acknowledged as standard can also have a transformative effect. Take, for example, robotic process automation (RPA) for remote patient monitoring (RPM) in healthcare. With specialized apps, people can document their bio-data and track its changes in case of chronic diseases or the post-surgery period. The widespread adoption of this innovation during the COVID-19 pandemic helped hospitals and nursing staff cope with the huge influx of patients. For instance, a hospital in Belgium used RPM to discharge patients who were on the mend sooner and admit new patients in a more serious condition. Before this approach, patients spent an average of 9-14 days in the hospital. After RPA technology implementation, patients spent only 4 to 9 days in the hospital and then were sent home, where they were monitored remotely for another ten days.
These examples sound inspiring and encouraging, but keep in mind that in some industries, such as finance, there’s still a huge gap between the front and back office processes. On the one hand, there’s mobile banking where users can transfer funds, pay bills, track spending, etc. On the other hand, in most cases, customers still have to come to the bank’s office and sign papers to get a bank account. You can overcome this gap by digitizing basic operations from the beginning of your customer journey.
The time is NOW: start your digital maturity journey
One of the changes we’ve all seen in recent years is the exponential growth of speed at which business shifts are happening. And you have to be prepared for a speedy evolution. There’s no room to postpone working on the digital maturity of your business any longer. IDC research reveals that 75% of companies will have comprehensive DT implementation road maps by 2023, compared to only 27% in 2021. If you want to uncover new revenue sources and be more people-oriented speaking of both customers and employees, it’s high time to take up a transformation initiative.
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