A digital transformation strategy is a detailed roadmap for using digital processes to enhance business outcomes across different functions of an enterprise. Data and digital technologies drive this strategy. One thing to note is that the marketing function plays a critical role in shaping the broad business goals and objectives of any business.
To gain and retain loyal customers in a highly competitive business world, lasting brands need to continuously innovate and offer their customers what they want when they want it. As the internet has opened up shopping privileges across physical boundaries, businesses can no longer sit complacent with the belief that their customer base will remain loyal forever.
In today’s shopping landscape, businesses cannot hope to attract and retain customers just on the merits of their products and services, but they have to go the extra mile to offer a personalized and rewarding buying journey from beginning to end. Today, everyone talks about the “customer experience” or “customer engagement,” and that’s where a digital transformation strategy plays a critical role.
When traditional marketing functions merge with IT processes or digital solutions in shaping the overall business strategy, the business is said to have implemented a digital transformation strategy.
Actionable Intelligence: The New Normal of a Data-First Enterprise
Actionable intelligence has been accepted as the “new normal” of the data-first enterprise. In the data-first enterprise, data and digital technologies not only open up innovative revenue channels but also create the most compliant (governed) business operations.
However, in order for an enterprise to successfully plan, develop, and execute a data-first operating model, the business owners and operators have to first develop a digital transformation strategy – connecting the data piles, digital technologies, business processes, and marketing staff.
The digital transformation strategy develops around the need to bridge the gaps between the current data-driven goals and processes and intended future business goals and processes. In a nutshell, the digital transformation strategy strikes a harmonious balance between traditional IT and marketing functions.
Global businesses have witnessed firsthand the immense benefits of digital processes, such as improved efficiencies, reduced operating costs, and growth of additional revenue channels. A recent industry survey report indicated that 92% of businesses are already pursuing digital transformation in more than one way. However, the transformation across businesses is at various stages of maturity.
In another survey, 51% of technology executives said they have not seen an increase in performance or profitability from digital transformation investments, with workforce issues being a top challenge.
Still, many major brands such as the Marriot, Walmart, and Domino’s Pizza have already implemented and experienced the benefits of digital transformation strategies. According to a McKinsey report, the global business spend on digital technologies reached $2 trillion by 2020.
Hardware, Software, and Networking: The Three Pillars of Digital Transformation
The last 30 years have had tremendous advancements in IT research, application developments, and growth of newer and better technologies. It is only because of this phenomenal growth in IT and data technologies that you can witness full digital transformations of some businesses today.
In today’s data-first enterprise, business owners and operators depend on data-driven decisions and insights to improve their employee performance, customer journey, and innovate novel products and services.
Here are some application and networking technologies shaping the digital transformation in global businesses that deserve a special mention:
- Artificial intelligence (AI), the biggest invention of the data age, is gradually transforming businesses of all shapes, sizes, and types through automated technologies that mimic human thinking. AI can be found in predictive maintenance, product recommendations, process automation, chat bots, and countless other applications.
- Cloud computing has gained clout not only as the preferred service-provider platform, but popular cloud-based applications like Office 365, Google Drive, and SalesForce that enable business on the go.
- The internet of things (IoT) is a vast network of connected devices and people. IoT facilitates business process automation by providing seamless workflows.
- Mobile devices and applications are rapidly capturing the worldwide business market, and today you will find more mobile app developers than legacy software developers.
- Augmented reality (AR) and virtual reality (VR) offer immersive learning to businesses and customers. Currently, global businesses with advanced technology capabilities use AR and VR to deploy product simulations, walkthroughs, collaboration tools, and customer engagement platforms.
Basic Steps for Building a Digital Transformation Strategy
Here are the basic steps used for building a digital transformation strategy:
- Planning and shaping a digital (IT) strategy thataligns with the overall business strategy
- Finding the experts and those most capable to drive the efforts from planning to implementation
- Building and then converting the blueprint (structure) of the digital implementation strategy into actionable steps
- Plan to action – seeing the digital transformation through pre-defined steps
- Evaluating the key milestones of the digital transformation project as they happen and noting the errors or anomalies for rectifying and improving the steps.
- Measuring the success of the digital transformation strategy
This article highlights the required organizational mindset and behavioral changes needed to successfully plan and implement a digital transformation strategy.
The Role of Advanced Technologies in Accelerating Digital Transformation
With the emergence of advanced data, cloud, AI, and many other associated technologies like IoT and social channels, digital transformation has suddenly become a preoccupation for global businesses. However, digital transformation requires careful analysis of the current business context, current business goals, and desired goals. In the last five years, many data technologies have fully matured – thus giving further impetus to the data-first enterprises.
At the very beginning of any digital transformation project, it is important to assess and understand what business problems the digital solutions will solve and exactly what business benefits such solutions will bring to all stakeholders.
In the data-first world, it is possible to use available business data like customer data and advanced data technologies (predictive and prescriptive analysis) to determine the gaps between current business goals and achievable business goals through digital transformation.
The tools and technology platforms for digital transformation also belong to the realm of advanced IT technologies. These tools can help uncover both the threats and opportunities surrounding the proposed digital transformation, so that the business staff can take early actions to avoid later problems.
The Role of the CEO in Driving Digital Transformation
As digital transformation is the new mantra of global businesses, more and more CEOs are stepping forward to take an active role in this transformative effort. Customer-centricity is of utmost importance in the data-first enterprise, and newer, data-driven operating models are emerging in businesses to support the customer experience.
The CEOs of today’s enterprises have a complex set of roles to play in their organizations, and quite often they may also oversee the digital transformation efforts with the help of their chosen peers or subordinates.
In this interview, Krish Krishnakanthan, leader in McKinsey’s application maintenance and development work across North America, high-tech and financial services sectors, said: “Today, you need a technology-led business strategy, not a business strategy supported by technology.”