Today, 93% of small business owners use at least one type of technology platform to help run their businesses. This is an extremely high percentage for small businesses, and the number only increases for large enterprises and corporations. Many organizations around the world are choosing to leave manual processes in the past and replace them with more efficient, technological solutions. This gradual implementation and inclusion of technology into various aspects of a business is known as digital transformation or DX.
What is a digital transformation strategy?
A digital transformation strategy is a plan that focuses on the inclusion and leverage of technology within various aspects of an organization. Along with a comprehensive IT roadmap, a digital transformation strategy helps organizations reap the benefits of digital technology, such as greater efficiency, improved customer service, increased collaboration, and more.
The purpose of a digital transformation strategy
There are a lot of digital technologies out there, so how do organizations choose the right tech solutions for their departments? That’s one of the questions that a digital transformation strategy will answer. In addition, a digital transformation strategy will help a business determine which departments need and will benefit from additional technology and how to implement it effectively.
How will a digital transformation strategy affect an IT team?
After implementing a digital transformation strategy, an organization and its teams will need to adjust to the changes. Some examples of how a digital transformation strategy will affect an IT team include:
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Implement new processes
An IT team must be able to adjust to the new processes and systems that result from digital transformation. If the changes are minor, then an IT team should be able to adjust easily, but if the changes are major, additional training might be required.
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Make tasks easier
The main point of digital transformation is to make processes faster, simpler, and more efficient. An effective digital transformation strategy will make tasks easier and more streamlined for IT teams.
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Increase productivity
A key benefit of digital transformation is that it increases productivity by making processes simpler, automated, and more efficient. IT teams will notice a significant boost in productivity after adhering to a digital transformation strategy.
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Prepare for the future
As new digital technology emerges, a digital transformation strategy helps IT teams implement new technology and prepare for the future. If an IT team does not adapt and implement better, more efficient technology, they will not be able to do their jobs as effectively and keep up with competitors.
4 focus areas for building a digital transformation strategy
Before building a digital transformation strategy, you’ll need to find a focus area, or an aspect of your business that you want to transform with technology. After you find your focus areas, then you can move to the next step and outline a plan for the involved departments and teams. Magenest writes that the four main focus areas for building a digital transformation strategy are process transformation, model transformation, domain transformation, and organizational transformation.
1) Process transformation
Process transformation focuses on changing processes, procedures, and systems by implementing digital technology. For this focus area, the main goal is usually to make processes faster, simpler, and more streamlined while reducing human error.
2) Model transformation
Occasionally, organizations will need to alter their business model in order to keep up with changing market demands. A great example of this is how movie streaming platforms switched from renting out physical DVDs to offering online streaming services. In order to make such drastic changes to their business models, organizations rely on digital transformation strategies.
3) Domain transformation
Domain transformation occurs when a business needs to transition into another industry or market. However, entering a new industry requires a significant amount of resources, so this digital transformation focus area doesn’t occur as much as process transformation or model transformation.
4) Organizational transformation
Organizational transformation, also known as cultural transformation, helps shape the culture of the business. For instance, an organization could use communication software to bridge the communication gap between on-site and remote teams, thus creating a more communicative workplace.
6 steps for a successful digital transformation strategy
IBM asserts that the “most successful digital transformations are aligned to a company’s business strategy and follow two principles:
1) They work backward, starting with the ideal customer experience.
2) They take a holistic approach to transforming operations.
Not every digital transformation strategy will follow the same steps and procedures since it must adapt for every organization and situation. The following six steps are to provide an outline or guide for your digital transformation strategy, but remember to add, subtract, or alter the steps if needed to fit your IT team’s unique needs and situations.
Step 1: Assess the need for digital transformation
Although it’s tempting to dive right in and begin investing in new tech, the first step in your strategy should be assessing the need for digital transformation. There are a couple different ways to do this. You could begin by examining an organization as a whole and identifying areas where tech could bring about change and improvement, or you could look into specific departments or teams that would benefit from digital transformation.
Step 2: Brainstorm ideas and tech solutions
Now that the areas for improvement have been identified, it’s time to go to the drawing board and brainstorm possible tech solutions. PTC writes that there are eight common digital transformation technologies to take into consideration:
“These include:
- Mobile
- IoT
- Digital Twin
- Robotics
- Cloud
- Artificial Intelligence & Machine Learning
- Augmented Reality
- Additive Manufacturing”
Step 3: Start small then build up to large investments
A common mistake that some organizations make when going through a digital transformation process is going too big too soon. It’s a common misconception that digital transformation means investing significantly into new tech, but that usually isn’t the case. A digital transformation review from Microsoft admits, “In most cases, digital transformations do not start with an organization-wide plan of change, but rather with a series of micro-revolutions. These are small, quick projects that deliver positive business outcomes and accrue to the digital dream. Once complete, the company moves on to the next.”
Step 4: Find reliable and experienced partners
Instead of simply searching for tech solutions, find reliable and experienced business partners who offer the solutions you need. You’ll not only work with their software or tech solution, but with their company as well. Even the best tech solutions would be difficult to implement without partners who have the right experience, knowledge, and ability to help.
Step 5: Prepare for tech implementation
Digital transformation often has a significant impact on an organization. You’ll want to prepare your organization for change, and set up additional training for employees if required. Ensure that all affected parties are notified of tech additions or changes that will occur.
Step 6: Collect feedback & make changes as needed
After implementing the new tech into your business, you move into the observation stage. During this step, you’ll collect feedback about the tech changes from teams and affected personnel, and you can use this feedback to perfect systems and processes. At this time, you will also begin to see results and benefits from the implementation of new technology.
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