Technology has been driving rapid changes in various industries for over two centuries. With the advent of the digital age, we’re seeing yet another revolutionary change that businesses must embrace or they risk being left behind.
In this article, you’ll learn what it means to implement a digital transformation and the best practices for transforming your business operations, models, and customer experience. You will also learn about the role of leaders in digital transformation and the best ways to avoid common digital transformation mistakes.
How Digital Transformation Evolves Various Industries?
Digital transformation is the process of realigning or investing in technology, business models, and processes to drive new value and experiences for businesses, customers, and employees. This allows companies to create new sources of competitive advantage and compete more effectively in the ever-evolving business landscape.
Companies also need to distinguish between digital transformation and digital optimization. Optimization adds value through efficiency and transformation adds value through growth. Both are important, as organizations that don’t optimize while also creating new business models and ways to interact with their customers will fall behind.
During the mid-2000s, most traditional retailers realised that their products could be delivered digitally, especially media such as movies or music. However, clothing retailers didn’t think that consumers would want to buy their clothes online, because they would want to try them on before buying. However, a revolutionary step was introduced in the clothing retail industry.
In 2017, Amazon, the world’s biggest online retailer, also became the biggest clothing retailer in the U.S. Since then, Amazon has been expanding its digital commerce that affects every retail sector. Unlike some companies, General Electric quickly realized the importance of adapting to a rapidly changing digital business environment.
So, now that we understand how digital transformation evolves the industries, let’s understand some best practices of digital transformation.
A successful digital transformation rests on five key points:
- The first is ensuring that the organization develops the capabilities needed for a digital transformation.
- Next is the development and building of a digital platform for the Internet of Things to run on.
- The third point is creating a network of partners that drive innovation across sectors.
- The fourth is updating the employee culture to align with the digital industrial environment, which means focusing on rapid decision making and acquisition, development, retention of digital talent.
- The final key point is driving business model innovation by keeping operations agile and advancing internal improvements.
For any organization to digitally transform itself, it needs to transform its operational processes. For example, a company can use software to automate certain administrative tasks, such as processing invoices. It might then transform its business models by creating an e-commerce store. It also needs to transform the way it interacts with its customers, perhaps by developing an app that allows customers to receive personalized product recommendations.
Digitally transforming an organization is necessary to ensure it will stay competitive in the ever-evolving business landscape.