In the past century, a concept that has been proven right time and again is that it is not the strongest that survives, but the one that is most adaptable to change. In order to not just survive, but to thrive in the changing times, businesses need to keep re-inventing themselves periodically. Digital transformation is the major contributing factor for businesses to thrive.
Defining Digital transformation
Digital transformation could be interpreted differently for different kinds of businesses. To put it in generic words, digital transformation is the integration of digital technology into all areas of business in order to deliver more value to customers.
The process of complete digital transformation comes after a few experimental iterations and would bring in a lot of cultural changes to the business operation.
Adapting digital transformation
The method of adaptation could be different for different kinds of businesses.
For example, for a traditional brick and mortar business, the first adaptation would likely be to have a digital presence on social channels for their business and eventually move on to online portals for selling their products whereas, for an IT company, digital transformation would mean a more data-driven market analysis to deliver more value to the customer
Areas of digital transformation
Digital transformation can be applied in various departments of the business. The major areas are —
User experience(UX):
For all businesses, the customer is the king. With an effective UX, the business can give out clarity on its ideas to the customers on digital platforms on mobiles/tabs. Proven methodologies like Design Thinking can be applied here to map the user journey on the company's digital platform - be it a website or a mobile app. It helps the businesses come out of the ambiguity of ideas and come up with a solid agile strategy.
Operational process:
The idea behind a transformation in the operational process is to create maximum value at every stage of business operation. While designing the operational process, the important thing to keep in mind is that the operational process should align with the envisioned strategy. Digital tools and technologies can be used for a better flow of information and increased collaboration. The workflows of a project or a process can be tracked through these digital tools which facilitate not only transparency but also optimizing the process.
Accounting and finance:
Traditional finance models are mostly inefficient in present times. Hence, this area has a large scope for transformation as most of the tasks can be automated. Digital databases, ease of transactions, and blockchain are a few examples of the impact digital transformation has had in this field. Further, data-driven insights and data analytics can be applied here which will boost the organization’s profits.
Logistics and supply chain:
Digitally enabled logistics services help businesses in scaling up their businesses easily. For e-commerce, it is a very essential integration. A supply chain backed by digital technologies has more cost savings in terms of fuel and time as opposed to legacy systems. This also enables real-time reporting which further enhances the end-user experience.
Optimizing the supply chain and enhancing user experience are the top concerns in the e-commerce industry. Pacewisdom provided a niche solution for a renowned e-commerce brand which grew their revenue by a substantial margin.
Let us explore a possibly phase-wise model for the business transformation of a traditional small business
Phase 1: Digitisation of records for building a database
Converting the records of past years into a digital database can be an ideal step to begin with. This would give a good overview of the operations and aid in the subsequent phases
Phase 2: Tidying up and organization of the digital database
Here, we take the digital records from phase 1 and classify it into logical brackets for easier retrieval and analysis.
Phase 3: Automate mundane tasks
Automation is a proven pathway for improved efficiency and thereby increased profits. Everyday tasks can be automated with software tools thus saving time and energy.
Phase 4: Identify strengths and weakness
In the first three phases, we have gathered all data in digital form and organized it in a tangible format. This paves way for running some analytics to identify areas in which the business is doing good and the areas that need improvement.
With the results of the analysis, more measures to improve efficiency can be identified. Business processes can be simplified and available resources can be optimally redistributed.
Phase 5: Transform the business
Once the business gets used to the changes made until phase 4, it becomes rather important to arrive at the most noticeable phase of transformation. In this phase, we concentrate on growth and sustainability. Basically, here we define how the business shall operate for years to come.
New processes are defined, the business ecosystem is made more agile, flexible, and even more customer-centric.
Good planning is the key to successful digital transformation. Consultants like Pace Wisdom have had experiences in facilitating transformations across businesses and these experiences will be a good value add in formulating a strategy.
Technologies in digital transformation
New technologies and tools can aid businesses in seamless transformation into the digital world. Some of the proven technologies that are already helping businesses do better are listed below
Artificial Intelligence
Artificial intelligence(AI) can be defined as a technology where the computer systems learn by themselves and execute tasks with an intellect that mimics human minds. Today, AI finds its applications in several fields.
Some of the common platforms where AI can be employed are,
- Chatbots on websites (Consumer engagement)
- Dynamic analytics like suggesting products of interest for customers on websites (Insights) and re-marketing
- Voice assistants
Cloud computing and storage
With cloud service providers like Amazon web services and Microsoft azure being accessible to all, adopting cloud-based solutions has become easier for even small businesses.
As opposed to legacy systems, cloud-based systems come at a reduced cost, do not break down (no downtimes), are accessible from anywhere, are flexible, and scalable.
Another important feature of the cloud model is that it allows users to pay for the exact amount of resources they use. This helps smaller companies in better strategizing their financial reach.
The efficiency of the business improves in leaps and bounds when it adopts cloud computing. Cloud computing is burgeoning by the day and here is our elaborate take on the benefits of Cloud and IoT.
Internet of things (IoT)
Internet of things is a system where a set of objects connected to the internet communicate with each other (send and receive data) without human intervention. The collected data can be analyzed for streamlining business models.
For example, if you run a cab service with a fleet of cars, the speed of the car and the distance traveled can be collected in real-time with IoT and you can use that data to optimize routes and get an understanding of fuel expenditure.
Challenges in digital transformation
Digital transformation is not an overnight phenomenon. It is a rather lengthy process that requires a lot of patience and commitment from the business owners.
Another major challenge for venturing into digital transformation is the general inertia of people. Change is not outright accepted. So this aspect also needs to be addressed before starting the process of transformation. To set the ball rolling, here is a list of Top 20 Software Development firms in San Franscisco that offer Digital Transformation Services through Software Development.
One-time investment for digital transformation might appear a little expensive. But it is well justified by the returns that it fetches when done right over a period of time.
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