Digital Trasformation: Why It Isn't Adding Up For Many Companies
Going digital was touted as the ‘next big thing in business,’ as an ‘entry onto the big stage’ to help develop that ‘winning business proposition.’ But the practice hasn’t measured up to the promise. What are the challenges businesses face in their digital journey?Is it about technology, strategy, or execution?
Digital transformation (DX) is here to stay! But as businesses tune in to this New Normal, the digital journey hasn’t been smooth for many companies for various reasons. Today, the world is a digital platform. Communication, travelling, shopping, services, commerce – every interaction is digitized. But the hype around DX has masked the challenges and effectiveness of its implementation.
What are the issues businesses face in going digital? Are they going about their DX business correctly? Are they delivering on their digital promises? A CIO article says 80 percent of businesses view DX as a priority. But a company’s efforts will not be successful unless they learn the business strategy for going digital. In that sense, this may be a good wake-up call for many organizations.
Are you facing challenges in going digital? Then you aren’t alone!
To know what digital transformation is, let’s understand what it isn’t! DX isn’t about technology alone. It isn’t only about replacing manual processes with automation. It isn’t only about data capture to provide better customer experience across channels. DX is a mix of all these. And the challenges in its implementation arise because its scope varies from business to business, industry to industry.
The big, common challenges in digital transformation are financial constraints (51%), complicated or rigid legacy IT infrastructure (45%), and the absence of a clear-cut idea about the digital or end-user experience (40%). In cases where businesses are implementing DX, they are unable to create the environment to onboard their employees onto their DX platforms.
One study says 90 percent of CEOs believe the digital economy will impact their industry greatly. But only 25 percent plan to go digital, and less than 15 percent are executing it. Again, companies having the means to digitize doesn’t mean they’re ready to do so. Even if they possess the tools, it doesn’t mean they’re getting any real value out of Big Data analytics or other emerging technologies.
Digital transformation isn’t just about customer experi- ence. It’s more than that!
Social media interactions are pervading every area of life. And with customer experience dominating business choice, going digital is no longer a choice! For example, 43 percent of organizations today are using mobile channels to sell products and services. But many still show a disconnect with customers on social despite it being the starting block for going digital. The point is, the scale of operations of businesses today is vast, with customers transcending geographies, as well as social and demographic profiles. Therefore, organizations need to be ‘connected’ to provide a consistency of experience to customers. And if they aren’t doing it, or don’t have a road map for doing it, it will be too late. The key to digital transformation is to deliver timely and better customer experiences.
Today, digital transformation is more than just a change in process. It’s a change in the culture of business itself. For example, the world is going digital. All businesses and industries, clients and consumers are going digital. Delivery and operations are going digital. In this scenario, can you afford not to go digital? NO!
Step onto the digital platform with caution, but do step on it!
Success in DX depends on mindset, not technology. It doesn’t help if leaders are fearful or averse to change. One mistake organizations make is to try and digitize every operation. Take the piecemeal approach – start by learning what areas or verticals of your organization you want to be digital. Understand the core capabilities of your organization that will best serve your customers and your bottom line. For example, IT, customer service, and marketing have much made headway in DX. It’s critical in industries like retail, manufacturing, BFS, etc. And sooner or later, every business needs to get onboard. That’s the point! Not every industry or department should rush into it. And when it’s time, have a clear road map. If you don’t have a plan, don’t try it.Know that all digitization may not work, or not provide the benefits you visualize.
Investments in DX will exceed a whopping $2 trillion by 2021. But organizations still aren’t confident about it. The important thing is to take charge and lead the change. Understand how DX impacts your business. For example, many organizations tend to focus only on the front-end or user experience. Understand what your drivers for digital transformation are and where should you focus your time and resources.
It’s one thing to have a digital strategy. What’s important is execution!
Digital transformation isn’t just a transformation of processes, but of people, of business itself. Every period of transformation is the time to overhaul business processes, organizational culture, and individual skills. The key to DX is to deliver the best outcomes for competitive advantage. It’s for organizations to understand how they can implement and use DX as a differentiator to gain this competitive edge. However good your strategy may be, execution is critical. Good results come with good implementation! A high 83 percent of business leaders say their digital strategy is fit for purpose. But 65 percent also see implementing digital across the business as their biggest challenge. So, get off the high horse of strategic planning and work toward real results. If you don’t, you face the risk of getting knocked off the value chain. Clearly, that isn’t a choice!