What is digital transformation?
We’ve recently written about digital marketing and in this post, its going to be about digital transformation.
The expression is buzzing in all management committees … but beyond the buzzword, digital transformation covers a scathing reality that is shaking up businesses.
In any case, those born in the last century … An announced mutation that raises fears and questions the company in depth.
For historic companies, it is time to give meaning to this digital transformation, as promising as it is feared.
If the commercial sites remain precursors and exemplary of the digitalization of the trade; all activities are affected by this digital transformation.
No business will escape a future where people and objects are interconnected anytime, anywhere, with any device (so well illustrated by the acronym ATAWAD: anytime – anywhere – any device).
Even the activities most anchored in reality are affected. Medicine (telesurgery) as well as agriculture (drones, unmanned tractor).
Transport (e-tickets, NFC) as much as construction (touchpads on building sites, 3D printing) …
Even restaurants and hotels – places that could not be more “real” – are impacted, even conditioned, by digital. Through online booking platforms; comparators; consumer reviews; social media conversations.
Digital transformation: the dematerialization of the company
These examples still give a little measure of what digital transformation means for companies.
Digital no longer affects only the way in which we market products or services, but the professional activity as a whole.
So digital transformation, what are we talking about exactly?
To put it simply: the digital transformation of the company lies in the digitization of its activity.
But of “all” his activity. Not just the “digitalization” of sales, marketing, and communication channels. To which we too often reduce the digital transformation.
First, digital transformation is not a new phenomenon: enterprise IT was the first step. Then the first commercial sites (the 1990s) offered the most visible aspect to consumers.
Amazon in mind. Until the beginning of this century, the traditional economy and digital economy could still coexist.
The second gradually nibbling on the first … Until today making it impossible to create a business that would not, at least, be digital.
Transforming businesses of the last century
If the subject of digital transformation is so frequently discussed today, it is because everyone is aware that IT, networks, software, algorithms and “data” will definitively transform the world that ” pre-digital “or” digital migrants “; in other words, the generations of “boomers” and “X”.
In words, everyone over 35. Because the concept of digital transformation is addressed to them first. The following generations, the “digital natives”, do not have to be convinced.
Generations, it is the same for companies as for men. These are the companies born before the 90s, built on an old model, which must reinvent themselves in the digital age.
In comparison, “start-ups” flourish in an omnipresent digital culture where new modes of development (lean start-ups), creation, and organization (agile methods) are structured, with a new vision of work (management collaborative).
It is of course from them that we must be inspired to adapt to the digital world.
The company has no choice. It must adapt to a new connected economy, get ahead in a changing environment.
Digital transformation: Business model, customer experience, organization
So of course, digital transformation is not “just” the digitization of the company…
Digital transformation consists in developing the activity of the company – in a digital and connected world – around three fundamental axes:
- Business model
- Client experience
Review the business model
For the company, digital transformation is shaking all the pillars on which it is based. Starting with the business model.
The fundamental question posed by the digital transformation for “pre-digital” companies is how to generate turnover and margin in the digital world.
It is unlikely for a business to be profitable for a long time if it pursues an activity based on a business model or a distribution method dating back to the last century.
Who would have the idea of talking about “digital transformation” for start-ups? No one, of course.
Because these young shoots are, natively, digital. It is what they are. They live and think “Digital first”. And are built, gradually, on the basis of an activity entirely oriented on digital channels.
Because they adapt and modify their organization in real-time or almost. Because they constantly adjust their offer, learning from the behavior of their customers.
Even if it means changing the business model along the way, to discover a more efficient one.
Adjust the customer experience
Personalize content, use data to create relevant experiences, implement alignment of all channels.
The customer experience is the second level of digital transformation. An experience to be satisfied which starts with a deeper knowledge of the customer made very specific thanks to digital (tracking, geolocation, etc.).
The collection and analysis of data become the fundamental perspectives of this customer knowledge.
A decisive starting point for improving the experience vis-à-vis the product, the brand, and the relationship that the company can have with the consumer.
The tools of “web analytics” and “big data” such as the processing of this data, often “unstructured” here become the keys to digital marketing.
An increasingly personalized marketing, which will strive to make the customer journey as fluid as possible.
We remember of course the famous ZMOT (zero moments of truth), from Google.
Beyond this, this customer knowledge must also take into account the consumer’s different “points of contact” with the brand, product, or service; from mobile to street store to social media.
The whole challenge of digital marketing involves putting a cross-channel device at the service of this digital and nomadic client.
Rethinking the organization
Thinking about digital transformation must first focus on the prior analysis of digital maturity, by examining it point by point.
Integrating digital technology into each dimension and service of the company is the essential concern that must guide its leaders.
All guided by an overall vision, often carried out in companies by the Chief digital officer (CDO) whose function will mainly consist in developing and applying the global digital strategy; supporting managers and their teams; defining key performance indicators, and implementing a measurement plan.
Its role, within the management committee, also amounts to assessing how digital impacts what “makes” the company and to ask the fundamental questions that build it:
- What it sells: its products or services (from paper-book to digital book, or even face-to-face training to e-learning, for example)
- How it sells it: trading platforms, social media, mobile, etc.
- How it is supplied: digital marketplaces, crowdsourcing, etc.
- How it manufactures: 3D printing is revolutionizing the industry and soon bio-technologies,…
- To whom it sells it: purchasing behavior has changed, as with the famous ROPO (Research Online, Purchase Off-line), or click-and-collect (the customer buys on the internet, collects the goods in-store ) or even the drive-to-store (attracting the customer to a store from the geolocation data of his mobile),…
- How it is organized and managed: digital workplace, collaborative management, corporate social networks, etc.
Why is digital transformation so scary?
Digital transformation, basically, is, therefore, a process that companies already know, and which started first, with IT.
The dematerialization of data and the processing of information. All companies have therefore undergone their digital transformation for a long time.
Fortunately. By dematerializing their documents (office automation, EDM, Intranet); by structuring their data (DBMS) and organizing their activity flows (workflows).
But something makes “traditional” businesses today feel like they are facing the wall. And it is certainly the opposite of their old model, declining, against that of digital companies, in particular the “pure players”, 100% digital, whose success can be dazzling and become ultra-dominant, like famous GAFA (Google, Apple, Facebook, Amazon). Such successes were purely unimaginable in a “non-digital” world.
Think digital first
What is frightening is that economic models are disruptive. And not scalable.
What is scary is that companies painfully understand that the models that work today are radically different from the previous ones. And that in order to transform, we will have to make a clean sweep of the past.
And not all companies are ready for it, far from it. At best, those who freeze on their past model, will they be able to adapt. By acting on the points mentioned above.
But the real key to success in achieving digital transformation is first to transform minds, behaviors, and practices; it’s changing the mindset of the company. \The key to the success of the transformation is to think: “digital-first”.
Name- Raunak Pandey
Bio- Raunak is a Mechanical Engineer by qualification & Marketer by passion. He is the founder of Maiden Stride, a leading digital marketing company that provides world-class search engine marketing services and website & application development.